• Categories
  • Archives

Brazil’s Minimum Wage: Government and Unions Adopt Hard Line on Negotiations

Brazilian real and the minimum wage Brazil’s labor Union Força Sindical says it will insist on a minimum wage of 580 reais (US$ 344) while the Brazilian government also deciding to take a hard line, insists on R$ 545 (US$ 324). The union also wants a correction of the income tax tables of 6.5% (the government wants 4.6%) and a 10% adjustment in benefits paid to retirees receiving more than a minimum wage.

A minimum wage of 580 reais would add over 7 billion (US$ 4.2 billion) annually to the social security system deficit. Revenue loss from the income tax correction the union wants would be close to 2 billion reais (US$ 1.2 billion).

The government has not said anything about the 10% benefit increase for retirees who receive more than the minimum wage.

Labor unions had a meeting with the president’s top administrative aide (Secretaria-Geral da Presidência), Gilberto Carvalho.

However, before the meeting, Paulo Pereira da Silva, president of the Força Sindical, said he could accept a minimum wage of 560 reais. And a government spokesperson reportedly said that 550 reais was possible.

In Brazil the minimum wage (presently 540 reais per month) has a broad and deep impact. This is especially true at the municipal level.

According to Paulo Ziulkoski, president of the National Confederation of Municipalities (CNM), even if the Dilma Rousseff administration gets its way and the minimum rises to only 545 reais, it will still mean an additional cost to local government payrolls of 1.3 billion reais (US$ 772 million) annually.

“Between 2003 and 2010, successive real increases in the minimum wage cost municipalities an additional 10.8 billion reais (US$ 6.41 billion). That is money that could be spent on other things. Our hands are tied by a series of norms, mainly the Fiscal Responsibility Law,” declared Ziulkoski.

This law establishes a limit of 54% for city hall payroll expenditures plus another 6% that the city legislative body can spend on its payroll.

Ziulkoski explained that most Brazilian municipalities operate at the very limit of the Fiscal Responsibility Law: 60% of municipal revenue going to payrolls.

There is also the problem that at the local level the number of civil servants who receive the minimum wage is high (around 5.3 million Brazilians are employed by local governments). So, when the minimum wage goes up more than inflation, the mayor’s payroll expenditures go above the limit and his administration is penalized. At the same time he cannot fire anybody or create other sources of revenue, explains Ziulkoski.

ABr

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

23% of Brazil’s Grain Grows in Paraní¡

With 350,000 rural properties, and occupying an area of just 2.3% of the country ...

Carbon Credits to Be Traded at Brazil’s Stock Exchange

The project establishing the Brazilian Greenhouse Gas Emissions Reduction Market (MBre), or carbon credits ...

Déjà Vu: Lula da Silva Quadros

Six months ago, who would be deranged enough to predict that public servants would ...

Brazil’s Trade Surplus Keeps Growing. It’s Already Over US$ 31 Billion.

Brazilian shipments abroad resumed their growth pace last week, when the country exported products ...

Brazil’s Residential Developer Gafisa Gets US$ 50 Million US Infusion

Equity International, the privately-held international real estate investment company of Sam Zell’s Equity Group ...

Brazil’s Varig: What an Airline Shouldn’t Be

In nearly eight decades of operation in the country, Brazilian civil aviation has been ...

Brazil’s Gutsy and Spirited War Against Microsoft

After five months of  being unemployed, Catarine Fernandes, 25, applied for a secretary job ...

International Group NtDDi Wants to See Zero Tax for Drugs in Brazil

The No Taxes on Drugs and Devices Initiative (NtDDi), an international coalition of scholars ...

Iranian Ambassador in Brazil Says Iran Cannot Accept Lula’s Offer of Asylum to Widow

Talking to Brazil’s government news agency Agência Brasil, the Iranian ambassador in Brazilian capital ...