Comparing the gains in wage readjustments with the losses owing to “rotation” in the first half of 2004, we had around 5.1 million workers hired and 4 million workers laid off. Rotation brought an average salary loss of 40% for those who were rehired.

BRAZIL, WHY SO MUCH UNEMPLOYMENT?

 * Paulo César Pedrini

 In 2004, despite the government’s insistence on emphasizing a slight economic recuperation in the country, there was no significant impact on job creation. In this article, we will attempt to analyze some elements that lead us to this conclusion.

 In the field of wage negotiations, the first half of 2004 brought a favorable balance to workers. Around 80% indicated adjustment percentages equal or superior to the accumulated variations of the National Index of Consumer Prices (INPC), calculated by the Brazilian Institute of Geography and Statistics (IBGE). This is the conclusion of the Inter-Syndicate Department of Statistics and Socio-Economic Studies, beginning with the analysis of information registered in the System of Salary Accompaniments.

 Studies show that 47% of the negotiations resulted in real gains for the workers. That is to say, they had fixed indices of readjustment higher than the necessary percentages needed for the replacement of wage losses, according to INPC-IBGE. In 21% of the cases, the readjustment won was inferior, and in 32% it was exactly equal to this indicator.

 This recovery in salary negotiations is explained in part by the reversion of various negative macro-economic aspects which had made wage negotiations difficult in the previous year. The salary losses registered in 2003, together with the ongoing economic recuperation, were the main arguments used by the workers at the negotiating table.

 However, around 25% of workers at the higher level of income are out of the labor market. This clearly shows that it is wrong to believe that unemployment affects only those who supposedly are not prepared for the changes in today’s market, and consequently are not meeting its demands. With this data, we see that unemployment today touches all social levels, which had not occurred earlier.

 Another important fact is that because of the great quantity of labor force available, the workers who are hired are earning around 15% less than in previous years. That is to say, because of the huge contingent of unemployed people, the employers are paying a smaller wage for the same type of work.

 Comparing the gains in wage readjustments with the wage losses due to rotation, in the first half of 2004 we had around 5.1 million workers hired and 4 million laid off. The rotation brought an average wage loss of 40% for those who were rehired.

 The labor market has undergone profound transformations, with the closing of millions of workplaces, particularly in industry and mechanized agriculture; the precariousness of employment and its transfer to the informal market, marked by complete insecurity; and the absence of support for labor legislation.

 Along with this, the formal labor market is under the threat of “flexibilization” and reform. The reform proposal presented by the National Labor Forum contains significant losses for Brazilian workers.

 Regarding the changes in the system of labor relations (contracts and negotiations), the agreements will be able to be negotiated by the central unions and confederations without the necessity of approval at the base, that is, a unionism at the top. And in these negotiations even rights guaranteed by law can be eliminated. The negotiation would undermine the labor law itself. This model allows the Labor Ministry to intervene in the unions, which is a step backward in relation to union autonomy. 

 Another point of the proposed reform authorizes the hiring of substitute workers during strikes. The proposal restricts the right to strike and opens the way for the negotiated agreement to prevail over labor rights.

 For all these reasons, we consider the union reform proposed to be an unprecedented step backward for the working class, since it establishes the strengthening of the central unions and the weakening of the local unions. That is to say, it significantly reduces union autonomy.

 In order to deal with the complex problem of unemployment, it’s necessary to promote income distribution. One proposal is the reduction of the work day and the end of extra hours, which can create more jobs and also improve the quality of life for the workers. Brazil has an enormous potential to create jobs, above all by investing massively in the demands of social movements, such as the building of schools and hospitals, in basic sanitation and in popular housing. Agrarian reform would also create millions of jobs.

 However, all this requires an effective action of the State in assuming its responsibility to guarantee basic rights. It is appropriate here to question if this is possible while the government is sending a huge quantity of public money to pay interest on the foreign debt.

 As the Brazilian Bishops wrote in their message on May Day (International Workers’ Day), “the creditors can hope, the unemployed cannot”.

* Paulo César Pedrini – Historian and Coordinator of the  Metropolitan Workers’ Pastoral of São Paulo.