Retirement and minimum wage could exceed R$1.300 in 2023

The Brazilian worker ended up being less than satisfied with the new minimum wage recently issued by the government. This dissatisfaction is largely due to high inflation, and it doesn't look like it's going down anytime soon.

Therefore, the new values, ultimately, will not have much impact on the purchasing power of Brazilians. In fact, with this growth comes a problem: Income Tax (IR).

As salaries increase, but there is no update on the IR form, people who receive the two minimum wages start to pay taxes. As the table has not been revised for many years, it does not take into account the current rise in inflation. This is exactly what led to this evil that has put many to sleep.

Regarding IR, we know that this could still change, but only if the government updates the table. Meanwhile, workers may be a little more optimistic that minimum wages and pensions could increase in light of this readjustment.

The current value of the minimum wage is R$1.212. So far, the expected value for next year is 1.294 reais. Therefore, the adjustment is slightly higher than 6%. As a result, the value was lower than inflation expectations.

This is because the expectation is that 2022 will reach 7,67%. If the minimum wage were readjusted to meet this value, the new salary would have to be changed by 7,67%.

But it doesn't end there, as inflation continues to rise and could surprise everyone. The 12-month accumulated rate is considered to be 11,89%. Therefore, the minimum wage must be higher.

Given these numbers, the minimum wage should be R$1.356,10, a value that is far from the current reality and any realistic projection.

All of this also applies to retirees, who also follow the minimum wage values. In this way, it is expected that – whatever happens – salaries will end up being lower than inflation.

The new adjustment should happen, a small consolation for workers and retirees, but it will not stop Brazilians from fighting inflation for another year.

It is worth remembering that Brazil is experiencing the worst inflation in the last 26 years. Today, we have the fourth highest inflation rate in the world, after Russia (17,1%), Argentina (58%) and Turkey (73,5%).