How has neoliberalism affected how workers protest, and what new forms of working-class contestation have emerged as a consequence of neo-liberal policies? These questions, relevant throughout Latin America, are even more significant in the case of the Brazilian labor movement, which was one of the strongest in the region and had reached the apex of its capacity to mobilize workers at the beginning of the 1990s. Unlike its counterparts in other Latin-American countries, moreover, the Brazilian labor movement in the 1980s represented a clear rupture with traditional clientelistic labor politics. Together with the progressive clergy of the Catholic Church and leftist intellectuals, it created a new labor party that would become a point of reference in Latin-American politics. Before the 1990s, the Brazilian labor movement represented a new force in national politics through its incomparable capacity to mobilize workers in the workplace and to press for economic and political reforms.

As early as 1978, backed by progressive Catholic clergy, left-wing labor leaders embarked on the task of systematically challenging military rule through strikes that gathered momentum each year among the working-class and other broad sectors of civil society. By 1984, this new antipopulist labor movement, called the “New Unionism,” was at the core of massive demonstrations throughout Brazil demanding an end to the military dictatorship and direct presidential elections.

After redemocratization in 1985, the New Unionism continued to strengthen its capacity to mobilize workers, as evidenced by several thousand strikes and four nationwide general strikes.Footnote ¹ At the same time, the New Unionism, organized under the banner of the National Workers' Confederation (Central Única dos Trabalhadores [CUT]) was an instrumental player in the formation of the Workers' Party (Partido dos Trabalhadores [PT]), a new progressive and nonpopulist political party. Today, the CUT still has an impressive presence in union and national politics as the strongest labor confederation, affiliating over fifty percent of Brazil's labor unions, including the largest and economically most significant ones.

Since 1994, with monetary stabilization and the government's introduction of neoliberal policies, there has been a significant decline in union-led strikes. The decline in union mobilization resulted not only from the effects of economic recession as a consequence of neoliberal reforms and the opening of the economy to foreign competition, as most authors have pointed out; but, just as importantly, from the erosion of the rank-and-file support structure within the CUT, as well as that organization's inability to adapt to the socioeconomic changes resulting from monetary stabilization, neoliberalism, and globalization.

In the first part of this article I examine how the conditions for mobilization were undermined for key segments of unionized workers—metal workers, bank workers, and civil servants—that were the mainstay of militancy within the labor movement. The weakening of these segments' mobilization capacity, I argue, was a consequence of monetary stabilization under the Plano Real and the opening to foreign investment that accompanied it. Stabilization permitted a new expansion of the economy and these unionized segments confronted new challenges as a result of the increased foreign investment that entered Brazil with the end of hyperinflation and subsequent economic restructuring.

Even though labor unions failed to mobilize workers to confront deteriorating employment and working conditions under neoliberalism, not all workers were passive when confronted with unemployment and layoffs. Some managed to organize those working in the informal sector to stage confrontations with authorities, storeowners, and other workers. This alternative arena of worker mobilization has marked the urban political landscape in recent years. The major political parties that controlled city governments invariably pressured the national government for solutions to the growing unemployment as a consequence.

The second part of this article examines three cases of alternative working-class contestation that have arisen due to the impact of the neoliberalization of the Brazilian economy and institutionalized resources for severance payments. The first case is that of the Landless Workers' Movement (Movimento dos Trabalhadores Sem Terra [MST]), which underwent significant growth in the 1990s through the recruitment of the urban unemployed and by offering them an alternative to the apparent decline in union combativeness. A second case is that of street vendors, in which I examine a new category of salespersons who sell expensive and often illegally obtained industrial goods in contrast to traditional street vendors that sell small, homemade trinkets and foods. This new type of vendor was one byproduct of neoliberalism, as industrial workers were dismissed and invested their severance benefits in manufactured goods that would attract middle-class consumers. Attempts by city authorities to repress these vendors resulted in widespread conflict and the emergence of union-like organizations to defend the right to work the streets. Finally, I analyze a similar case of the independent passenger-van owners, workers that also lost their jobs in this period, and, like the new street vendors, invested their severance payments, but in this case purchasing passenger vans and using them to compete against urban bus companies. The conflicts that ensued due to repression by municipal authorities represented yet another form of alternative working-class contention resulting from neoliberalism.

