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The Challenge to Democracy in Brazil

TUC report
Report type
Research and reports
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Labour rights and austerity

Since 2016, Brazil’s working class has come under sustained attack from successive governments. As has happened worldwide, big capital and its allies have sought to reverse the advances made through the collective struggle of organised labour. The assault on labour has taken two main forms. The first is a labour reform that has severely weakened Brazil’s trade union movement and collective bargaining in the country. The second is a constitutional amendment (PEC 55) that has compelled governments to implement austerity measures for two decades.

Meanwhile, Brazil has become a more hostile place for trade unionists. From being ranked by the ITUC as the second-best country for workers in Latin America in 2016, it has been considered one of the ten worst countries in the world for working people for the last three years.21 Since Bolsonaro took power, four trade unionists have been murdered, and there have been repeated reports of violent police suppression of strikes, with organisers beaten up, and trade union leaders facing death threats and arbitrary arrest.

Both the labour reforms and austerity regime have undermined Brazil’s ability to protect its population during the Covid-19 pandemic. Junéia Martin Batista, Women’s Officer of the Central Única dos Trabalhadores (CUT), summarised the dramatic impact of these reforms:

"The labour ‘deform’ 22  of November 2017, as well as the PEC 55 of August 2016, in addition to the social security deform of 2019, on top of the Coronavirus pandemic of 2020, in my opinion, have had an absolutely nefarious impact on the life of the working class [...]. The PEC 55 freezes “spending” for 20 years – until 2036 – with health and social assistance being the main areas affected. That means fewer health centres, fewer hospitals, fewer medical check-ups for women, less day care, fewer social services. The labour reform allows hiring without formal contracts, without social protection. The social security reform further increases the working time required to receive a pension, without taking care work into account."

  • 21 ITUC, Global Rights Index 2021 
  • 22 Junéia used the term "deforma" (deformation) rather than "reforma" (reform) as a pun to highlight the perverse motives and impacts of these legislative changes.

Beginning with a series of strikes in the late 1970s, Brazilian workers created one of the strongest and most militant trade union movements in the world. Known as the ‘new unionism’, Brazil’s movement of self-organised workers contributed to mass mobilisations and, ultimately, the end of military rule. Ironically, by the time Lula, a former metalworker and trade union leader, was elected president, trade unions had generally become a less influential force in Brazilian politics following a period of rapid deindustrialisation, the privatisation of state-owned enterprises, and workforce flexibilisation.

While the early years of the 21st century saw contradictory processes, including improved pay and new protections for workers, but also increased use of outsourcing, since 2016, there has been a fierce and sustained attack on workers’ rights. In particular, representatives of big business have taken advantage of the ascendancy of the right to lobby fiercely for the further flexibilisation of labour. However, there are divisions in this alliance. Some of Bolsonaro’s corporate allies are unsatisfied with the speed of deregulation and with the state of the economy during the pandemic. While he maintains close ties with agribusiness and retail, some business leaders have opened dialogue with the PT.23

This section outlines the impact of austerity on the Brazilian economy and the working class, detailing the severity of labour reforms and the impact of austerity on the country’s response to Covid-19. It also explores countervailing forces and forms of resistance and organising that are emerging in opposition the Bolsonaro government.

  • 23 Audi A and Bispo, A, “O Agro é Golpe”, The Intercept, August 21, 2021
Activists of the CUT demonstrate against Bolsonaro
Activists of the CUT demonstrate against Bolsonaro

Austerity: Rousseff to Temer

Following more than a decade of relatively steady growth and declining poverty, in 2014 Brazil fell into recession, hit hard by a collapse in commodity prices. The economy shrank by 3.8 per cent in 2015 and 3.6 per cent in 2016, by which time unemployment had risen to 12 per cent of the working population. 24 Following her re-election in 2014, Dilma Rousseff raised interest rates and cut government expenditure on public services and social programmes. However, a concerted programme of austerity would only be implemented once Rousseff had been ousted from office in 2016.

Just a few months after assuming the presidency, Michel Temer pushed a constitutional amendment (PEC 55) through Congress that limited public spending increases to the projected inflation rate. This amounts to a freeze on spending on health, education, and social assistance, even as the population grows. Described as ‘the harshest austerity programme in the world’ by economist Laura Carvalho, the bill delinks social spending from GDP growth.25  The earliest it can be overturned is 2026. Even then, a change would require a three-fifths majority in Congress.

