Setting and asjusting minimum wage levels
Brazil
In Brazil, a law has established that minimum wage adjustments be determined by a formula that considers past inflation and GDP growth. In the case of inflation, the formula considers the inflation accumulated during the previous year (t-1), while for GDP, due to the lag in receiving final results, they apply the rate of increase of year t-2.
Brazil’s formula for determining adjustments (where MW is minimum wage) is as follows:
∆ MW t = ∆ CPI t-1 + ∆ GDP t-2
The law establishes that this formula should be revised every four years. It was first adopted in 2008, and renewed in 2012 and 2016.
Brazil’s formula for determining adjustments (where MW is minimum wage) is as follows:
∆ MW t = ∆ CPI t-1 + ∆ GDP t-2
The law establishes that this formula should be revised every four years. It was first adopted in 2008, and renewed in 2012 and 2016.