Between the minimum and the necessary

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By MAHATMA RAMOS*

The emptying of the policy of valuing the minimum wage in the post-2016 period

Since January 1, 2021, the new value of the National Minimum Wage (SM) has been in effect, R$ 1.100,00. Defined by Provisional Measure No. 1.021, published in the Official Gazette of 31/12/2020, the new value corresponds to a correction of 5,26% in the national minimum floor and was based on the estimated variation[I] INPC-IBGE[ii] for the year 2020 (5,22%). Published today the consolidated variation of 5,45% of the INPC-IBGE in 2020, it is concluded that the correction applied by the Bolsonaro government failed, once again, to guarantee any real appreciation of the SM and, worse, imposed a loss of 0,18. XNUMX% in the purchasing power of the national minimum.

It is the third correction of the minimum wage decided and applied by the government of Jair Bolsonaro and the third time that his government disregards the negotiated parameters, agreed on a quadripartite basis and guaranteed by Law 12.382/2011, which implemented the Minimum Wage Valorization Policy (PVSM) , whose initial validity was expected until 2023, with four-year revalidations.

The PVSM was a public policy proposed by a unitary set of six Union Centers[iii], in 2004, and negotiated on a quadripartite basis – federal public power and union representations of employers, workers and retirees and pensioners – within the scope of the now defunct Ministry of Labor, between 2004 and 2007. The PVSM was in force between 2008 and 2019, despite the non-compliance with its legislation during the governments of Michel Temer (MDB), between August 2016 and December 2018, and Bolsonaro, in 2019. Since January 2020, PVSM has been discontinued by the current government without any public debate.

While the legal parameters of the PVSM were respected, between 2007 and 2016, the SM recorded a real appreciation (above inflation variation) of 41,37%, which increased its value from R$ 380,00 to R$ 880,00 . However, since the 2016 political-institutional coup, the PVSM has been the object of permanent attack, both for its non-compliance between 2017-2019 and for its early extinction in 2020.

If the PVSM had been respected and applied in the post-2016 period, the SM today would be equivalent to R$ 1.117,50, instead of the current value (R$ 1.100,00). That is, it would be BRL 17,50 higher each month than the current amount, which in the year would be equivalent to BRL 210,00 (disregarding the 13th month) more in the worker's pocket.

In the 28 months of the Temer government, a period in which the SM was corrected twice, in January 2017 and 2018, the national floor registered a lowering of its purchasing power equivalent to 0,43%, when compared to the variation of the INPC-IBGE . The value of the SM went from BRL 880,00, in December 2016, to BRL 954,00, in December 2018, Temer's last month in the presidency.

In Bolsonaro's first two years at the head of the country, the SM underwent three annual corrections and registered a real appreciation of 1,21%, when compared to the INPC-IBGE, going from R$ 954,00, in December 2018, to R$ $1.100,00, as of January 2021.

In 2019, after Temer did not correct the SM value in December 2018, it was up to Bolsonaro to define the minimum correction percentage. In January 2019 Bolsonaro readjusted the SM by 4,61%. This percentage not only corrected the inflationary losses of 2018, but also guaranteed a real increase of 1,14% at least as of January 2019, when compared to the INPC-IBGE. However, what at first glance seemed like good news for the workers was actually a defeat. This is because, despite this increase that replaced the losses recorded in the Temer period (equivalent to 0,43%), it was lower than the legal parameters guaranteed by Law 13.152/2015, which revalidated the effectiveness of the PVSM until 2019 and provided for a real gain of 1,32% of the MS at the time, equivalent to the variation of the national GDP of two years before (2017)[iv].

Therefore, the real increase of 1,14% of the SM sanctioned by Bolsonaro in January 2019, despite recomposing the losses of the two previous years, meant a breach of the PVSM law. Thus, the readjustment of the SM was effectively 0,61% lower than the legal parameters established by the PVSM and its value, which should have been R$ 999,78, was R$ 998,00.