It is hard to overstate the devastating effects of this amendment on Brazil’s fragile welfare state. Indeed it directly contravenes the Brazilian constitution’s commitment to guaranteeing social rights – in 2017, the government underspent on the minimum health budget guaranteed by the Constitution by the equivalent of 100 million pounds. In 2018, the Lancet warned that “Neoliberal health policies, combined with the deregulation of labour laws, amid severe economic crisis are not only working against the idea of social justice, but also are likely to exacerbate two major public health concerns of the country: socio-spatial and socioeconomic inequalities in health and the high homicide rate.” In essence, the burden of cutting public spending was loaded entirely on the backs of Brazil’s poor and working classes.

The effects of defunding Brazil’s public health system are being laid bare by the Covid-19 pandemic. The United Nations Human Rights Commission has stated that, “The effects are now dramatically visible in the current crisis. Government funding cutbacks have violated international human rights standards, including in education, housing, food, water and sanitation, and gender equality.”27

Austerity: Bolsonaro

Bolsonaro campaigned in part on the premise he would champion pro-market reforms and appointed ultra-neoliberal Paulo Guedes as his Finance Minister. Guedes was key to ensuring Bolsonaro had the support of Brazilian and international capital in the run-up to the 2018 election, and was heralded in the international business press as the man who would implement the most ambitious reform agenda in the country’s history.

Since Bolsonaro came to power, the cuts to public spending and social services initiated by the Temer government have, indeed, continued. In many areas, the Bolsonaro government has fused the neoliberal agenda demanded by the financial markets with the cultural agenda of the extreme right. As shown in other chapters, government agencies tasked with promoting human rights, protecting the environment, and representing women, Indigenous and Black Brazilians have been systematically gutted or dismantled altogether.

The effects of this blending of neoliberalism with social conservativism can perhaps most clearly be seen in the education sector. In 2019, there was a concerted effort by the government to cut public education budgets. This included a 30 per cent budget cut to federal universities, justified in part by citing “internal anarchy” and claims of widespread drug use on campuses. Bolsonaro and his supporters have made repeated claims about “cultural Marxism” and “gender ideology” being promoted in secondary schools and universities, and have attacked the humanities as politicised and unproductive.28

This fits neatly with the privatisation agenda pursued by the Ministry of Education in collaboration with the private education lobby. As the budgets of the leading federal public universities have been slashed, the Ministry of Education wants to simplify federal accreditation of private colleges which already enroll over 70 per cent of undergraduate students. These are typically the option most available to working-class Brazilians unable to gain acceptance to the free elite public universities, though often at the cost of indebtedness."29

Despite the force of this attack in recent years, Bolsonaro has, on the whole, not been a skillful promoter of his government’s neoliberal agenda. In his first year in office, he failed to build support in Congress for passing significant legislation. Nonetheless, Congress President Rodrigo Maia gathered support for a pension reform bill that was finally passed on October 29, 2019. This reform created a new minimum retirement age of 62 for women and 65 for men, reduced permanent disability pensions by 40 per cent, reduced the value of pensions for everyone outside the richest income brackets, and effectively locked millions of informal workers out of the system by extending the minimum contribution period to 20 years.30

The next major reform being pushed by the government is a constitutional amendment that, if passed, could transform the country’s public sector. The bill will grant the president new powers to remove job protections, get rid of public bodies, and reorganise entire departments. It also allows for government departments to employ private sector contractors and removes constitutional guarantees of benefits for future public sector employees.31 The still-powerful public-sector unions delayed the reforms for some time and, as the government’s popularity declined, negotiations in Congress stalled. However, it has recently passed the committee stage in Brazil’s lower chamber of congress, so unions will need to mobilise quickly and international solidarity is vital.

Covid-19 and austerity

The Covid-19 crisis forced the government to suspend PEC 55 using a special emergency protocol. However, much of the damage to the public health system had already been done. Emergency spending in 2020 amounted to around £82 billion, or 8 per cent of total GDP. Apart from public health costs and stimulus spending, much of this total included the special emergency grant of 600 reals a month for poor, unemployed and informal workers. In total, over the course of 2020, the federal government poured a reported BRL 1 trillion (nearly £150 billion) into the economy, also including aid for companies and bailouts for state and municipal administrations.

The emergency grant was proposed by leftist lawmakers and was initially opposed by Bolsonaro. However, despite his initial opposition, Bolsonaro was largely able to take credit for the grant: the largest cash transfer program in the country’s history. It reached as many as 67 million Brazilians – far more than the famed Bolsa Família programme introduced by the PT - and the effects were enormous. Brazil saw its sharpest reduction in poverty since 2004 and there was increased economic activity in the poorest parts of the country. At its peak, the emergency grant accounted for 97 per cent of the income of the country’s poorest 10 per cent.

