The labor action, which kicked off 25 miles outside Brasilia in Valparaiso, also demanded a government commitment to an annual raise in the minimum wage and a lowering of taxes on working people. Minister of Labor Ricardo Berzoini said the administration would seek congressional approval for a 10 percent increase in the cutoff level that determines tax rates.

The minimum wage is a vital question for working people in Brazil. About 16 million retirees receive government pensions calculated on the basis of the minimum wage, and the CUT estimates that nearly 42 million workers depend on this sum for their livelihood. The value of this wage has declined sharply since it was instituted in 1940, the CUT reports. Today it stands at one-third its original value, and its purchasing power is less than one-half of what it was in 1980.

Da Silva’s landslide victory in October 2002 reflected widespread discontent among workers, peasants, and layers of the middle-class in Brazil who were devastated by effects of the worldwide economic depression and the attacks on social programs carried out by the previous government, headed by Fernando Enrique Cardoso. A downward spiral of the economy that began in 1998 was marked by ballooning interest rates, a jump in unemployment, and a decline in the value of the currency. The real, the Brazilian currency, lost 35 percent of its value, eating away at the buying power of workers earning the minimum wage or living on a pension.

In addition to a “Zero Hunger” program to raise welfare allotments to $25 per month for 50 million people, the Workers Party has promised to double the minimum wage by the end of its four years as governing party. Halfway through its term in office, the social-democratic administration has so far raised the minimum wage by about 25 percent.

The Brazilian government has tried to balance the expectation of workers and peasants that it will respond to their need for jobs, land, and improved conditions of life and labor, and its commitment to cut spending on social programs in order to meet the demands of imperialist powers made through the International Monetary Fund (IMF) to keep a steady flow of payments on its $206 billion foreign debt. “It’s legitimate that workers make demands during a moment of growth and increasing employment, but it’s my job to make sure the accounts balance,” Brazilian finance minister Antonio Palocci told the Associated Press December 7.

Brasilia has been able to allocate some funding for the Zero Hunger program and the minimum wage because of an upturn this year in the Brazilian economy. Fueled by a rapid rise in agricultural exports, the economy is expected to grow by 5 percent in 2004, after stagnant growth the year before.

“Agriculture is now a $150 billion a year business in Brazil,” the New York Times reported December 12, “accounting for more than 40 percent of the country’s exports.” Brazilian capitalists are now the world’s largest exporters of chicken, beef, orange juice, sugar, coffee, and tobacco. Soybeans are the country’s top export crop, accounting for nearly half the total shipped out. Brazil’s trade surplus is likely to hit a record $30 billion in 2004.

Businesses in Latin America and the Caribbean as a whole had their best year since 1980, a United Nations agency reported December 15. On average the economy of countries in the region expanded 5.5 percent. Although export-driven profits may have soared, workers and peasants received little benefit. Unemployment fell in a number of Latin American countries, for example, but official figures remained above 10 percent in many, including Argentina, Brazil, Colombia, Ecuador, and Venezuela.

At the same time, governments throughout the continent remain bound to imperialist creditors, even if there was a slight loosening of the burden in 2004. The percentage of government debt to gross national product declined from 43 percent to 37 percent. For Brasilia it is projected to fall from 58 percent to 53 percent. By comparison, the European Union’s Growth and Stability Pact sets a standard for member countries to keep the percentage of debt below 3 percent of GDP.  
 
 
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