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Trade unions protest against the dance of the unemployed

By Luca Bonicini in Rio de Janeiro, ICFTU ONLINE..., 029/990209/LB, 9 February 1999

Brussels/Rio de Janeiro, February 9 1999 (ICFTU OnLine): Learn to dance the dance of the unemployed, for tomorrow you may dance. Gabriel O Pensador, a popular Brazilian samba-rapper hit the right note with his single the dance of the unemployed last year.

The Portuguese verb for dance has two meanings. It also means to get the sack. 1999 may well go down in memory as a year of mass unemployment in Brazil. And it could well be a year of trade union action as well.

The dancing has already begun. Not only in the samba schools where they are rehearsing for the carnival parades, but also in the factories where the attitude of some employers suggest that many workers may dance.

The car industry has already begun. Volvo has just given 800 workers two weeks collective leave and General Motors has imposed 15 days compulsory leave on 850 workers at its São José dos Campos assembly plant. Dismissals could well follow.

The macro-economic data is overwhelming. According to the Inter-Union Department of Statistics and Socio-Economic Studies (DIEESE), reputed for its reliability, the São Paulo region recorded a 3.2 per cent drop in incomes in 1998 as compared to the previous 12 months. (-9.9 per cent in trade and - 4.1 per cent in industry). Unemployment in Brazil’s industrial capital rose from 16 to 18.3 per cent of the working age population over the same period.

The IBGE (Brazilian Institute of Geography and Statistics) which is the official barometer of the country’s economic situation, forecasts a 5 per cent drop in growth and a rise in unemployment of 7.59 per cent in 1998 and 10 per cent in 1999, unprecedentedly high for Brazil. A fall in income and a rise in unemployment translates into greater inequality in the land of the samba. According to Lloyds Bank economist Odair Abate, the crisis will further accentuate the already alarming gulf between rich and poor.

Faced with this apocalyptic outlook, the unions have begun to mobilise. The CUT (United Workers’ Centre) and the Força Sindical have already reached a major agreement with the principal car manufacturers in the São Paulo region. The agreement - approved in principle by the local government of São Paulo and the central government - foresees the reduction of the industrial production tax (IPI) on cars. In exchange for this fiscal incentive, the employers guarantee jobs and a reduction in the price of cars to the pre-devaluation levels. According to the trade unions’ calculations - they made the proposal - the 1.2 million sales forecast for 1999 should rise to 1.7 million thanks to the agreement, compensating for the government’s loss in tax revenue. The negotiation of the agreement illustrates both the leading role played by the unions and a positive attitude on the part of the government which was open to negotiations with the unions and called on the employers to show social responsibility.

At the same time, workers’ in the factories concerned are making a show of solidarity and silent resistance. The São Bernardo Ford factory (Sao Paulo) has set up a fund for the 2,800 workers dismissed in December, and reinstated on February 2 by the management in return for a reduction in wages. The workers contributed the equivalent of 10 hours’ pay to the fund. Their example has been followed by workers in other factories who showed their solidarity by making their own contributions, while the US trade union centre the AFL-CIO made a donation of 5,000 dollars, a much sought-after currency at the moment.

The response so far however is still tiny compared to the enormity of the situation. But while the unions’ action may be a far cry as yet from the workers’ struggles of the '70s, it is bound to intensify.

The principal opposition party, the Workers’ Party (PT), an ally of the CUT, has also gone on the offensive, announcing a meeting to define a mobilisation strategy. A national day of struggle is to be called after the carnival. People must come out onto the streets to protest at the government’s economic policies, which do not give priority to job creation and growth says the PT.

The CUT has accused the Brazilian government of hiding the severity of the crisis from the people. In a press release issued in response to the appointment on February 2 of a close ally of international speculator George Soros as president of Brazil’s Central Bank, the national trade union centre stated that the government was not only allowing international speculation to dictate economic policy but also those responsible for implementing it. Arminio Fraga, former adviser on Latin America to George Soros, replaced Francisco Lopes as President of the Central Bank after the latter had held the post for just 10 days.

In appointing Mr. Arminio Fraga says the CUT’s press release the government is sending out a clear message: no more intermediaries, we are putting the fox in charge of the hen house.

The CUT also noted that this abrupt replacement gives a good idea of the government's lack of political direction in dealing with this crisis.