Fernando Alcoforado*
Brazil’s workers are faced with the impossibility of the economic system and the future Bolsonaro government to generate the necessary jobs for the economically active population and eliminate the precariousness of the work imposed by the neoliberal economic model in force since 1990. How to make the Brazilian economic system and the future government to generate the necessary jobs for the economically active population and how to eliminate the precariousness of the work imposed by the neoliberal economic model? The answer to these two questions is presented in the paragraphs below.
Brazil has an economically active population of 90.6 million of which 36.3%, or 32.9 million of the private sector workers have work contracts, with a formal contract and 44% or 40 million workers are in an informal situation, that is, they do not enjoy labor rights. Unemployment is 12.7 million workers and the economically active underutilized population is 27.6 million workers. This means that the number of discouraged workers who have stopped seeking work is 14.9 million workers. These figures show that the situation of the working class in Brazil is very serious. 44% of the economically active population is self-employed in the provision of services. This situation was exacerbated by the economic crisis that broke out in Brazil since 2014 and caused the Brazilian economy to face the biggest recession in the history of Brazil.
In order to overcome the current recessive crisis, which is the main cause of unemployment and underutilization of Brazilian workers, the future government should immediately implement a broad program of public infrastructure works (energy, transportation, housing, basic sanitation, etc.) to raise levels employment and income of the population and, as a consequence, to promote the expansion of household consumption resulting from the increase in the wage bill and the income of companies with investments in public works. The federal government should attract the private sector to invest in energy, transportation and communications infrastructure that requires resources of R$ 1.6 trillion to reduce the cost of its logistics. The increase in the wage bill and the adoption of a credit policy will encourage the consumer to buy more. The public works program would increase productive capacity and increase investment in industry, contribute to raise commercial activity and services, as well as to raise the levels of government tax collection.
In addition to the public works program, the Brazilian government needs to take urgent measures to combat economic stagnation, which would contemplate the following: 1) promote a broad export program, especially agribusiness and the mineral sector; 2) drastically reduce bank interest rates to encourage household consumption and investment by companies; and (3) to reduce the tax burden by freezing public sector high salaries, cutting off of stewardship and of organs of public administration, and the reduction of interest payments and the amortization of public debt to be renegotiated with public debt creditors. To keep inflation under its control, the Brazilian government should encourage the domestic production of goods and services and when it is insufficient to carry out imports to combat demand inflation.
In addition to the measures described above, the future Bolsonaro government should simultaneously solve the problem of the deficit of the public accounts that would contemplate, on the one hand, the increase of the public collection with: 1) taxation of large fortunes with assets over 1 billion reais that could yield approximately 100 billion reais per year; and (2) an increase in the tax on banks whose profits have been stratospheric and, on the other, to reduce government spending by: 1) drastically reducing the number of ministries and public agencies and expenditures at all levels of government; and (2) a drastic reduction of the basic interest rate of the economy (Selic) to reduce the size of public debt and the burden of paying interest and amortizing public debt. The Bolsonaro government proposes to drastically reduce the number of ministries and public agencies and expenditures at all levels of government, but will hardly tax large fortunes and increase the tax on banks because its Minister of Economy, Paulo Guedes , is committed to the rich and to the banks.
The leaders of the future government need to understand that in an exceptional situation like the current one there is the imperative necessity of planning the national development to resume the development of the Country. The Brazilian government should elaborate an economic plan that contributes to the resumption of the development of Brazil presenting for the population and for the productive sectors a perspective of overcoming the current crisis and resumption of economic growth. It is the lack of a development plan one of the factors that leads to the immobility of the private sector in the realization of investments in Brazil leading to a true paralysis. The development plan should guide and coordinate the country’s companies that, organized in networks, and aided by trade, technology and credit policies, can compete successfully in the national and global economy.
Taking into account the speech of the future Minister of Economy of the government Jair Bolsonaro, Paulo Guedes, who is a fundamentalist of neoliberalism, the federal government will not take an active role as inducer of economic growth, drawing up a development plan with the adoption of the measures presented above to promote the reactivation of the economy and raise employment levels in Brazil. According to the Bolsonaro government program, the starting point for combating unemployment is to tackle the country’s fiscal imbalance. According to Bolsonaro, the stimulus for investment, growth and employment generation will come from the reversal of the public deficit, achieved through spending cuts, reduction of tax breaks and sale of public assets. These measures are insufficient to reactivate the Brazilian economy.
Regarding the precariousness of labor relations in Brazil and in the world, it is important to note that it resulted from the neoliberal policies adopted that led to a reduction in the supply of employment and loss of labor benefits. The forms of precariousness of labor relations are manifold, such as the fact that most of the workers do not have a contract of employment, there is open and veiled unemployment, there is an extension of working hours, there is an intensification of the conditions of work, there is the outsourcing of work and there is fragmentation of the working class and the consequent difficulties of organization. As a result, neoliberal policies have weakened trade unionism, that is, the organization of workers in the struggle for their interests and rights. The establishment of neoliberalism in the world occurred with the purpose of promoting the exponential increase in the appropriation of the economic surplus by the great capital at the expense of the workers.
The economic crisis that broke out in Brazil in 2014 brought to the workers the weight of the biggest recession in history that has caused companies to adopt, as a first step, to dispense workers. In the years of growth that preceded the crisis, profits have multiplied and at the time of recession, companies do not even use a share of retained earnings to maintain employment. On the contrary, they immediately dismiss thousands of workers, as if the right to employment is not a fundamental right for the vast majority of the population, who live on their labor. Neoliberal policies also produced a major process of proletarianization of broad middle-class sectors, impoverished by the loss of formal employment and the concentration of income resulting from the policies implemented by the various governments in Brazil.
The Michel Temer government contributes to the neo-liberal labor reforms in force and the future Jair Bolsonaro government will contribute to the reforms that will come to precarious labor relations in Brazil. . The president-elect, Jair Bolsonaro, who voted in favor of the labor reform that ended 100 items of CLT-Consolidation of Labor Laws, says that it is better to have precarious employment than to have nothing. His proposal to combat the unemployment drama calls for the creation of a “green and yellow” labor portfolio with less labor rights. This proposal foresees that every young person entering the labor market may choose between an employment relationship based on the traditional blue work permit, which guarantees all labor rights, or opt for the green and yellow work portfolio, and with this , to lose a series of labor rights..
In Brazil today, there is therefore no prospect of a solution to unemployment and precarious work during the Jair Bolsonaro administration because the federal government will not take an active role as an inducer of economic growth to promote the reactivation of the economy and the elevation of levels of employment in Brazil, besides acting in the reduction of workers’ current rights. The workers and their organizations have no other action than to try to stop neoliberal labor reforms through their representatives in Parliament and the Judiciary, strengthen trade union organization and, in the future, fight to change the correlation of forces in Parliament and elect a President of the Republic committed to the interests of the workers.
* Fernando Alcoforado, 78, holder of the CONFEA / CREA System Medal of Merit, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is the author of 14 books addressing issues such as Globalization and Development, Brazilian Economy, Global Warming and Climate Change, The Factors that Condition Economic and Social Development, Energy in the world and The Great Scientific, Economic, and Social Revolutions that Changed the World.
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