THE FIGHT AGAINST POVERTY
We will never eliminate the misery with the tip that comes from the excesses of the extremely rich because it will never impede that they continue doing richer. The excessive increase of the wealthy undoubtedly will cause an excessive increase of the misery and the number of those living in that condition.
Indeed, after more than 40 years of fight against poverty in a system of leftist economy where the predominant phrases were “Government for the poor”, “the rich one no longer will be fed on your poverty”, “Tributes must be paid by those who own more money”, “Land must belong to those who work in it”, “Gringo go home”, etc., indeed, most of poverty has been destroyed. Very few are in that social layer now.
But there is a problem, most of which they have left the poverty have not improved his economic condition. All the opposite, they have created the new social condition of misery or extreme poverty. In other words, it looks as if they had been given to eat Racumín (a rat poison based on dicumarol or warfarina) and they have happened to be paupers in a really happy form so that step by step they has been freed himself of obligations that should be paid by the rich ones instead. They were happy because they were endorsed by a government who fought for them; but after 40 years they watched the mirror and they were worse than before. They had made fun of them and they had realized that many of those leftist leaders now lived on a very onerous form. We asked ourselves At the cost of them?
When they were poor still they were comprised in part of the State machinery and with a sand granite those poor men contributed in the tributary structure of their country. Now however, they are neither chicha (a latin american native beberage) nor lemonade. Simply they are nothing. Now they no longer pay tributes and in return they have been gaining miserable pays, more miserable than for 40 years ago. The result is that now the poor men do not believe in the politicians “who help them”, either.
How this occurred? Why poor people became poorer in a system protecting and defending them? What were the results of fighting in their favor?
Perhaps they underestimated the fact that poor men also are a very important part in the machinery of the State. Poor people counted by millions, with their sand granite balance the other part of the scale where few rich ones contribute by far. Both are equal important. Before the poor men were a mass of consumption and now, after half century of fight against the poverty, they are a mass of paupers and they only hope a humanitarian free aid to be able to survive.
Which was the sin of this policy of leftist cut? Simply not to believe in the poor man and to remunerate its work with misery pays. Making a retrospective analysis of the peruvian problem, my native land and about 40 years ago, the salary of the President of the Republic was of about 40 minimum salaries, demonstrating in this way the abuse toward those earning minimum salaries if we pay attention to that relation in the rest of Latin American countries, that obviously was much smaller. Nowadays the salary of the President of the Republic is about one hundred minimum salaries (?); but that is not all. The current President's salary has a greater spending power of that of 40 years ago whereas the present minimum salary has less spending power. In this lapse of left tendence economy we have made richer to those earning better salaries and poorer to those earning poor salaries..
The reason of this is perhaps based, on the one hand in which the salaries of the most needed every day were weaker as a result of the frequent monetary devaluations, not only of the government of Alan Garcia but of all those governments who preceded him. The wage readjustments compensated the high pays, compensated in something the pays of the middle-class and frankly they did not compensate the low pays because being the majority millions, the state was unable to compensate the poor people salaries. We could say that we had put the first stone towards the implacable destiny of the misery.
Under the point of view of spending power, left politicians never could obtain a wage improvement for the people, although from mid last century the governments already were of leftist cut. The only benefits obtained were uncomplete wage readjustments after significant monetary devaluations and therefore, the poor and middle-class people every day gained less. Logically, to those uncomplete readjustments they called wage increase unjustly to them to calm innocents and gullibles, since they made them see that they had managed to prevail. Soon the poor protested because neither with those “mini increases” they could managed to compensate the continuous rise of the life cost. It was necessary to do something more.
If they could not obtain compensating direct increases for the middle and poor class, at least it could be possible to obtain indirect wage increases. They centered then its objectives in the tributary obligations. The left politicians asked themselves Why the poor must pay taxes? Why the rich do not pay for them instead? And that was the new goal. Little by little they were releasing of the tax burden to more and more poor people.
This operation was diminishing alarmingly the tributary base and was overloading the tribute to companies and to those “that have more money”. But as these last ones were alarmingly less, the tributary increase to them, no matter how big they were, was insufficient to compensate the State for the poor people tax exoneration and also the State became more poor, little by little. It was necessary to resort to another type of taxes like the tax to the sales that affects all and this one began to raise gradually until the values that we have nowadays.
