A legitimate strike

Image: Jan van der Wolf
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By BRUNO RESCK*

The strike by a large segment of the PT's support base serves as a warning sign and an opportunity to change course and save its government

1.

There is a permanent dispute for the appropriation of socially produced wealth. There is also a fierce dispute over the appropriation of the public budget that we all finance through paying taxes. Several segments are presenting themselves to win their share in this dispute. Therefore, the role of the State should be to arbitrate this dispute and define the best allocation of resources to promote the development of productive forces and the well-being of the population.

The public service elite (judicial, legislative and military) and big capital (agrarian, financial and commercial) use their influence to maintain and expand their privileges. Those who can do more cry less. Why are some claims more legitimate than others?

Let's see. The Federal budget executed in 2023 was R$4,36 trillion. Of this amount, 43,23% (R$ 1,89 trillion!) was paid to maintain the public debt. To be more didactic, for every R$100 we pay in taxes, R$43 goes to public debt. Who are the holders of Brazil's public debt? Financial institutions, investment funds and external investors keep approximately 58% of this pie. To make things even more educational, the financial market took approximately R$900 billion of our taxes in 2023. Health accounted for 3,69% and education 2,97% of government spending in 2023.

In addition to draining taxes to the top of the pyramid, this class of rentiers exerts pressure on the Central Bank (independent?) to maintain stratospheric interest rates, feeding back into a cycle that generates abundant wealth without going through production and job creation, which the economist Ladislau Dowbor calls it “The Era of Unproductive Capital”. The Brazilian State is an income transfer machine from the bottom of the pyramid to the top, to the top 0,1%.

Well, this same financial market is the one that puts the knife around the government's neck to cut spending through fiscal austerity policies. All the efforts of the current Minister of Finance, Fernando Haddad, are to produce zero deficit (or surplus) and guarantee the payment of the debt, in addition to expanding the accumulation fronts through concessions and privatizations. It is important to highlight that the calculation basis for spending cuts is the “Primary Revenue” which takes into account all government spending, except interest payments. Therefore, there are no limits on spending on financial expenses.

Recently, the government released a small revision in the fiscal surplus values ​​for the year 2025. Since then, the corporate press representing the financial market has been attacking the government day in and day out. In practice, big financial capital uses its power and influence through the media to guarantee its demands. What are rentiers doing? Defending your interests, right? Why can't servers? What instrument of pressure do employees have other than stopping activities?

2.

Since the beginning of April, at least 52 Universities and 79 Federal Institutes have launched a strike. The agenda seeks to restore the institutions' budget, restore civil servants' salaries, restructure careers and revoke measures approved since the Temer government. The budgets of the Federal Institutes of Education have suffered deep cuts since 2016. A great allocative effort is needed to rebuild the budget of the Federal Institutes of Education which, even with an investment of R$5,96 billion in 2023, we are still at a level close to the 2016. The salaries of administrative education technicians (TAEs) and teachers have been frozen for six years, in addition to profound distortions in the career plan. The government granted a 9% linear adjustment in 2023 in an important gesture, however, insufficient to compensate for salary losses estimated at 47% since the Michel Temer government.

 The proposed adjustment for education employees for the year 2024 is 0%, 9,0% for 2025 and 3,5% for 2026. An adjustment far below the 24,2% granted to Federal Policy and the Highway Police Federal. Governing is about making choices, and the current government chose to “cook” its support base by offering zero adjustments in 2024. The current government chose a draconian fiscal adjustment policy.

Lula's election represented hope in rebuilding the country in the face of the tragedy of the governments of Michel Temer and Jair Bolsonaro. On the other hand, Lula 3 committed to a neoliberal policy of fiscal tightening materialized by the Fiscal Framework. There is harsh criticism (including from the left) of the wall movement, as, supposedly, the strike will contribute to weakening the government in the face of the advance and cohesion of the extreme right.

Nevertheless, the strike by a large segment of the Workers' Party's support base serves as a warning sign and an opportunity to change course and save their government. It is not possible to serve two masters at the same time. It will not be possible to rebuild the country, at the same time, carry out fiscal austerity policies that only interest the financial sector. How to adapt the 100 new units of the Federal Institutes with their demands for investment, funding and personnel within the Fiscal Framework? How to maintain the constitutional education and health floors within the Fiscal Framework?

There is no alternative. Either the government ends the constitutional floors, or it ends the Fiscal Framework. One of the bases of the neoliberal discourse is the precariousness of public services and the election of civil servants as villains. There is no possibility of building a welfare state without stable and well-paid civil servants.

Government representatives who are talking to unions say that the 2024 budget is closed. No to the bottomless bag of interest payments! The budget is closed for its support base. The art of governing is mediating conflicts and establishing allocative priorities. It seems that federal education, science and technology are not on the list of priorities at the moment.

*Bruno Resck, geographer, is a professor at the Federal Institute of Minas Gerais (IFMG) – Advanced Campus Ponte Nova.


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