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The government has presented a new proposal for the minimum wage in 2025. Understand how the current calculation and the new salary policy may impact the increase from January.
The minimum wage in Brazil could undergo a major change in 2025, if the government manages to approve a new formula for calculating the adjustment. The proposal, which has already been sent to Congress, could result in a lower amount than initially planned.
Currently, the minimum wage adjustment formula takes into account inflation and the growth of the Gross Domestic Product (GDP) over the previous two years. However, the new proposal submitted by the government changes this calculation, which could reduce the increase that workers were expecting for next year.
How will the new calculation affect the Minimum Wage?
In 2024, the minimum wage is R $ 1.412, and the adjustment provided for by the current formula would be R$118, or 8,36%, taking the value to R$ 1.530. However, if the new rule is approved, the increase will be smaller: R$ 107, or 7,58%, resulting in a value of R$1.519.
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In other words, this means that the worker will be able to receive R$11 less than expected under the current rule if the proposal is implemented.
The government explains that the change is due to the need to control public debt and promote a “Lock” in the readjustment to reduce government spending.
What is the difference between the rules?
Currently, the minimum wage is adjusted based on two indexes: the National Consumer Price Index (INPC), which measures inflation, and GDP growth over the previous two years. For the 2025 calculation, this would include 2024 inflation and 2023 GDP.
The government's new proposal suggests that the adjustment be calculated only based on the INPC inflation and the variation in GDP from the previous year.
Furthermore, the economic team proposes a “lock” of 2,5% for GDP, limiting the growth of public spending, in accordance with the new fiscal framework approved in 2023.
The financial impact
The change in the calculation of the minimum wage also has implications for public coffers.
The government estimates that this change could generate savings of up to R$110 billion by 2030, with savings of R$2 billion in 2025 alone. This is considered an important step towards reducing the country's public debt.
The impact of this change is not limited to workers, but also affects social benefits, such as pensions and the Continuous Benefit Payment (BPC), which are adjusted according to the value of the minimum wage.
When will it come into effect?
If the proposal is approved by Congress, the new calculation formula will come into effect on January 1, 2025. Until then, the government must take the necessary measures to ensure that the new minimum wage value is made official.
The history of the minimum wage in Brazil
The minimum wage in Brazil was created in 1936, during the government of Getúlio Vargas, and has undergone several changes over the years.
It is the minimum amount that must be paid to workers, regardless of their area of activity. Since then, the minimum wage has been adjusted annually, in line with inflation and, more recently, with GDP growth.
From 1994 to 2023, the minimum wage values underwent several increases, with the 1995 adjustment, which was 42,86%, standing out. In recent years, the increase has been around 7% to 8%. The value for 2024, for example, had an increase of 7,7% compared to the previous year, going from R$1.302 to R$1.412.
The proposal is in Congress
Now, the ball is in Congress's court, which will have to analyze and approve the proposal to change the calculation of the minimum wage. If this happens, Brazilian workers will face a smaller increase than initially expected.
Despite this, the government's proposal seeks to balance public accounts, controlling the country's spending and debt. Approval of the new calculation formula will also depend on the government's political articulation, which is already negotiating to ensure that the change takes place.
What to expect?
If Congress approves the change, the minimum wage in 2025 will be adjusted based on inflation in 2024 and GDP growth in 2023, with the “ceiling” of 2,5% imposed by the government.
This means that although the increase will not be as large as expected, the amount will still be higher than the current one, and the public savings could be significant.
The scenario is uncertain, but one thing is certain: the proposed change in the calculation of the minimum wage is generating debate about the impact on workers and the country's finances.