In January 2020, the Bolsonaro government, once again, did not value the national minimum floor and reinforced the fiscal austerity agenda defended by its team of ministers and by the “market”. Also in the first half of 2019, the Minister of Economy Paulo Guedes will condition any real increase in the SM to the approval of fiscal reforms[v] and Hamilton Mourão, the vice-president, in a meeting at FIESP, reinforced the offensive against SM by criticizing any possibility of readjusting the national floor above inflation and, after qualifying SM as one of the “sacred cows” of the republic, warned that it must be the object of “attacks”. A few months later, in November 2019, Guedes and his team submitted a Proposal for a Constitutional Amendment (PEC) that proposed the creation of a “state of fiscal emergency”, which, among other measures, proposed freezing the SM for two years (until 2021) in cases of “crisis”[vi].This PEC, which has not been voted on until the present moment[vii], would prevent any real increase in the minimum wage.

In this context, in January 2020, the government readjusted the MW by 4,11% based on the INPC-IBGE estimate for the period, raising it from BRL 988,00 to BRL 1.039,00. And, in February, when the definitive INPC-IBGE was released above the forecast, the government implemented a new readjustment of 0,58%, raising the SM to R$ 1.045,00 as of 01/02/2020. This readjustment, which aimed to restore the SM's purchasing power, disregarded the December inflationary residue of 1,22%, which was not applied for the month of January 2020. Thus, the Bolsonaro government, again, produced a small loss in power purchase of SM during the month of January. This time, no longer in breach of the PVSM, already extinct without any public debate, but due to political disengagement with workers and social security beneficiaries, whose income is referenced by the SM.

Returning to the present, to January 2021, the correction that came into effect that year, once again, was based on the already calculated variation of the INPC-IBGE between January and November 2020 and on the estimate of the index for December. The consolidated variation of the INPC has been released today, and since it is higher than that estimated by the Federal Government, the following doubts arise: the Bolsonaro government, in this context of recession caused by the covid-19 health crisis, will implement a full replacement of the SM, complementary to the already announced? And won't this correction again be applied retroactively to January?

After this brief rescue of the evolution of the SM purchasing power in the post-impeachment (2016-2021), it is clear that the abandonment of a valuation policy and the freezing of the SM purchasing power are the new rule.

The austerity primer implemented by Temer (MDB) and Bolsonaro (former PSL and now without a party) against the SM and its valuation policy interrupts a trajectory of recovery of the SM’s purchasing power that started in 1995[viii], in the governments of Fernando Henrique Cardoso (PSDB), and which gained strong momentum with the Policy for the Valorization of the Minimum Wage (PVSM) during the PT governments of Lula and Dilma Rousseff. And it ends a 19-year period of permanent real gains in the national minimum wage (1998-2016).

This anti-popular political agenda of the coalition that supported the impeachment is aimed at the approximately 50 million Brazilians – including INSS beneficiaries, employees, self-employed workers, domestic workers and employers – who, in 2020, had their income referenced by the SM, according to DIEESE[ix].As well as the 32,7 million informal workers, who in the moving quarter ended in October 2020[X], had in the SM an important reference for their remuneration. However, it is worth remembering that the SM is also an important reference for the evolution of the remuneration of those organized professional categories, whose formal salary floors guaranteed in Conventions and Collective Bargaining Agreements have a value slightly higher than the national floor and which, therefore, are normally readjusted pari passu the correction of the national minimum.

In the ninth most unequal country in the world, according to the World Bank[xi], with a labor market historically marked by high rates of high turnover, informality, low-skill jobs and low salaries, it is necessary to be aware that the legal minimum wage, regulated since 1940, was never the minimum level (the lowest ) effectively practiced in our labor market. Neither operated as the minimum necessary to guarantee the subsistence of the worker and his family, as its legal provision[xii] determines. According to DIEESE, the Minimum Salary Necessary, in December 2020, should be equivalent to R$ 5.304,90[xiii], that is, 5,07 times the minimum wage in force at the time (R$ 1.045,00).

Finally, the Minimum Wage Valuation Policy (PVSM) is a concrete national example of the transformative potential of the direct participation of workers and their representations in the formulation and implementation of public policies, in particular, those on the maintenance, recovery and enhancement of levels minimum wages. Therefore, the legal minimum wage in Brazil, which for long periods of history was disrespected and reduced to the subsistence minimum, must be the object of permanent surveillance by workers and their representative organizations, as well as the central agenda of their struggle agendas.