Left politicians (specially those who come from the poverty) and the own poor people were happy with these measures as that meant that the fifty or one hundred soles (peruvian currency) of tax which before they paid, were going to be as an increase of indirect salary for them. Perhaps they thought that with this measure it was not going to be easy for the rich ones to change cars every year or make a trip to Europe or buy a yacht.
But they were really mistaken with that way of thinking. All of us know that for the companies the tax to the rent is a cost and to all costs there is price benefit so that they work with an objective of pre-established benefit on the basis of the inverted capital. This meant as well that it must have an increase in the price of his products or an increase of the production. Before an unstable and aggressive policy of this type, the industralists chose without doubt the first alternative.
Finally the tributary lightening of the poor men meant an increase of its cost of life that was much greater monthly than the fifty or one hundred released soles, demonstrating that remedy was worse than the disease. Could be interesting perhaps to mention here that the salary of the poorest sectors, being the majority, they were determined on the basis of the resources of the State and they were never conceived like part of an aggressive plan of investment with later results. If money exceeded then they were increased a little, if not then bad luck. In a disordered and corrupt state administration like ours, When is going to exceed money?
In that way, poor men population increased and the policy of tributary lightening towards them also, being integrated now those of the poor middle-class. Now they were called to enter into the poverty class and later into the misery. In compensation they were alleviated of their tax burden. The tributary base diminished still more and the imbalance was uncontrollable. The continuous loss of the spending power of the pays for the poor middle-class and down, gave rise to an every day poorer consumption of the basic necessities. The companies began to worry because nobody buys its products to them since people do not have money. They diminish the production and they dismiss employees and workers. Some of them must close definitively and look for another type of business. The prices of products raise. We have entered a negative vicious circle that increases the level of poverty.
The industralists have to do something to export their products to impede the breaking of the company but these are expensive and perhaps not too good. The subsidy comes to the minds of exporters like a desperate measurement. Between the poor countries treatments are made to import products without taxes. The poor people of our country have stopped of being a mass of consumption of Peruvian products as more attractive are the products of the neighboring countries.
When I ask other people which was Henry Ford's great vision to be able to sell in mass its famous automobile Ford “T” of the years 20 of the last century? , the inmediate answer is serial production. Few really coincids that the great profit of Henry Ford was to think that middle class people and down had to be a consumer. They are the majority so they must buy the cars, he thought. But the poor of that time could not spend more than 300 dollars in a car. The following objective was the one to produce a car at the cost of 300 dollars and it said that to the owners of the factory where it worked: the Dodge brothers.
What a madness! If cars at that time cost above 1.500 dollars. The Dodge brothers, his bosses, fired him due to his lack of criterium and he had to work his dream, in the shed of his house with his sons and working there it came to his mind the possibility of making lines of serial production to lower costs and arrive at so longed for popular mass. But that was only possible if he could sold a great amount of vehicles since the gains were going to be very small. Manufacturing in series was the solution of its great dream to see the poor class as a great potential mass of consumption.
Exactly the same we have to do with our people. We must convert them into a consuming mass for their goodness and ours. Those countries depending only on exportations for his economical stability are really wrong. Internal consumption must be our first goal. In USA probably the main tax income comes from internal consumption integrating production enterprises and cosuming people.
¿Which is the solution for our countries?
En forma general indicaremos que tenemos que regresar cuanto antes al punto de partida de hace 40 años. Años perdidos de odio, envidias, violencia y miseria. Luego cambiaremos el rumbo hacia el progreso. Aquí no soy dueño de la verdad sino simplemente un idealista liberado de las políticas economistas estereotipadas por no haber aprendido ello en ninguna universidad. Todo lo que sé es por ser un viejo observador. Nada más.
Generally speaking we must specify that we must go back 40 years and start again. Lost years of hate, envys, violence and misery. Then we must change our course towards progress. Here I am not the truth owner, just a simple idealist freed of the stereotipated economical policies for not studying them at a university. All I know is because I am an old man now. Just that.
The problem is not as simple as looking for in our pockets to see if there is an extra money and try to solve with it, the unfair situation in which we have put the majority of poor people. The solution is a matter of an economical study of great significance. It's really a challenge. It's an investment. It's a matter of again moving the state machinery in the correcy course. As all countries like our, don't have economical means of support, they will have to ask for finantial support and if there is law impeding this, then we must eliminate that law.
