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May Day Holiday Looking Grim For Brazilian Unionists

May 1, 1990

RIO DE JANEIRO, Brazil (AP) _ An economic austerity program decreed six weeks ago has brought massive layoffs, and today’s May Day holiday is no cause for celebration among Brazilian unionists.

″The economic situation has us with our backs against the wall,″ said Gilmar Carneiro, a union leader in Sao Paulo, the nation’s largest city.

The austerity plan was announced by President Fernando Collor de Mello on March 16, one day after he took office. It included spending cuts, the sale of state companies, and firing of government workers. It also froze $115 billion in savings accounts and money market deposits for 18 months.

The measures, which Collor said were necessary to combat annual inflation of nearly 5,000 percent, have drastically cut the cost of living. But the economy appears headed for a steep recession.

An estimated 300,000 workers already have been fired nationwide and about 700,000 more were put on collective holiday. On Friday, 1,470 metalworkers were laid off by three Sao Paulo firms.

After giving workers a pay increase in March of 73 percent - 10 percent less than the month’s inflation - the government froze wages in April. Labor and independent groups estimate inflation was at least 24 percent in April.

The Inter-Union Department of Statistics and Socio-Economic Studies, a respected labor research group, said this month’s minimum wage will be worth only $50, its lowest level since being created in 1940.

Many Brazilians support Collor’s efforts against inflation, but unions say workers are paying too high a price.

Despite their opposition, no major strikes have been declared since March 16, and labor leaders say workers are so fearful of losing their jobs that unions are unable to act.

″Before, if paychecks were even a day late, there were strikers at factory gates,″ Carlos Aparicio Clemente, secretary-general of the Metalworkers Union in Osasco, Sao Paulo, told the major newsweekly Isto E. ″Important conquests by workers are being lost overnight.″

″(Strikes) now would be stupidity. Our priority is the maintenance of jobs,″ said Jair Meneguelli, president of the leftist Workers Central Union, the country’s largest labor federation representing 12 million workers.

Unions, which represent about a third of Brazil’s 65 million-strong workforce, are even having a hard time preventing workers from accepting salary cuts, as some businesses have demanded.

″We are against making concessions to the bosses,″ said Carneiro. ″When companies are making profits they never want to share the gains.″

But about 30 salary reduction pacts already have been signed in the past month, compared with a total of only five such deals during the country’s last recession between 1981 and 1983.

Many union leaders say companies are using the economic turmoil as a smokescreen.

″The mentality is to take advantage of short-term difficulties,″ said Luis Antonio Medeiros, president of the Sao Paulo Metalworkers Union.

But business leaders say wage cuts are the only way to prevent wider layoffs, as sales and revenues have plunged.

″Our sector is not going to return to the same level of production of before March 16,″ said Domicio dos Santos Junior, of the National Sindicate of Automobile Manufacturers. ″Reducing the work week and salaries is an attempt to minimize the effects of unemployment.″

Last Friday, the Sindicate proposed 130,000 industry metalworkers accept a temporary 30 percent cut in hours - and thus salary. The average industry wage is currently $500 monthly.

Meanwhile, union leaders fear darker days are ahead. A survey of 755 firms conducted by the Federation of Industries of Sao Paulo State, revealed 14.3 percent intend to fire workers over the next months.

Carneiro estimated up to 250,000 bank workers, about 30 percent of the industry total, may be laid off if the economy doesn’t pick up speed soon.

″If the situation worsens there may be strikes, but right now we don’t have the forces,″ he said.