LABOUR-BRAZIL: New Union to Defend 18 Million Pensioners

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Jun 16 2000 (IPS) - Retirees from across Brazil set up a new union Friday to defend the interests of the country’s 18 million private sector pensioners.

Around 5,000 retirees met in a congress Thursday and Friday in Playa Grande, near Sao Paulo, to formally launch the National Union of Retirees and Pensioners, elect the organisation’s first board of directors, and discuss the concerns of senior citizens.

The most pressing problem brought up was Brazil’s social security system, whose growing deficit is seen by the government as the biggest hurdle standing in the way of increasing the minimum wage.

Two-thirds of the pensions paid out to the private sector’s 18 million retirees are tied to the minimum wage, which is one of the lowest in the world, 151 reals (84 dollars at the current exchange rate) a month.

The annual adjustment of the minimum wage, decided on every May, is invariably preceded by a political battle, with the government doing its best to resist pressure from many quarters to increase the amount.

Brazil’s pensioners “are scorned, and treated as disposable people,” said Joao Batista Inocentini, the coordinator of the two-day congress, who added that one of the key aims of the new union was “to salvage the dignity” of the elderly.

Several associations and federations already represent retired workers in Brazil. But the creation of a union “will give them more strength to negotiate with the government,” he added.

Other touchy issues are obtaining increases in pensions and health concerns. The oldest among the retirees tend to face the biggest problems affording medication, which often cost more than double the minimum monthly wage that two-thirds of them earn, said Inocentini.

The new organisation’s first task will be a national membership drive. Members will pay monthly dues of just 50 cents of a real (27 cents of a dollar). If the union makes good on its aim of signing up one million members a year, in two years it will be one of the unions with the largest dues-paying membership in Brazil.

Representatives from around 1,000 municipalities — one-fifth of the total — took part in the gathering in Playa Grande, making it a truly national organisation from the start.

The union emerges as a member of ‘Forca Sindical’, Brazil’s second-largest central union. Paulo Pereira da Silva, the head of the central union, said the new organisation would actually represent 17 million workers, because one million of Brazil’s private sector retirees earn large pensions.

The creation of the new union, modelled on Italy’s Union of Italian Retired Workers, resolves the problem of the weak representation of pensioners in Brazil, who up to now have been broken up into the sectorial unions representing their trade, which fail to address the specific interests of retirees, said Pereira da Silva, a Sao Paulo metal- worker.

The first mission of the new union’s leaders will be a meeting next Tuesday in Brasilia, where they will defend, along with social security minister Waldeck Ornellas, a proposal to overhaul the financing of the pension system.

The idea is to replace the payment of wage-based contributions with a tax on consumption, in order to distribute the burden throughout the population, with big spenders contributing more.

But the proposal has not yet defined which products would be the most heavily taxed, nor what the percentage of the tax would be, according to the first president of the new union, Antonio Carlos Domingues da Costa.

The proposal is a bid to keep Brazil’s social insurance scheme from cracking, because the number of contributors is shrinking as unemployment climbs, while the number of retirees is mushrooming with the fast ageing of the population.

Last year, the private sector social security system’s deficit climbed to 9.7 billion reals (5.4 billion dollars) — nearly twice the 1998 total.

Although that is equivalent to just one-fourth of the deficit of the public sector, where civil servants continue to draw the same salaries even after retirement, the government has targeted the private sector deficit, which it wants to reduce in order to help balance its accounts.

So although there is no outlook for increased incomes for Brazil’s millions of elderly workers without any modification of the current system, private sector pensioners will enjoy a better bargaining position in their new union.