Brazil’s Labor Leaders Lose Their First Tug-of-War with President Rousseff

Brazilian working card It was a major legislative victory for Dilma Rousseff, new Brazilian president. Brazil’s Lower House approved a government proposal to limit a minimum wage increase to 545 reais (US$ 328) a month. It was the president’s first show of power and leadership. The proposal will be voted on in the Senate next week, where it is expected to be approved. 

A bigger rise, as sought by labor unions, could have derailed Rousseff’s drive to rein in public spending and tame inflation that hit a six-year high near 6% last year as the economy boomed. The government last week announced US$ 30 billion in budget cuts for 2011.

Rousseff might come under growing pressure to backtrack on some of those cuts and has already signaled she may fall short of pledges for sweeping economic reform.

In theory, the government holds a comfortable majority in both houses of Congress. But due to weak party loyalty, it has had to cajole and court coalition members, including its own Labor minister.

The result by a strong majority in the Chamber showed Rousseff’s ability to harness her coalition even on issues sensitive to her constituents.

Still, Rousseff, who took office on January 1, risks her as yet untested popularity by pushing austerity, although analysts say she can afford to use up some of the political capital she gained in the election.

Rousseff’s predecessor, former union leader Luiz Inácio Lula da Silva, oversaw a nearly 60% rise in the real value of the wage between 2002 and 2010 that helped lift millions from poverty and kept his popularity at record highs.

Union leaders, who wanted an increase to at least 580 reais (US$ 349), had accused Rousseff of using inflation as an excuse to push an agenda of fiscal austerity that will hurt the poor and working class most.

The minimum wage is used to calculate a range of state salaries and benefits, including pensions for nearly 19 million Brazilians. Each additional real adds nearly 300 million Real (US$ 181 million) to annual government spending and stimulates an economy already stretched to its limit.

Mercopress

Tags:

Ads

You May Also Like

Brazil’s Industry Output Grows Meager 0.1% After 4 Months of Decline

Brazilian industrial output rose 0.1% in October, interrupting four consecutive months of decreases, reports ...

Wallerstein on Brazil’s Surge and the Decline of the US Empire

In the course of his visit to the Southern Cone of South America, the ...

Brazil’s African Small Business Effort Bearing Fruit

One year after introduction of the Empreender program in African countries, the project is ...

In Brazil’s WSF Many Still Believe Another World Is Possible

Back to its origins, and back to the future (some hope), the World Social ...

Brazilian Rains Kill Dozens and Broken Dam Leaves Thousands Without Shelter

Heavy rains in southeastern Brazil have already killed at least 37 people since the ...

Showcase Town

Finished the trance, the old man stood up and took the grandson in his ...

Brazil’s Development Bank Posts US$ 2.5 Billion in Profits

Brazil's BNDES (Banco Nacional de Desenvolvimento Econômico e Social – National Bank for Economic ...

Obama: The Same Who Want US Out of LatAm Now Say We Don’t Interfere Enough

American President Barack Obama joined Friday a controversy boiling in South America by denying ...

RAPIDINHAS

Serious remaining economic and social challenges notwithstanding, Brazil appears to have ‘arrived’ although Brazilians ...

Brazil’s Parallel Society: Where Outlaws Are the Law

The Constitution of Brazil says, in its Article 144, that the right to security ...