Brazil should not go against the best practices of the global agenda for regulating minimum wage levels, as it has been doing since the 2016 coup. wages are essential instruments for economic development, combating misery and poverty, and reducing gender and racial wage inequalities in both central and peripheral countries, especially in a post-2020 crisis context and devastated by a pandemic that has already reaped more than 2008 thousand lives in Brazil alone.

*Mahatma Ramos is a doctoral candidate in the Graduate Program in Sociology and Anthropology at the Federal University of Rio de Janeiro (PPGSA-UFRJ).

Notes


[I] The estimated INPC-IBGE variation on which the government based its projection was 5,22%, lower than the INPC-IBGE variation actually calculated in December 2020 and released today (12/01/2021), which was 5,45 .XNUMX%.

[ii] National Consumer Price Index of the Brazilian Institute of Geography and Statistics (INPC-IBGE), which measures the variation in prices of a basket of products only for families with incomes between 1 and 5 minimum wages. The groups most sensitive to price changes, as they tend to spend all their income on basic items such as food, medicine, transportation, etc.

[iii] Namely: Central Autonomous Workers (CAT), General Central of Workers of Brazil (CGTB), Single Central of Workers (CUT), General Confederation of Workers (CGT), Trade Union Force (FS) and Trade Union Social Democracy (SDS). In 2006, the Nova Central Sindical de Trabalhadores (NCST) was incorporated into this collective.

[iv] The PVSM correction formula provided for the readjustment of the SM value by the variation of the INPC-IBGE of the previous 12 months, plus, as a real increase, the annual variation of the GDP (Gross Domestic Product) of two years before.

[v]Source: https://economia.uol.com.br/noticias/redacao/2019/05/14/salario-minimo-reforma-da-previdencia-guedes.htm. Accessed on: 04/01/2021.

[vi] Source: https://brasil.elpais.com/brasil/2019/11/06/economia/1573000538_910075.html. Accessed on 04/01/2021.

[vii] Source: https://g1.globo.com/politica/blog/valdo-cruz/post/2020/12/11/equipe-economica-termina-o-ano-frustrada-sem-aprovacao-de-medidas-fiscais-e-ve-incertezas-em-2021.ghtml. Accessed on: 04/01/2021.

[viii]Between 1995 and 2016, the SM accumulated a real valuation (above the INPC-IBGE) of approximately 145%, that is, it increased its purchasing power by 1,5 times.

[ix] Source: Technical Note No. 249, published on 12/2020 and accessed on 11/01/2021. Available in: https://www.dieese.org.br/notatecnica/2021/notaTec249salarioMinimo.html.

[X]This contingent of informal workers represented 38,8% of the 84,3 million people employed in Brazil, according to the IBGE. Source: https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-de-noticias/releases/29781-pnad-continua-taxa-de-desocupacao-e-de-14- 3-and-29-5-underutilization-rate-in-the-quarter-ending-in-October. Accessed on: 04/01/2021.

[xi]Source: https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-de-noticias/releases/29431-sintese-de-indicadores-sociais-em-2019-proporcao-de-pobres-cai-para-24-7-e-extrema-pobreza-se-mantem-em-6-5-da-populacao. Accessed on: 04/01/2021.

[xii] The constitution, enacted on October 5, 1988, defines the minimum wage as that fixed by law, nationally unified, capable of meeting their (the worker's) basic vital needs and those of their family with housing, food, education, health, leisure, clothing, hygiene, transportation and social security, with periodic readjustments that preserve its purchasing power. (Federative Constitution of Brazil, art. 7″ – IV).

[xiii]To calculate the Minimum Wage Necessary, DIEESE considers the constitutional precept that the minimum wage must meet the basic needs of the worker and his family and whose value is unique for the whole country. It uses Decree Law nº 399 as a basis, which establishes that the cost of food for an adult worker cannot be less than the cost of the Basic Food Basket. The family considered for the calculation is composed of 2 adults and 2 children, who, by hypothesis, consume as 1 adult. Using the cost of the largest basket, among the 27 capitals that research the Basic Food Basket and multiplying it by 3, we obtain the food expenditure of a family. (Available in:https://www.dieese.org.br/analisecestabasica/salarioMinimo.html ).

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