We must integrate again all dependents and propietors of mini personal business in the tributary structure of our country in deespict of his economical situation. Up to now there is an exoneration of rent tributes to all those earning below 2,400 soles a month (about 730 US$ dollars). All those affected by this measure must receive an inmediate increase of 60 soles (18 US$) in their monthly payment, corresponding that amount to the tribute that must be paid by those earning a minimum salary. As a second measure we must establish 10% tax (could be smaller o bigger) to the gross income with no exception. Those in the worse condition just will return the 60 soles and others will have to pay something more.
This is not and additional tax as the tax to the rent will be reduced as well but a prevention to any intent of exoneration. Rent tax will be reduced around 20% trying to normalize those abusive increases as a result of freeing poor people of their tributary obligations. This measure will invite entrerprisers to increase their production, hire more people, work in three shift and reduce the price of their products.
The third step, of course, will be a significant reduction of the rent tax, initially of the order of 15% to 20% compensating for the tax for the gross income. Steps 2 and 3 are really of simultaneous application and it shoud be there a test and trial balance in order to get a satisfactory approach. If things go well then there could be a chance to reduce selling taxes as well. Importation of machinerry for product improvement should be tax exempt.
Then we must increase the minimum wage gradually up to three or four times the current value (I have taken in midn peruvian wages) and if necessary reduce highest salaries as well. First step must drastic in the sense that at least minimum wages must be duplicated, máximun salary reduced to ist halve and readjusting consencuently all wage structure proportionally.
This changing process could be achieved in two to four years by means of three or four significant partial increments. Intermediate wages will be readjusted accordingly with the two extremes values. Logically, if in the first step things go wrong we must analize the reasons and change some influencing parameters.
Finally the maximum/minimum wage ratio of the state administration will be reduced from the current value of 100 to 15 or less. In the case of Peru where we have a monthly minimum wage of 436 soles (140 US$ or 0.70 US$/hr), we could increase its value up to 1,000 soles a month. Its not just giving money to them but recognizing better their working effort. We mus be confident of what we are doing and don't be afraid. The state and private enterprisers should expect a return to their investments in the short or medium term. We must be pacient and wait for the poor to be converted into a mas of consumption.
In short, What are we going to do? Come back to the starting point of 40 yearse ago or better in order to reasume the correct track towards a more solid and fair productive economy where the internal consumption is a very important pillar.
Where applicable, we must also try to eliminate at the most all abusive and arbitrary distortions as a product of bad applications of the concept of wages rebates and bonus and unfair retirement pensions in despite if they are now supporte by any law. Extra salaries like 16 or 20 salaries in a year must be eliminated. We must have just 12 salaries in a month. Ther must be a way to protect retirement funds in order not to be devaluated along the years. May be using a simbolic strong money as the chilean unidad de fomento (U.F.) or either the peruvian current unidad impositiva tributaria (U.I.T.) with a better exchange, let say, one unidad tributaria (U.T.), being a thousand of an UIT.
As we already said, with this measures being applied every six month or yearly, we expect to improve the quality of life of the more needed. This new wages will invite this people to create a better demand of the national products and manufacturers to increase their production hire more people and three 8 hours working turns. Unemployment will be reduced; product prices will be reduced until an equilibrium is reached. Finally, ther must be an evaluation of all the process and check in the return is appropiated to afford the investment. Then another try will be done with similar minimum wage increase and consequent general wage corrections with the neccesary checking period until the maximum wage/minimum wage ratio of 15 value is obtained.
There must be, of course, other approaches to solve this unfair situation of the more needed. This is just my point of view and I pray god to be in the way of the truth in order to get a better living for all, specially those more needed.
All third world countries have huges debts due to projects that finally failed. Nobody remembers those projects now. Why not to take a risk in this project whoose approach is to believe more in our workers and people in general? With this measure they will be again integrated to the tributary structure of the country now change to be consumers rather than beggars. Both the state and private enterprisers must invest and ask for loans to improve their wage structures of the worse paid workers.