However, despite pressure from civil society and legislators from opposition parties pushing the Bolsonaro administration to launch broad, long-term income support for the poor32 , the government instead reduced the grant to 300 reals per month between September and December 2020, and then ended it in January 2021, before restarting it in April of 2021 at even lower levels. At the same time, the cost of living has increased significantly as a result of rising food and utilities prices, leading to rising levels of poverty and hunger 33  and contributing to Bolsonaro’s declining popularity in 2021.

Meanwhile, the government has so far refused to introduce any new taxes on Brazilian corporations or the super-rich, or to act against endemic tax avoidance. Brazil’s tax code is extraordinarily regressive and contains countless loopholes for elites to avoid paying income tax if they own a company under particular investment conditions. 34  

Fights over public spending and austerity within the Bolsonaro government will continue in the build-up to next year’s election, as many erstwhile coalition partners fear the political consequences of new austerity measures. Bolsonaro is currently more dependent than ever on the support of the traditional rent-seeking parties in Brazil’s Congress. Their continued support is all that protects him from impeachment over his handling of Covid-19 and their support comes at a high price, both in resources for their local interests and in key cabinet positions for their representatives. Bolsonaro also has his own political fortunes to worry about and is attempting to increase public spending on social grants to try to win back supporters; however, he faces strong opposition in this endeavour from the centre-right and finance markets.

Labour reforms

In 2017, Congress passed the most extensive set of labour reforms since 1943, altering more than a hundred clauses in existing labour laws. Measures included extending the workday from 8 to 12 hours, abolishing mandatory union dues and increasing flexibility for employers to hire and fire, including the hiring of freelance workers. The bill passed without even a pretence to democratic legitimacy, as the unelected Temer government was historically unpopular and unconcerned about re-election. As a result, the reforms were not discussed with any trade unions or labour councils, but instead drafted directly by lobbyists working for employers’ associations.

Bolsonaro has declared in the past that workers “enjoyed an excess of rights”35  , and has even suggested on occasion that unions should be done away with altogether. His subsequent victory closed off any possibility of the reforms being mitigated, and instead further changes to the way unions are funded and regulated have made the situation considerably worse. 

The reforms effectively transformed Brazil’s system of collective bargaining, giving primacy to direct negotiation between employers and employees over existing labour legislation. Labour courts are now subject to the principle of minimum intervention and will only be tasked with verifying compliance with basic labour rights. José Dari Krein, Professor of Economics at the Federal University of Campinas, described the reform as legally rubber-stamping employer practices that are already widespread and deepening a long-term trend of the increasing precarisation of work. This required dismantling countervailing forces both within the state and the labour movement, as Krein outlines:                             

  • 24 Galvão,A and Marcelino, P, “The Brazilian Union Movement in the Twentieth-First Century”, Latin American Perspectives, Vol 2, March 2020:84-86
  • 25  Aleem, Z, “Brazil just enacted the harshest austerity program in the world”, Vox, December 15, 2016
  • 27 United Nations Human Rights Commission, “COVID-19: Brazil’s irresponsible economic and social policies put millions of lives at risk, UN experts say”, 29 April 2020
  • 28 Redden, E, “In Brazil, a Hostility to Academe,” Inside Higher Ed, May 6, 2019
  • "29Nunes, R, “Jair Bolsonaro Is Weaker Than He Looks”, Jacobin, June 10, 2019
  • 30 Ribeiro G, “Pension Reform” What is it?”, The Brazilian Report, October 22, 2019” 
  • 31 The Brazilian Report, “Dissecting Bolsonaro’s proposal to Reform Public Service, The Brazilian Report, September 8, 2020 
  • 32  
  • 33 Alves, L, “Pandemic puts Brazil back on the world hunger map”, The New Humanitarian, July 19, 2021 
  • 34 Clemente, F and Silvra Lirio, “Tax Evasion in Brazil and the Institutions to Control”, International Journal of Accounting and Financial Reporting 7(1), March 2017
  • 35

In order for the reform to be implemented, there couldn’t be strong public institutions counterbalancing them – this logic, of businesses having the freedom to decide how work is organized. And there couldn't be strong unions. In that sense, the reform was very successful from their point of view. It greatly weakened the trade union movement, and then, following the reform, its capacity for resistance

José Dari Krein, Professor of Economics at the Federal University of Campinas

As this implies, the reforms signified a fundamental break with the 1943 model, in which the government provided direct subsidies to unions through mandatory union dues. Indeed, the harshness and scope of the labour reforms were more extreme than anything passed during the military dictatorship. Critics of the bill have claimed it violated both the Brazilian constitution and the ILO conventions to which Brazil is a signatory. As a result, union dues fell nationwide by 90 per cent, devastating union budgets and limiting the scope for collective action.36  

Walmir Siqueira, a Director of the Teachers’ Union for the State of São Paulo (APEOESP) and a secondary school teacher in the North Zone of São Paulo city, described the impacts of the 2017 labour reform in public education:

  • 36 McKenna, E, “Taxes and tithes: The organizational foundations of bolsonarismo”, International Sociology, Vol: 35 issue: 6, 610-631

We have a landscape in education in which they are outsourcing as much as possible. They’ve outsourced the work of school inspectors, they’ve outsourced the work of cleaning the schools, they outsourced the catering, the school kitchen staff are now outsourced. And the teachers are hired on precarious contracts. It’s no longer done with public service exams, the teachers are hired temporarily.

