Change is part of a package of initiatives aimed at reducing public spending
The president recently signed new legislation that changes the way the minimum wage is adjusted, a measure that was approved by the National Congress. This change is part of a package of initiatives aimed at reducing public spending. The new rule imposes a 2.5% limit on the real increase in the minimum wage, in line with the growth ceiling of total government expenditure. With this change, the government seeks to mitigate the effect of the increase in the minimum wage on public finances.
The savings estimated by the federal government would be R$15.3 billion in two years. The R$1 increase in the minimum wage increases government expenses by approximately R$450 million. The expectation is that, with the implementation of this rule, the minimum wage will reach R$1,518 in 2025.
*Report produced with the help of AI
Published by Fernando Dias