On the side of the state, the investment return will come as a better tribute income as every one who works is paying now his correponding tribute in other words, tributary population will increase significantly. Enterprises will also contribute with their rent tax and although they were diminished substancially in their percentage the final result could be the same due to the production increase (40% of 50 is equal to 20% of 100) and finally the sales tax as a result of a better dinamic in marketing.
Under the point of view of the private enterpriser, inprovement of his incomes will be as a result of a significant decrease of their rent tax, increase in his sales due to a decrease of the sales tax (expectable), plenty of facilities to import machinery free of taxes. All this will invite him to reduce the prices of their products. In the future, a small tax (may be 1%) to the gross income could be applied, reducing as well the tax to the rent.
Hay sectores como los exportadores e importadores, como las organizaciones no productivas que pueden verse inmediatamente afectados por estas medidas y pondrán un reclamo inmediato a estas ideas y por lo cual me veré obligado a redactar otro artículo al respecto pero; creo que no se deben olvidar esos señores, especialmente los exportadores, que cuando se iniciaron estos desequilibrios que afectaron seriamente a los pobres, ellos gozaron de privilegios inauditos para poder lograr que una industria de bajísima calidad y bajo nivel de producción pudiese competir en el exterior. Me estoy refiriendo a los cambios especiales de monedas que hubieron en ciertos gobiernos como el dólar de importación y el dólar de exportación así como el famoso certex que hizo millonarios a más de uno. Claro, en esa época esos señores no se quejaron. Ni tampoco los pobres por que ni cuenta se dieron de esos abusos.
Those in the sectors of exportation and importation as well as those non productive organizations could be inmediately affected by this measures and will place a complaint to those ideas and because of that I obligue mayself to write a second article but I think this people must remember, specially the exporters, when distortions, that led poor people to the state there are now, began to appear. They obtained some unprecedented privileges in order to make possible that products of very low quality and quantity could compete in other countries. I am talking now about that unfair money award to the exporters (of not traditional products) known as "certex" in which the exporter received a check from the government paying back an amount of 38% the exportation value, making some millionar peoplea. There was also an unfair exchange to the dollar in order to benefit the importers. In the nineteen seventies when the current excange was 60 soles per dollar, the importation dollar was around 40 soles per dollar.
We will never eliminate the misery with the tip that comes from the excesses of the extremely rich because it will never impede that they continue doing richer. The excessive increase of the wealthy undoubtedly will cause an excessive increase of the misery and the number of those living in that condition.
THE FIGHT AGAINST POVERTY
Indeed, after more than 40 years of fight against poverty in a system of leftist economy where the predominant phrases were “Government for the poor”, “the rich one no longer will be fed on your poverty”, “Tributes must be paid by those who own more money”, “Land must belong to those who work in it”, “Gringo go home”, etc., indeed, most of poverty has been destroyed. Very few are in that social layer now.
But there is a problem, most of which they have left the poverty have not improved his economic condition. All the opposite, they have created the new social condition of misery or extreme poverty. In other words, it looks as if they had been given to eat Racumín (a rat poison based on dicumarol or warfarina) and they have happened to be paupers in a really happy form so that step by step they has been freed himself of obligations that should be paid by the rich ones instead. They were happy because they were endorsed by a government who fought for them; but after 40 years they watched the mirror and they were worse than before. They had made fun of them and they had realized that many of those leftist leaders now lived on a very onerous form. We asked ourselves At the cost of them?
When they were poor still they were comprised in part of the State machinery and with a sand granite those poor men contributed in the tributary structure of their country. Now however, they are neither chicha (a latin american native beberage) nor lemonade. Simply they are nothing. Now they no longer pay tributes and in return they have been gaining miserable pays, more miserable than for 40 years ago. The result is that now the poor men do not believe in the politicians “who help them”, either.
How this occurred? Why poor people became poorer in a system protecting and defending them? What were the results of fighting in their favor?
Perhaps they underestimated the fact that poor men also are a very important part in the machinery of the State. Poor people counted by millions, with their sand granite balance the other part of the scale where few rich ones contribute by far. Both are equal important. Before the poor men were a mass of consumption and now, after half century of fight against the poverty, they are a mass of paupers and they only hope a humanitarian free aid to be able to survive.
