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 When created in 1940 by President Getúlio Vargas,
the Brazilian minimum wage had considerably greater
buying power than today. Now, a person
can barely eat with this money.
By Francesco Neves
The so-called cesta básica (basic basket) is a list of 13 food items (meat,
milk, beans, rice, wheat flour [manioc flour in the Northeast], potato, tomato, bread,
coffee, banana, sugar, oil and butter) in an amount sufficient to maintain a family of
four for a month. This measurement was created by the Brazilian government to, among other
things, evaluate how far its annual minimum wage increase will go in giving purchasing
power to those workers whose salaries are tied to the minimum (mainly public workers and
retirees). By this criterion the new minimum wage in force since April 1st is
doing little to improve the standard of living of the poorest.
While the 19.2 percent raise will inject $1 billion a month into the economy and touch
the lives of 37.7 million workers, the new salary (180 reais or roughly $84) it barely
pays for a cesta básica. A worker needs 63.8 percent of the minimum (compare this
to 15 percent in the US and 13 percent in Germany) to buy that food basket and will have
to make do with $30 for all other expenses including medicine, transportation and leisure.
If there's any consolation, with the previous minimum ($70), a worker had to spend 76
percent to acquire the basket, leaving $17 for all other expenses.
When created in 1940 by President Getúlio Vargas, the minimum had considerably greater
buying power. At that time a worker needed 39% of his salary to get the cesta. What
would be an adequate minimum to meet the basic needs of a Brazilian living in big city
today? According to DIEESE (Departamento Intersindical de Estatísticas e Estudos
Socio-Econômicos—Inter-union Department of Statistics and Socio-Economic Studies),
to pay for enough food, clothing, transportation and leisure, a worker would need to
receive a monthly minimum wage of $480.
According to President Fernando Henrique Cardoso, who went to TV to announce the new
minimum, "since the beginning of the Plano Real, in 1994, until today, the buying
power of the minimum wage grew 40 percent compared to the National Index of Consumer Price
and 100 percent in relation to the cesta básica."
Studies by the Finance Ministry reveal that close to 23 million Brazilians (13.9
percent of the population) still make less than the minimum. As gloomy as these numbers
might seem, they look good when compared to the situation in the '60s when 70 percent of
the wage earners working under contract were receiving the minimum wage.
For Antonio Carlos Spis, president of São Paulo's CUT (Central Única dos
Trabalhadores—Workers Unified Central) the new minimum is "ludicrous and shows
the pauperization of the Brazilian people. This is the smallest minimum wage of Mercosul.
It's smaller than the one from Paraguay." The minimum in that neighboring country,
$176, is more than twice that of Brazil's. CUT is in favor of a minimum of $120, which is
the salary suggested by Mercosul.
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