Brazil's National Treasury revealed on Tuesday that a real increase of R$1 in the minimum wage will generate a net fiscal impact of R$405 million for the central government in 2027. These figures are detailed in the eighth edition of the Union's Fiscal Risk Report (RRFU). The net cost is calculated from a gross increase in public spending of R$413.2 million, partially offset by an additional R$8.2 million in social security revenue collection.
According to the report, raising the minimum wage by R$1 above the inflation rate measured by the National Consumer Price Index (INPC) triggers an additional R$308.4 million in social security benefits. Furthermore, this adjustment adds R$74 million to expenditures for the Continuous Cash Benefit (BPC), increases costs for the salary bonus program by R$20 million, and raises unemployment insurance spending by R$10.2 million.
The Treasury also highlighted the fiscal sensitivity to inflation variations. A fluctuation of just 0.1 percentage points in the INPC would increase central government expenses by R$1.35 billion while boosting social security revenue by only R$13.3 million. This results in a net reduction of R$1.34 billion in the government's fiscal outcome. Specifically, a 0.1-point rise in the index costs R$1.12 billion in social security benefits, R$127.2 million in BPC payments, R$68.2 million in unemployment insurance, and R$33.3 million in salary bonuses.
Sources: CNN Brasil.