Which was the sin of this policy of leftist cut? Simply not to believe in the poor man and to remunerate its work with misery pays. Making a retrospective analysis of the peruvian problem, my native land and about 40 years ago, the salary of the President of the Republic was of about 40 minimum salaries, demonstrating in this way the abuse toward those earning minimum salaries if we pay attention to that relation in the rest of Latin American countries, that obviously was much smaller. Nowadays the salary of the President of the Republic is about one hundred minimum salaries (?); but that is not all. The current President's salary has a greater spending power of that of 40 years ago whereas the present minimum salary has less spending power. In this lapse of left tendence economy we have made richer to those earning better salaries and poorer to those earning poor salaries..
The reason of this is perhaps based, on the one hand in which the salaries of the most needed every day were weaker as a result of the frequent monetary devaluations, not only of the government of Alan Garcia but of all those governments who preceded him. The wage readjustments compensated the high pays, compensated in something the pays of the middle-class and frankly they did not compensate the low pays because being the majority millions, the state was unable to compensate the poor people salaries. We could say that we had put the first stone towards the implacable destiny of the misery.
Under the point of view of spending power, left politicians never could obtain a wage improvement for the people, although from mid last century the governments already were of leftist cut. The only benefits obtained were uncomplete wage readjustments after significant monetary devaluations and therefore, the poor and middle-class people every day gained less. Logically, to those uncomplete readjustments they called wage increase unjustly to them to calm innocents and gullibles, since they made them see that they had managed to prevail. Soon the poor protested because neither with those “mini increases” they could managed to compensate the continuous rise of the life cost. It was necessary to do something more.
If they could not obtain compensating direct increases for the middle and poor class, at least it could be possible to obtain indirect wage increases. They centered then its objectives in the tributary obligations. The left politicians asked themselves Why the poor must pay taxes? Why the rich do not pay for them instead? And that was the new goal. Little by little they were releasing of the tax burden to more and more poor people.
This operation was diminishing alarmingly the tributary base and was overloading the tribute to companies and to those “that have more money”. But as these last ones were alarmingly less, the tributary increase to them, no matter how big they were, was insufficient to compensate the State for the poor people tax exoneration and also the State became more poor, little by little. It was necessary to resort to another type of taxes like the tax to the sales that affects all and this one began to raise gradually until the values that we have nowadays.
Left politicians (specially those who come from the poverty) and the own poor people were happy with these measures as that meant that the fifty or one hundred soles (peruvian currency) of tax which before they paid, were going to be as an increase of indirect salary for them. Perhaps they thought that with this measure it was not going to be easy for the rich ones to change cars every year or make a trip to Europe or buy a yacht.
But they were really mistaken with that way of thinking. All of us know that for the companies the tax to the rent is a cost and to all costs there is price benefit so that they work with an objective of pre-established benefit on the basis of the inverted capital. This meant as well that it must have an increase in the price of his products or an increase of the production. Before an unstable and aggressive policy of this type, the industralists chose without doubt the first alternative.
Finally the tributary lightening of the poor men meant an increase of its cost of life that was much greater monthly than the fifty or one hundred released soles, demonstrating that remedy was worse than the disease. Could be interesting perhaps to mention here that the salary of the poorest sectors, being the majority, they were determined on the basis of the resources of the State and they were never conceived like part of an aggressive plan of investment with later results. If money exceeded then they were increased a little, if not then bad luck. In a disordered and corrupt state administration like ours, When is going to exceed money?
In that way, poor men population increased and the policy of tributary lightening towards them also, being integrated now those of the poor middle-class. Now they were called to enter into the poverty class and later into the misery. In compensation they were alleviated of their tax burden. The tributary base diminished still more and the imbalance was uncontrollable. The continuous loss of the spending power of the pays for the poor middle-class and down, gave rise to an every day poorer consumption of the basic necessities. The companies began to worry because nobody buys its products to them since people do not have money. They diminish the production and they dismiss employees and workers. Some of them must close definitively and look for another type of business. The prices of products raise. We have entered a negative vicious circle that increases the level of poverty.
The industralists have to do something to export their products to impede the breaking of the company but these are expensive and perhaps not too good. The subsidy comes to the minds of exporters like a desperate measurement. Between the poor countries treatments are made to import products without taxes. The poor people of our country have stopped of being a mass of consumption of Peruvian products as more attractive are the products of the neighboring countries.
