In its budget proposal for 2020, the Jair Bolsonaro administration suggested ending a policy of raising the minimum wage above inflation—which would directly affect pensions. The decision aims at saving money—as 60 percent of retirement pensions and social security benefits are equivalent to the minimum wage. So, if this base salary was to go up, government spending increases also.
For next year, the government intends not to promote any real gain to the minimum wage—proposing BRL 1,042 (USD 265.31), a 4.21-percent bump from the current BRL 998. This “raise” matches the projected inflation for the year, being good enough only to avoid a loss in purchasing power. It would save the federal administration BRL 7.6 billion—but could have negative impacts on millions of Brazilians.