Since then, the Partido dos Trabalhadores (PT) lead by Luis Inacio Lula da Silva and the New Unionism have been among the major forces for institutional reforms, the broadening of democratic rule, and the improvement of social welfare. The new unionism leadership forged the CUT, the first national organization bringing together labor unions of all branches of the economy. Although the CUT has faced factionalism over the last two decades due to internal ideological cleavages and the formation of Força Sindical,Footnote ² a dissident confederation, the CUT today remains clearly identified as the progressive and militant labor confederation.

For this reason, the rise of alternative forms of labor contestation is, to a large extent, a consequence of the political and strategic contradictions facing the labor movement and the CUT, as a result of monetary stabilization and neoliberalism. I argue that monetary stabilization rather than neoliberalism or globalization undermined the labor movement and the CUT's capacity to mobilize rank-and-file workers against the negative effects of neoliberalism and globalization.

A second important function of the informal sector is that of providing a large range of alternative forms of income-earning opportunities for working-class families to complement low formal-sector wages through family-based ventures in producing, packaging, and selling merchandise and services directly to consumers. This allows for working-class family members of various ages to engage in part-time work activities, providing other sources of income for the family unit, as well as an alternative workplace as a precaution against the possibility of job loss in the formal sector during periods of economic uncertainty.

The article broadens the discussion of working-class mobilization beyond union-led actions by illustrating the emerging mobilization of unemployed workers as they defended work and livelihood in the informal sector or through actions seeking agrarian reform. We argue that the decline of labor unions' combativeness due to globalization, neoliberalism, and the diversification of work practices among the unemployed makes it necessary to go beyond the literature that has until now focused only on workers in the formal sector and the new unionism of the 1980s.Footnote ³

The Demobilization of the Brazilian Labor Movement in the 1990s

The Brazilian labor relations system was established by Getulio Vargas, during the Estado Novo dictatorship (1937–1945), under the auspices of the Compendium of Labor Laws (Consolidação das Leis do Trabalho (CLT)). The CLT created a corporatist structure of conflict resolution between the bourgeoisie and the working class with the explicit aim of providing the state with the power to maintain control over the labor movement. Thus, prior to the end of military rule in 1985, the Brazilian state exercised considerable control over labor relations and the internal affairs of labor unions. Because of state intervention into union affairs, labor leaders were largely dependent on political parties and politicians to secure their positions in the labor movement and to persuade the rank-and-file of their political efficacy. Union affairs were generally characterized by populist, clientelistic relations and working-class contestation was often limited to political arrangements between union leaders and political authorities.

Military governments after the 1964 coup marginalized the participation of union leaders in politics, reduced the opportunities of labor leader cooptation, and dealt with the labor movement through authoritarian methods instead of pursuing populist strategies of control and cooptation characteristic of civilian governments in previous decades. During the two decades of military rule, a new breed of union leaders emerged in some major unions with nonpartisan labor experiences, as rank-and-file workers and Catholic community groups organized away from the workplace surveillance of pro-government union cronies and management. These years of political activism in working-class communities resulted in the formation of a new generation of labor leaders that during the 1970s gradually took back the unions from government intervention and laid the groundwork for the emergence a more combative union movement that challenged the military regime.

In late 1970s, under the leadership of Luis Inacio Lula da Silva, president of the metalworkers' union of São Bernardo do Campo in São Paulo, strikes broke out in the industrial belt of metropolitan São Paulo. Workplace demands were quickly transformed into protests against military rule, catapulting these progressive unions into the forefront of the national movement to end the twenty-year dictatorship, and forcing mainstream opposition politicians to include a new popular actor in political negotiations for the transition to democratic rule.

