Brazil’s recovery of production-line manufacturing wages recedes since 2006. Yet, there are plans for a strong long-term equalisation

The future of Brazil’s wage policy is being redefined by clearly establishing a commitment to not only recover its 1996 wage level but to equalise wages with equivalent wages in the U.S. This shows strong affinity with TLWNSI’s concept –of the gradual closing of wage gaps through annual real wage increments (increments of several points over inflation)– for a system of annual real minimum wage increases has already been implemented beginning in 2010 and until 2023.

Although Brazil’s plan will hardly close the wage gap with the United States by 2023, it will undoubtedly embody a great improvement that will trigger different multiplying effects that will generate the endogenous development of Brazil. This will place it far much closer to the socioeconomic indicators of developed countries than of developing ones. Last year we were confident that once the benefits to be obtained from Brazil’s minimum wage appreciation policy were attested, the new government of Dilma Rousseff would maintain the same policy. But sooner than expected, Rousseff’s government and Brazil’s Congress have already transformed into law the appreciation plan and seem committed to it despite the fact that the opposite policy, of wage depredation, is being pursued globally and with special emphasis in the European Union.

To be sure, there is no guarantee that the current minimum wage appreciation policy will be maintained by future Brazilian governments. In any case, the responsibility for making sure that this policy remains falls directly on society, which bears the full load for making Brazil’s future governments feel compelled to consolidate this objective. Hence, it is indispensable that Brazilians become fully aware about the need to permanently get involved in the public matter to make sure that future governments work for the benefit of society and not for the owners of the market and their very private interests, as the vast majority of governments enthusiastically pursue in most countries today.

Download the pdf file with the analysis of Brazil's wage gap here.