Walmir Siqueira, a Director of the Teachers’ Union for the State of São Paulo (APEOESP)

Walmir explained to us that it was a victory of APEOESP that these temporary contracts at least last for three years and not a single school year as was originally proposed. However, in other respects, working conditions had deteriorated markedly. For example, he told us that he expected to have 40 to 45 students in his classroom in 2021.

Bolsonaro wishes to go further, however. One of his first presidential decrees prohibited employers from collecting trade union dues through payslips. Now trade unions must post bills to each member’s home, requiring employers to pay dues at a bank every month. Another proposal on the table seeks to establish a dual employment system in which workers can opt for a “green and yellow card” in addition to the traditional employment record book. Under the pretext of job creation, this system would mean workers were subject to direct negotiation with employers, without mediation from trade unions, and would lose such fundamental rights as a Christmas bonus and paid leave. Krein told us that this reform would be a “total disaster”, and would “bury everything that still exists of labour rights.”

Workers' rights and the labour movement

Stripped of the state protections they enjoyed prior to the 2017 reforms and facing a hostile government, Brazil’s labour movement finds itself in a precarious situation. One of Bolsonaro’s first acts as president was to close the Ministry of Labour, which had first been established in 1930. Guedes’ hostile Finance Ministry is now responsible for overseeing pensions, workplace safety, and salary guidelines. Union registration, meanwhile, is now under the jurisdiction of the Justice Ministry.

The 2017 labour reform and the destruction of the Ministry of Labour have led to a fragmentation of shop floor trade union representation, increasing competition for members between federations and unions. Shorn of their main source of funding, the power of trade union federations has been greatly reduced, opening the way towards smaller trade union affiliates and organisations.

Since its key role in re-democratisation, Brazilian unions have not remained confined to narrowly defined labour issues. Instead, they have mobilised across diverse areas, from industrial policy to social policy to key political struggles. While it has played an important role in resistance to the Bolsonaro government, and remains a powerful force, years of recession, political attacks and the effects of the pandemic have left the trade union movement on the backfoot.

In 2017, only 14.4 per cent of the economically active population belonged to a trade union, down 3.2 per cent since 2016. 37  

 The highest union density is found in the public sector, with 27.3 per cent, while the unionisation rate of private sector workers has fallen to 19.2 per cent. Among self-employed workers, it has declined from 11.3 per cent in 2012 to just 8.6 per cent in 2017.38 (With the elimination of the Ministry of Labour, even accessing information on unionisation and workers’ rights has become a difficult task).

According to José Dari Krein, Brazil’s labour movement is in crisis as a result of recent political and economic developments, but not a “terminal crisis”. It remains the most organized force representing working-class Brazilians. It also has a chance of returning its candidate, Lula, to the presidency in 2022, which could begin to reverse some of the defeats suffered in recent years. In the meantime, our interviewees described struggles as being fought from a defensive position. According to Walmir Siqueira, rather than pushing for salary increases as in the past, today APEOESP’s main aim is to “minimally maintain rights previously won”. These include protecting jobs, benefits and minimum working conditions. Junéia Batista of CUT similarly described the response of the trade union movement in terms of a defensive strategy:

  • 37 Galvão, A and Marcelino, P, 2020: 89
  • 38 Ibid.

Of course, we still have strong and combative unions, but at the moment we’re assessing how we are going to continue to defend the [working] class without ever playing the employers’ game.

Junéia Batista of CUT

More broadly, the unions are having internal debates about how to reorganise and innovate under current conditions. Promising developments identified by our interviewees include the development of stronger ties with other social movements and the increased use of online platforms for holding events and reaching new audiences. Since the onset of Covid-19, there have been several new organising drives focused on unionising Brazil’s growing legion of delivery workers. These must brave dangerous roads on motorbikes and bicycles, not to mention the risk of Covid infection, with little or no support from employers.39 This new type of labour organising among precarious and informal workers will be vital to the future of the Brazilian workers’ movement.

  • 39  Sudré, Lu, “Brazil: App delivery workers ask general population for help in national strike” Brasil de Fato, June 29, 2020
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