Since then, Lula and the New Unionism have been among the major forces for institutional reforms, the broadening of democratic rule, and the improvement of social welfare. The new unionism leadership created the CUT, the first national organization bringing together labor unions of all branches of the economy. Although the CUT has faced factionalism over the last two decades due to internal ideological cleavages and the formation of Forca Sindical, a dissident conservative confederation, the CUT remains clearly identified as the progressive and combative labor confederation.

For this reason, the rise of alternative forms of labor contestation is to a large extent a consequence of the political and strategic contradictions that the labor movement and the CUT faced as a result of monetary stabilization and the opening to foreign capital during the 1990s. Monetary stabilization undermined the capacity of the CUT and the labor movement generally to mobilize rank-and-file workers against the negative effects of neoliberalism and globalization.

By the end of the 1980s, the Brazilian labor movement had attained a record level of mobilization capacity as seen in the number of strikes in that period as well as the four general strikes that the CUT led. Strike strength was ten times greater than at the beginning of the decade when the New Unionism first emerged. On the institutional front, the CUT had consolidated the movement under a national organization that united eighty-nine percent of government employees' unions, fifty-one percent of unions in domestically-owned firms, and fifty-six percent of unions in transnational corporations.Footnote ⁴

Thus by the early 1990s, labor's presence in the political arena was formidable as was its corresponding political party, the Workers' Party (PT). As Graph 1 illustrates, strike activity in 1990 reflected the tendencies of the previous decade, when the labor movement reached a high level of organizational maturity. In 1990, organized labor led 1952 strikes, with an average of 4654 strikers per event.Footnote ⁵ During the decade that followed, however, labor's trajectory was in fact the inverse of the 1980s. In focusing on strike performance as a quantitative measure of labor's capacity to mobilize workers, the 1990s can be divided into three phases representing different political and economic conjunctures and patterns of labor mobilization.

1.

Labor strikes and average number of strikers, Brazil, 1990–1999.

As illustrated in Graph 1, Phase I encompasses the years 1990 to 1993, when labor was struggling against the effects of hyperinflation. Considering that these years were marked by severe economic instability, as the country rapidly slipped into a hyperinflation spiral, labor's response was direct. Union mobilization against the erosion of wages due to the twenty-five to thirty percent monthly inflation rate produced strikes with characteristic dimensions. There was a significant decrease in the number of strike actions from 1952 in 1990 to 732 in 1993, with a slight increase between 1993 and 1994. However, although strikes decreased significantly, the average number of strikers per event increased to record heights. By 1993, the average number of strikers was 7,095 workers per strike. As hyperinflation drained the lifeblood from the people, workers joined strikes in increasing numbers to protest and defend their interests. Even though one can see in this phase a fluctuation in the average number of strikers, it is important to note that in spite of this fluctuation, strikes showed increases in participants.Footnote ⁶

The second phase, between 1994 and 1996, represents the years immediately following the monetary stabilization program. The Plano Real of July 1994 was an unorthodox economic program to halt spiraling inflation. Economic stabilization was a fundamental factor in undermining labor's mobilization capacity in this phase. Strike activity, in terms of number of strikes, increased slightly over the previous period, but the average number of strikers declined at a rapid rate, reaching its lowest level since the late 1970s. Strike actions were focused mainly in specific firms, while large sector-wide mobilizations ceased. The second phase can best be understood in relation to Phase 1 and Phase 3. Overall, Phase 2 reflected the difficulties that the CUT-led labor movement had in dealing with socioeconomic changes created by economic stabilization.

The data for Phase 3 clearly depicts strike activity in a period of economic recession due to the monetary policies of the Fernando Henrique Cardoso administration. Strike levels declined and the average number of strikers had a small increase over the period between 1994 and 1996. The decline occurred, in part, because of the effects of the recession on workers' disposition to challenge employers in a period of growing unemployment; but the decline in labor union mobilization also resulted from the erosion of the CUT's rank-and-file bases and the organization's inability to respond to the consequences of stabilization, neoliberalism, and the opening of the Brazilian economy to the forces of globalization.

