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The new minimum wage in 2025, scheduled to come into effect in a few days, still raises doubts about the official value
O minimum wage is one of the pillars of Brazil's economy, affecting millions of workers and retirees. Over the last few weeks, debates have increased about a possible change in the calculation formula, with proposals that could impact the final value of the minimum wage in 2025.
The changes aim to control public spending, but raise questions about the effects in the population's income, since the minimum wage in 2025 must be smaller than initially anticipated.
the current scenario
During this year 2024, the minimum wage was set at R$1.412, with an increase of 7,7% compared to the previous year.
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Under the current valuation rule, the minimum wage adjustment in 2025 would be R$118, raising the value to R$1.530 — an increase of 8,36%.
However, the government has proposed a new rule, which reduces the increase to R$107, resulting in a minimum wage of R$1.519.
Although the difference seems small, it symbolizes an attempt to control the growth of public debt.
The change also reflects a new approach by the government to the fiscal framework, approved in 2023, which limits the increase in public spending.
The impact on the economy of the minimum wage in 2025
The minimum wage plays a crucial role in adjusting social benefits, such as pensions and the Continuous Benefit Payment (BPC).
The estimate is that savings for the public coffers will reach R$110 billion by 2030, with R$2 billion already in 2025. These savings can be used to reduce pressure on the federal budget, but they can also reduce the purchasing power of families who depend on the minimum to survive.
The new proposed formula
Currently, the minimum wage is adjusted based on the National Consumer Price Index (INPC) accumulated over 12 months, added to the variation in the consolidated Gross Domestic Product (GDP) of the previous two years.
With the new proposal, the calculation would only include inflation measured by the INPC and a “lock” for GDP, limited to 2,5%. Although the 2023 GDP registered a growth of 2,9%, this limitation was presented as a way to contain government spending.
When will the new value come into effect?
Regardless of the rule approved, the new minimum wage will come into effect on January 1, 2025. The government will have until the end of 2024 to decide whether to maintain the current formula or implement the new methodology.
In other words, if the government is unable to change the calculation formula, the value of the minimum wage in 2025 will be R$1.530.
Since its creation in 1936, during the government of Getúlio Vargas, the minimum wage has been adjusted periodically. Recent history shows variations that reflect economic and political changes over the decades:
- 2024: R$ 1.412 (7,7% increase)
- 2023: R$ 1.320 (total increase of 8,9%)
- 2022: R$ 1.212 (10,18% increase)
- 2015: R$ 788 (8,84% increase)
- 2010: R$ 510 (9,68% increase)
- 1995: R$ 100 (42,86% increase)
These figures show how the minimum wage has evolved, keeping up with inflation and economic growth, but also facing challenges related to fiscal control.
The debate about the future
The proposal to limit the adjustment of the minimum wage is not unanimous. On the one hand, it seeks to guarantee the sustainability of public accounts.
On the other hand, it raises concerns about the impact on the quality of life of Brazilians, especially those who depend directly on the minimum wage.
For many economists, balance is essential. A valuation policy that takes into account both economic growth and inflation can help protect household income without compromising the public budget.
