Effective February 1st, the national minimum wage in Brazil was raised to R$465 per month (US$201) from R$415 by order of the Brazilian president, Luiz Inacio Lula da Silva. The salary increase is expected to affect twenty percent of the Brazilian population, about 42 million people. However, each state has its own legal minimum wage, and it is common for employers to pay below the minimum wage.

The president passed a provisional order, expected to be ratified by Congress this week. Some politicians hope the move will also include incentives to prevent companies from laying off workers, since higher wages and lower demand due to the crisis may lead to job losses.

The economic crisis recently hit Brazil with the loss of 655,000 jobs in December, as well as recent lay offs in multinational companies, like Deere’s factory lay offs in January.