President Dilma Rousseff won one of her first major battles with congress last night when the senate approved a bill to set minimum wage at 545 reais a month (about $326). That's 35 reais higher than last year’s minimum, and lower than what many politicians had proposed. Depending on who you talk to, this is either good news for Brazil's overheating economy, or one more reason why someone with gainful employment still might not be able to feed his or her family.
The move has been praised by publications like the Economist and the Financial Times as proof that Rousseff is committed to keeping government expenditures in check. Any increase in the minimum wage means raises for many government employees. Acording to the Economist, an increase of 1 real costs the government an extra 286 million reais in a year. Financial types say fiscal austerity is necessary to reduce inflation, which has surged worryingly in the last twelve months.
Others, like liberal congressman Chico Alencar, argue that inflation is one reason why workers should be paid more. His party proposed boosting the minimum wage to 700 reais a month ($418). In an article defending his position, he references a study showing that to cover a family's basic needs—things like food, housing and healthcare—the minimum wage would need to be a whopping (and very precise) 2,227.53 reais a month. This year's minimum wage increase of nearly 7% is slightly higher than the general estimates of inflation in the cost of goods and services here last year. But the cost of necessities for low-income families may be be rising faster. One example: The cost of basic foods increased 15.8 percent in the last twelve months.