Contrary to what modern thinkers proclaim, the intervention of the State in labor relations needs to be deepened rather than minimized. With all the limitations on efficiency, the power of the State is what can counterbalance (even if precariously) the disproportion in power relations.

The Theater of Labor Reform

João José Sady*

In the theatre of Brazilian politics, the assault on Labor Law promoted in the last years of the Cardoso government was very serious. Now, the deceitful discourse about the need to reform labor laws has returned.

Suppressing labor rights will not create jobs. The main factor in luring workers into giving up their rights is the seduction of economic growth: Let's tighten our belts and we will grow. However, today economic growth is merely the growth of capitalistic accumulation. Our country has developed intensely but the people, in reality, have stagnated. In 1977, Brazil's GDP was US$187 million and in 1998 it was US$777 million. During this period, the country multiplied its production of wealth four-fold and even so, inequality remained stable throughout.

In 1977, the country's poorest 20% kept 2.4% of the domestic income, while the richest 20% made 66.6%. However, in 1998, the poorest had their income reduced to 2.2% of the domestic income, while the richest kept 64.2%. Over two decades, the GDP grew 400% yet there was no redistribution of income. In 1992, a worker in the textile industry produced 3 tons of textiles per year. Today, the same worker produces 5 times more.

Brazil is not a poor country. It is an unfair country. The Labor Law, by imposing limitations on the power of the bosses, exercises some restrictions on the aggravation of this devastating problem. Reducing labor rights does not contribute to economic growth because the market has much more powerful mechanisms to obtain cost reductions. The truth is that "the greatest challenge in Brazil is the alliance of economic growth with the creation of jobs, the distribution of wealth and the reduction of social and regional inequalities" .
Contrary to what modern thinkers proclaim, the intervention of the State in labor relations needs to be deepened, rather than minimized. The power of the State is what can counterbalance (even if precariously) this disproportion in power relations.

The Labor Law must remain untouched in its essential points and function as support legislation, guaranteeing the minimal protection of workers, and representing a barrier of resistance against the precariousness of contracts, preventing unbridled outsourcing, and the fraudulent use of "cooperative labor". Collective bargaining needs legislation that will lead to negotiation, primarily over the guarantee of individual contracts.

We also need legislation on the right to information on the true conditions of the business in order to discuss with the actual ability of the employer with regard to collecting claims. The union structure that will negotiate this new territory of collective bargaining will not have sufficient ability to fight if it is not given new tools such as company-wide union representation through the legalization of the central unions. The union structure has to be made healthy through the elimination of union dues and the institution of solidarity quotas.

In summary, the question is much more complex than some people think. The State cannot remove itself from conflict between capital and labor.

*João José Sady is a Lawyer, Doctor of Law in Social Relations at the Catholic University of São Paulo and a professor of the Law School at the University of São Francisco, in São Paulo.