CARACAS, Venezuela, Jan. 9 (UPI) -- Venezuelan President Nicolas Maduro increased the minimum wage by 50 percent amid an economic crisis, an act criticized by the opposition and a reputed economist.
The minimum wage increase pales in comparison to the inflation Venezuela will experience predicted by the International Monetary Fund. In 2017, inflation is expected to rise by more than 1,600 percent.
Venezuela's economic crisis, exacerbated by a fall in oil prices, has caused basic goods, including food and medicine, to be in short supply, unavailable or unaffordable.
"Wage adjustment announced by Maduro is like everything else he does, a scam!" Henrique Capriles Radonski, governor of Venezuela's Miranda state and a key opposition leader, said in a statement on Monday. "Without attention to inflation, income will not improve."
To deal with record-high inflation, the Central Bank of Venezuela, or BCV, in early December said it would issue new higher-value currency to aid consumers. The largest Venezuelan bolivar was the 100, which would be replaced by a 20,000 note.
Jose Guerra, an associate professor at the Central University of Venezuela's School of Economics, said the wage increase coinciding with the printing of more money "inevitably produces more inflation."
Guerra said the nominal wage increase that does not account for inflation does not aid Venezuelans seeking a real wage.
"That's already been studied," Guerra said in a statement. "Do workers deserve a salary increase? Yes. But an increase in purchasing power, not more bills with which to buy less."
Days after the BCV announced the new currency, Maduro said he was taking the 100 bolivar bill out of circulation, which caused some chaos as Venezuelans only had days to replace or deposit the 100 bolivar bills before they were deemed illegal.
Maduro would later delay the removal of the 100 bill as the replacement bills had not yet been widely circulated. The new bills are still not widely available.
"How will the government finance the salary increase? By printing money from the BCV that will occur along with the next devaluation of bolivar," Guerra added.