The latest horrifying example of the depths of Venezuela’s economic crisis comes courtesy of the country’s struggling oil industry, where hungry roughnecks are being forced to literally sell the clothes off their back to feed themselves and their families. Reuters reports:
[Workers for Venezuela’s state-owned oil firm PDVSA] are pawning goods, maxing out credit cards, taking side jobs, and even selling PDVSA uniforms to buy food, according to Reuters’ interviews with two dozen workers, family members, and union leaders.“Every day a PDVSA worker comes to sell his overall,” said Elmer, a hawker at the biggest market in the oil city of Maracaibo, as shoppers eyed pricey rice and flour imported from neighboring Colombia. “They also sell boots, trousers, gloves and masks.”The bulk of PDVSA’s roughly 150,000 workers make from $35 to $150 a month plus some $90 dollars in food tickets, as calculated at the black market exchange rate. It is still more than many Venezuelans, but not enough, employees say.“Sometimes we let the kids sleep in until noon to save on breakfast,” said a maintenance worker who works on the shores of Maracaibo Lake, Venezuela’s traditional oil-producing area near the Colombian border. He said he has lost five kilos (11 lb) this year because of scrimping on food.
There’s a nasty cyclical effect to all of this, too: runaway inflation is making oil workers’ salaries insufficient for necessary purchases, which is leading to “worker disillusionment, absenteeism, and a brain drain” in the oil industry, which is leading to a drop in the country’s oil production, which is dragging down the entire Venezuelan economy, which in turn is hurting oil workers…etc., etc.Oil exports make up 95 percent of Venezuela’s export revenues, and a fall in output isn’t the only thing rocking the petrostate—there’s also the collapse in crude prices over the past two years from more than $110 per barrel down to around $50 today. Current prices are a very far cry from the reported $120 per barrel Caracas needs to balance its budget.Nothing is going right in Venezuela right now. It’s producing less oil and earning less cash for what it is capable of drilling, its workforce is going hungry, and its economy is locked in a death spiral, exacerbating all of these problems. And, for Caracas, things are going to get even worse before they get better.