Is it true that, on average, job creation was similar during the governments of Fernando Henrique and Lula and Dilma?
In fact, the governments of President Lula and President Dilma were responsible for the creation of nearly 20 million formal jobs in 11 years, while the FHC government created just over 5 million jobs over eight years. When the opposition party, PSDB, governed Brazil, the average was 630,000 jobs created per year. Already during the PT administrations, that number was almost three times higher, reaching an average of about 1.8 million formal jobs created per year.
President Lula and President Dilma decided that Brazil needed to grow and distribute income at the same time - and not grow first and then divide. Thus, the living conditions of workers improved both in good times as well as during times of difficulty in global and Brazilian markets. Further, in 2008 and 2009 Brazil faced the worst crisis of the international economy since the Crash of 1929, and managed to keep a positive economic course for the country. Over the years the federal governments of the PT, the formal jobs exceeded informal jobs - arriving at the ratio of 57% to 43% in 2012. And unemployment reached the range of 5.5% in 2012, compared with more than 12 % in 2003.
With the new minimum wage stipulated by President Dilma in 2014 (R $ 724.00), the minimum wage had real gains of over 70% since 2003 - according to Dieese, the actual increase is 72.35% between 2003 and 2014. That is, in addition to restoring the minimum wage against inflation, the governments of President Lula and President Dilma are creating conditions so that in a few years the minimum wage will double in real terms. To give an idea, when Lula took office in 2003, the minimum was R$ 200.
In fact, the formula established by President Lula and signed into law by President Dilma works with two variables. It compensates for inflation in the previous year, and adds to the minimum wage the rate of GDP growth in the previous two years - GDP, or gross domestic product, the sum of all wealth produced by the country. The formula will be applied until 2023, with the expectation of bringing the minimum wage closer levels considered sufficient by the workers’ rights organizations.
Policies to increase the minimum wage, formal job creation and improving of the Social Security, among other issues, have created ripple effects on the Brazilian economy. For example, in 2013, 84.5% of wage negotiations in more than 300 categories resulted in increases greater than inflation, according to an analysis of the Salaries Dieese (Inter-Union Department of Statistics and Socioeconomic Studies) tracking system. Wage gains represented an increase of R$ 12 billion in workers' pockets. And the new minimum of R$ 724.00 injected the significant figure of US $ 28.4 billion into the economy in 2014.
The benefits are coming to all of Brazil. The sum of employment and wage policies of President Lula's and President Dilma’s government helped lift more than 40 million Brazilians into the middle class - which thus became the majority of the population. The effects were felt throughout the country, in various segments. In rural areas, for example, the middle class doubled between 2002 and 2012, from 21% to 42%. In the Northeast, went from 22% to nearly double to 42% as well. Moreover, out of 100 people who have joined the middle class in the period, no less than 75 were black. And finally, there are 48 million Brazilians who have income referenced to the minimum wage, and therefore benefit from these valuation policies: 21.4 million beneficiaries of Social Security, 14.3 million employed persons, 8 million autonomous and 4.2 million domestic workers.
The total number of formal workers in Brazil increased from 28.6 million in 2002 to 47.4 million in 2012. With this, the collection of Social Security went from R $ 151 billion in 2002 to almost US $ 300 billion in 2012. For local governments, the increase in the minimum wage and the creation of formal jobs have brought more resources to the local economy, making it more dynamic and less dependent on only the benefits of people who have retired.
From 2003 to 2010, 155,000 new civil service workers were hired under the administrations of President Lula and President Dilma – three times the amount hired in the eight years of the PSDB government. More teachers, more doctors and more federal police officers were hired. In education alone, 29,226 new workers were hired between 2003 and 2010, of which 14,833 were teachers. These jobs represented a 50% increase in the workforce in public education during the period. In Health, the More Doctors program allowed the hiring of 6,658 new professionals in the area in 2013. The overall number is already around 14 thousand. In the area of security, an increase of 1,889 Federal Highway Police and 3,631 new hires were made by the Federal Police between 2003 and 2009.
A study by IPEA (Institute of Applied Economic Research) shows that the costs of active and inactive personnel of the three levels of government have remained at stable levels in relation to GDP (Gross Domestic Product) in recent years in Brazil. In addition, the IPEA study shows that Brazil has 5.52 servers per thousand inhabitants. Germany has 6.10 servers per thousand inhabitants; Mexico has 8.46; the US, 9.82 and South Korea 11.75 per thousand. That is, the recent and current contracts are of great importance for the country to have more qualified professionals to service the population, and are shown to be of similar or lower levels of many other countries – both for poorer and richer countries than Brazil - and are being made without affecting the fiscal balance of the country.