LABOUR-BRAZIL: Public Employees Jeopardise Fiscal Adjustment

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Aug 10 2001 (IPS) - Public employees in Brazil seeking to recover the lost buying power of their wages are planning to declare an indefinite nationwide strike on Aug 22, and their movement has compounded the difficulties facing the government’s fiscal adjustment plan.

The situation has also caused tension between the branches of government. The president of the Supreme Court, Marco Aurelio de Mello, said the constitution guaranteed public employees the right to maintain the buying power of their salaries eroded by inflation – a position that heartened the labour movement.

The wages of Brazil’s civil servants were frozen in 1995 in the context of the plan that stabilised the local currency. They then remained frozen as part of the government’s attempt to meet fiscal targets agreed with the International Monetary Fund (IMF) in 1998. In the meantime, cumulative inflation in the past six years amounted to 75.48 percent.

President Fernando Henrique Cardoso denied that the constitution obligated his government to grant wage rises to offset the loss of buying power, which he said would be a return to the “indexation” that fuelled inflation in the past.

The government recently agreed to an additional cut in public spending to obtain a 15 billion dollar loan from the IMF.

National Institute of Social Security employees went on strike Wednesday, two weeks ahead of the nationwide strike scheduled by central administration functionaries for Aug 22 after they discovered that next year’s budget provides for no wage hikes for them.

The government’s targets include a surplus in its primary accounts – which exclude interest on the public debt – equivalent to 3.5 percent of GDP.

That target cannot be met if the government grants the wage hike demanded by the trade unions for 500,000 public employees, which would automatically be extended to a slightly larger number of pensioners.

The additional spending would come to 49 billion reais (20.4 billion dollars), an amount that would make the 45.7 billion real (19 billion dollar) surplus sought by the government an impossible goal.

In negotiations with the National Coordination of Federal Entities and Functionaries, which is heading the strike movement, the government agreed to a mere 10 percent salary raise in the 2002 budget.

The trade unionists warned, however, that the government would have to grant an increase for the entire 75.48 percent, or it would face “the toughest” strike in years. The 10 percent offer “does not even provide the grounds for beginning talks,” said Fernando Molinos, one of the movement’s leaders.

Federal employees went on strike for 112 days last year, although relatively few joined in. But this time things will be different, said the trade unionists.

The 38,000 employees of the National Institute of Social Security, meanwhile, have their own specific grievances. The strike declared Wednesday led to the closing of Social Security offices in 17 of Brazil’s 27 states.

The government plans to annul a 47.11 percent wage rise obtained in 1987 in anticipation of an announced plan for restructuring the administrative careers of the institute’s employees. But since the plan never went into effect, the Ministry of Planning and Budget announced that the wage hike would be eliminated on Aug 18.

The strike will continue until the continued payment of the amount in question is guaranteed, said Vladimir Nepomuceno, director of the National Confederation of Social Security Workers.

Since the 1990s, public sector unions have become the main protagonists of labour mobilisations in Brazil, as private sector trade unions have steadily weakened due to the rise in unemployment caused by the increasing liberalisation and globalisation of the economy.

The guaranteed job security enjoyed by civil servants in Brazil, who can only be dismissed in exceptional cases involving corruption or serious criminal offences, makes them more willing to join in strikes.

Central Bank employees, for example, staged protests Wednesday in support of the demand for a 75.48 percent wage rise. Services were cut off for several hours in the nine provincial capitals where the Central Bank has offices.

Police have also been staging mobilisations, which have affected state governments. Police in several states held strikes in May, demanding wage hikes.

The military police, in charge of maintaining law and order in the streets, took part in the strikes, even though their participation was considered illegal by the courts. In two states the armed forces had to be called in to control looting mobs.

The central government announced a series of measures Wednesday to curb the police rebellion. From now on, it will be possible to fire military police who go on strike; union-like associations of military police will be broken up; and the occupation of police barracks and other public buildings will be treated as a crime, said Justice Minister José Gregori.