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      Structural Unemployment in Brazil in the Neoliberal Era



            The Brazilian economy is historically characterized by an unequal economic and social structure. Over the years, given this economic and social structure, the Brazilian economy developed without solving its main problems. This has created barriers to both stable economic growth and improvements in the living conditions of the population. Even though the industrial sector between 1930 and 1970 increased its investment, growth and output rates, reinforcing its structure and proportion in the gross domestic product, unemployment and income inequality have remained as structural characteristics of the Brazilian economy. The crisis in the 1980s and the neoliberal policies in the 1990s strengthened these problems, especially through the increase in the unemployment rate and in the informal sector, and with the deregulation of the labor laws. The Brazilian government only started to pay attention to those problems from the Lula government onwards, implementing public policies to promote improvements in the labor market. However, high unemployment rates, low wages and income inequality still remain as structural problems in the Brazilian economy. Based on these aspects, the article will analyze structural unemployment in Brazil over the last ten years, pointing out and trying to understand the problems and trends. The discussion developed by Karl Marx in Capital concerning the relative surplus population and the reserve army will be the theoretical approach on which that analysis will be based.


            Author and article information

            World Review of Political Economy
            Pluto Journals
            Summer 2013
            : 4
            : 2
            : 192-217
            Copyright 2013 World Association for Political Economy

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            Political economics
            labor policies,neoliberalism,relative surplus population,structural unemployment


            1. Labor productivity expresses the relative volume of means of production that a worker, during a given labor time and with the same intensity of labor, transforms in a product.

            2. Assuming that every worker is part of the relative surplus population during the time that is partially or entirely unoccupied, Marx presents three ways in which the relative surplus population can express itself. The first form—the floating form —aggregates the set of workers who are attracted to and repelled by the modern industry, and therefore, are permanently available to the capital. The second form—the latent form —is composed of all persons who, working in the fields, are about to move to the urban or manufacturing proletariat as a result of internalization of the capitalist mode of production in agriculture. The third form—the stagnant form —is part of the active army of workers, but with completely irregular occupation. In addition to these three forms, Marx also considers pauperism , which is the sediment of overpopulation on that, leaving aside the lumpenproletariat itself, is composed for people able to work, the orphans and destitute children—who are candidates for industrial reserve army—and the degraded, ragged and unfit for work (Marx 1974).

            3. The debate concerning the deteriorating terms of trade was developed by Raul Prebisch, within the structuralist theoretical framework of the Economic Commission for Latin America and the Caribbean (ECLAC). The Marxist theory of dependency, developed by Ruy Mauro Marini and Theot$nio dos Santos, was also dedicated to that topic, especially from the connections established between core-periphery trade and income transfer resulting from this process, which hatched forms of workforce superexploitation in peripheral capitalism. For a more detailed discussion about the deteriorating terms of trade, income transfers and workforce superexploitation, see Bielschowsky (2000), Marini (2000) and Santos (2000).

            4. According to Dedecca (2005), it is possible to find three components that explain the choice of a migration policy rather than a political mobilization of the available workforce in the North and Northeast to meet the demand for manpower in São Paulo. The first component points out that the difficulty of mobilizing the population is in the interests of landowners in the formation of the National State, since the mobilization of the population to São Paulo could accelerate the decline of landlordism in the Northeast. The second component states that the São Paulo coffee growers saw that mobilization as a way for the landowners of the Northeast to transfer to São Paulo the depreciation of capital, since the slave labor force could be considered as a type of capital. Finally, the third component associates the encouragement of immigration as a way to oppose the formation of a labor market for the black population in the Southeast.

            5. Another aspect that must be considered is the model of regulation of the labor market, which was consolidated in Brazil in the 1940s. At that time, an extensive regulation of labor relations was established, with the imposition of the minimum wage, the social protection system and the Consolidation of Labor Laws (CLT). Apparently beneficial to the working class, this model of regulation favored the repression and political manipulation by Getúlio Vargas' government, especially because the political model of regulation occurred with a reproduction of a labor market with low social protection—at the end of the industrialization period 1930–80, half of the employed population had no access to the social protection system. These elements ensured the reproduction of a poorly institutionalized labor market, marked by the presence of employment contracts established informally.

            6. Analysis of the conditions of work comprises the period from 2003 to 2008. That period was chosen because it goes from the beginning of Lula's first term until the financial crisis, which brought a number of specific features with significant impacts on the economy. At the end of the section, some considerations are made about the effects of the crisis of 2008. The data analyzed is given in the Annexe.

            7. The participation rate is defined as the ratio of the economically active population (employed and unemployed) and population of active age, and can be taken as an indicator of labor supply in the economy. The occupancy rate is defined by the ratio between the employed and economically active population, which reflects the demand for labor in the economy.


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