When I ask other people which was Henry Ford's great vision to be able to sell in mass its famous automobile Ford “T” of the years 20 of the last century? , the inmediate answer is serial production. Few really coincids that the great profit of Henry Ford was to think that middle class people and down had to be a consumer. They are the majority so they must buy the cars, he thought. But the poor of that time could not spend more than 300 dollars in a car. The following objective was the one to produce a car at the cost of 300 dollars and it said that to the owners of the factory where it worked: the Dodge brothers.
What a madness! If cars at that time cost above 1.500 dollars. The Dodge brothers, his bosses, fired him due to his lack of criterium and he had to work his dream, in the shed of his house with his sons and working there it came to his mind the possibility of making lines of serial production to lower costs and arrive at so longed for popular mass. But that was only possible if he could sold a great amount of vehicles since the gains were going to be very small. Manufacturing in series was the solution of its great dream to see the poor class as a great potential mass of consumption.
Exactly the same we have to do with our people. We must convert them into a consuming mass for their goodness and ours. Those countries depending only on exportations for his economical stability are really wrong. Internal consumption must be our first goal. In USA probably the main tax income comes from internal consumption integrating production enterprises and cosuming people.
¿Which is the solution for our countries?
En forma general indicaremos que tenemos que regresar cuanto antes al punto de partida de hace 40 años. Años perdidos de odio, envidias, violencia y miseria. Luego cambiaremos el rumbo hacia el progreso. Aquí no soy dueño de la verdad sino simplemente un idealista liberado de las políticas economistas estereotipadas por no haber aprendido ello en ninguna universidad. Todo lo que sé es por ser un viejo observador. Nada más.
Generally speaking we must specify that we must go back 40 years and start again. Lost years of hate, envys, violence and misery. Then we must change our course towards progress. Here I am not the truth owner, just a simple idealist freed of the stereotipated economical policies for not studying them at a university. All I know is because I am an old man now. Just that.
The problem is not as simple as looking for in our pockets to see if there is an extra money and try to solve with it, the unfair situation in which we have put the majority of poor people. The solution is a matter of an economical study of great significance. It's really a challenge. It's an investment. It's a matter of again moving the state machinery in the correcy course. As all countries like our, don't have economical means of support, they will have to ask for finantial support and if there is law impeding this, then we must eliminate that law.
We must integrate again all dependents and propietors of mini personal business in the tributary structure of our country in deespict of his economical situation. Up to now there is an exoneration of rent tributes to all those earning below 2,400 soles a month (about 730 US$ dollars). All those affected by this measure must receive an inmediate increase of 60 soles (18 US$) in their monthly payment, corresponding that amount to the tribute that must be paid by those earning a minimum salary. As a second measure we must establish 10% tax (could be smaller o bigger) to the gross income with no exception. Those in the worse condition just will return the 60 soles and others will have to pay something more.
This is not and additional tax as the tax to the rent will be reduced as well but a prevention to any intent of exoneration. Rent tax will be reduced around 20% trying to normalize those abusive increases as a result of freeing poor people of their tributary obligations. This measure will invite entrerprisers to increase their production, hire more people, work in three shift and reduce the price of their products.
The third step, of course, will be a significant reduction of the rent tax, initially of the order of 15% to 20% compensating for the tax for the gross income. Steps 2 and 3 are really of simultaneous application and it shoud be there a test and trial balance in order to get a satisfactory approach. If things go well then there could be a chance to reduce selling taxes as well. Importation of machinerry for product improvement should be tax exempt.
Then we must increase the minimum wage gradually up to three or four times the current value (I have taken in midn peruvian wages) and if necessary reduce highest salaries as well. First step must drastic in the sense that at least minimum wages must be duplicated, máximun salary reduced to ist halve and readjusting consencuently all wage structure proportionally.
This changing process could be achieved in two to four years by means of three or four significant partial increments. Intermediate wages will be readjusted accordingly with the two extremes values. Logically, if in the first step things go wrong we must analize the reasons and change some influencing parameters.
Finally the maximum/minimum wage ratio of the state administration will be reduced from the current value of 100 to 15 or less. In the case of Peru where we have a monthly minimum wage of 436 soles (140 US$ or 0.70 US$/hr), we could increase its value up to 1,000 soles a month. Its not just giving money to them but recognizing better their working effort. We mus be confident of what we are doing and don't be afraid. The state and private enterprisers should expect a return to their investments in the short or medium term. We must be pacient and wait for the poor to be converted into a mas of consumption.
