Brazil's National Congress is discussing a proposal sent by President Jair Bolsonaro to put an end to the "minimum wage valuation policy" which currently forces to increase the worker's income above the percentage of inflation increase.
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If his proposal is approved, the minimum wage will only be increased in the same proportion as inflation, that is, nominal increases in wages will not generate a real income increase.
“Bolsonaro's decision throws away a policy which not only raised workers and retirees' income levels. It also played a central role in boosting the country's economy since 2004, when President Luiz Inacio Lula da Silva began to adjust wages above inflation,” local media Brasil de Fato commented.
Once Bolsonaro's proposal is fully implemented in 2020, Brazilian workers' consumption will decrease by the equivalent of 1.1 percent of the 2018 GDP.
“Promoting development through the enhancement of domestic markets is a strategic issue. Without the stimulus of the wage valuation policy, the economy will be more dependent on abroad,” the Perseu Foundation economist Marcio Pochmann said.
About 15 years ago, Brazilian trade union centers began to held marches to support the minimum wage valorization police.
"Let's make this video come to Bolsonaro. Teacher was fired for collecting late wages. The Bahia governor is doing a bad administration."
"The first march took place in 2004 and we walked 40 kilometers... We managed to increase the salary from 260 to 300 reais, which placed the salary eight points above inflation," the Workers' Unitary Central (CUT) former president Arthur Henrique da Silva said.
According to Pochmann, the wage valuation policy also corrected social inequalities generated at the time of the dictatorship. For in democratic periods the value of the minimum wage was recovered.
"In democracy, as the minimum wage real value grew, the share of the workers' income in the national income also was enhanced."
"The minimum wage is a central element in the conflict between labor and capital, especially in the struggle for the appropriation of the economic surplus," he added.
In Brazil, during the 13 years of the Workers' Party (PT) governments, the minimum wage increased from 200 to 880 reais, which meant that the minimum income increased 340 percent in nominal terms and 77 percent in real terms.