In short, What are we going to do? Come back to the starting point of 40 yearse ago or better in order to reasume the correct track towards a more solid and fair productive economy where the internal consumption is a very important pillar.
Where applicable, we must also try to eliminate at the most all abusive and arbitrary distortions as a product of bad applications of the concept of wages rebates and bonus and unfair retirement pensions in despite if they are now supporte by any law. Extra salaries like 16 or 20 salaries in a year must be eliminated. We must have just 12 salaries in a month. Ther must be a way to protect retirement funds in order not to be devaluated along the years. May be using a simbolic strong money as the chilean unidad de fomento (U.F.) or either the peruvian current unidad impositiva tributaria (U.I.T.) with a better exchange, let say, one unidad tributaria (U.T.), being a thousand of an UIT.
As we already said, with this measures being applied every six month or yearly, we expect to improve the quality of life of the more needed. This new wages will invite this people to create a better demand of the national products and manufacturers to increase their production hire more people and three 8 hours working turns. Unemployment will be reduced; product prices will be reduced until an equilibrium is reached. Finally, ther must be an evaluation of all the process and check in the return is appropiated to afford the investment. Then another try will be done with similar minimum wage increase and consequent general wage corrections with the neccesary checking period until the maximum wage/minimum wage ratio of 15 value is obtained.
There must be, of course, other approaches to solve this unfair situation of the more needed. This is just my point of view and I pray god to be in the way of the truth in order to get a better living for all, specially those more needed.
All third world countries have huges debts due to projects that finally failed. Nobody remembers those projects now. Why not to take a risk in this project whoose approach is to believe more in our workers and people in general? With this measure they will be again integrated to the tributary structure of the country now change to be consumers rather than beggars. Both the state and private enterprisers must invest and ask for loans to improve their wage structures of the worse paid workers.
On the side of the state, the investment return will come as a better tribute income as every one who works is paying now his correponding tribute in other words, tributary population will increase significantly. Enterprises will also contribute with their rent tax and although they were diminished substancially in their percentage the final result could be the same due to the production increase (40% of 50 is equal to 20% of 100) and finally the sales tax as a result of a better dinamic in marketing.
Under the point of view of the private enterpriser, inprovement of his incomes will be as a result of a significant decrease of their rent tax, increase in his sales due to a decrease of the sales tax (expectable), plenty of facilities to import machinery free of taxes. All this will invite him to reduce the prices of their products. In the future, a small tax (may be 1%) to the gross income could be applied, reducing as well the tax to the rent.
Hay sectores como los exportadores e importadores, como las organizaciones no productivas que pueden verse inmediatamente afectados por estas medidas y pondrán un reclamo inmediato a estas ideas y por lo cual me veré obligado a redactar otro artículo al respecto pero; creo que no se deben olvidar esos señores, especialmente los exportadores, que cuando se iniciaron estos desequilibrios que afectaron seriamente a los pobres, ellos gozaron de privilegios inauditos para poder lograr que una industria de bajísima calidad y bajo nivel de producción pudiese competir en el exterior. Me estoy refiriendo a los cambios especiales de monedas que hubieron en ciertos gobiernos como el dólar de importación y el dólar de exportación así como el famoso certex que hizo millonarios a más de uno. Claro, en esa época esos señores no se quejaron. Ni tampoco los pobres por que ni cuenta se dieron de esos abusos.
Those in the sectors of exportation and importation as well as those non productive organizations could be inmediately affected by this measures and will place a complaint to those ideas and because of that I obligue mayself to write a second article but I think this people must remember, specially the exporters, when distortions, that led poor people to the state there are now, began to appear. They obtained some unprecedented privileges in order to make possible that products of very low quality and quantity could compete in other countries. I am talking now about that unfair money award to the exporters (of not traditional products) known as "certex" in which the exporter received a check from the government paying back an amount of 38% the exportation value, making some millionar peoplea. There was also an unfair exchange to the dollar in order to benefit the importers. In the nineteen seventies when the current excange was 60 soles per dollar, the importation dollar was around 40 soles per dollar.
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