The Changing Profile of Strike Demands

Strikers in the first phase made proactive demands, focusing overwhelmingly on wage increases to combat the galloping inflation that marked those years. After monetary stabilization in 1994, strike demands underwent very important changes, clearly differentiating the subsequent Phases 2 and 3. As Graph 2 shows, between 1994 and 1997 (Phase 2) proactive strike demands began a gradual decline as defensive demands increased. Coupled with a decline in strike actions, the shift from proactive to defensive demands marks Phase 2 as a transition period from a period when hyperinflation dominated labor's demands to a period of economic stability in which employers, in adjusting to the effects of low inflation, turned against workers to lower costs, maintain higher profit margins, and prepare themselves for the impact of globalization.

2.

Percentage of proactive and defensive strike demands Brazil, 1994–1999.

This is best exemplified by strikers' specific demands.Footnote ⁷ In Phase 2, wage demands decrease almost forty percent, while demands for employers' compliance with contracts rose from eighteen to forty-four percent. During this time, demands over job security remained at ten percent.

In Phase 3 the profile of strike demands changed the most. Beginning with 1997, as strike actions and worker participation plummeted, strike demands reflected the new socioeconomic conditions of recessive neoliberal policies. From 1997 on, defensive demands overwhelmingly dominated, while proactive demands become progressively less important.

A closer look at specific strike demands, depicted in Graph 3, shows that higher wage demands played a less important role, falling to twenty-five percent in 1998 and twenty-eight percent in 1999. On the other hand, reactive demands like those for contract compliance and job security became predominant during strikes. Contract compliance demands accounted, on average, for fifty percent of the demands in all strikes at this time. Even more interesting is the fact that job security demands doubled from fifteen percent in 1997 to almost thirty percent in 1999. In other words, of all the strikes conducted in the period, thirty percent of them made demands about job security and fifty percent also made demands related to compliance with contracts or legal provisions. The shift from proactive demands to defensive ones further demonstrates the effects that the new economic scene had on the working class.

3.

Wage, contract compliance, and job security strike demands (percentages), Brazil, 1994–1999.

As expected, the profile of strike demands changed from being proactive to more defensive as mobilization declined in the face of worsening economic conditions. Not only did stabilization reduce inflation, but it also created the conditions for fundamental changes in basic structures of the economy.

While strike scholarship has clearly established the now commonplace fact that recession tends to reduce the predisposition of workers to strike, it is not entirely clear that it explains the pronounced decline of labor militancy in the Brazilian case. During the decade of the 1980s, under conditions of spiraling inflation and periodic recession, unions were far less restrained and were more predisposed to mobilize against employers and the government. Why then in the 1990s, with a highly organized union movement under the CUT, was labor less efficacious in its capacity to mobilize against the effects of neoliberalism and globalization? A partial explanation is offered by the recession, but to fully understand labor's demobilization, we must focus on how economic stability and restructuring weakened the CUT's union bases and its capacity to respond to new economic challenges.

Although the Plano Real halted hyperinflation, the Brazilian economy was already showing signs of major structural changes from the beginning of the decade, changes which would eventually undermine the social basis of the New Unionism. Certainly, the impact of an economy in recession, as in the years 1997–1999, would partially account for the radical decline in strike activity. But this decline began early in the 1990s, following a successful decade of labor militancy and organizing. This article argues that economic changes in Brazil that began with the Plano Real in 1994 contributed significantly to the weakening of the CUT rank-and-file base and provoked serious dilemmas for union leaders regarding how to formulate systematic and cogent responses to the negative effects of stabilization and neoliberalism.

Looking at strike behavior in the 1980s, the dataFootnote ⁸ show that a few sectors stand out as the pillars of labor militancy: metalworkers, especially automotive and steelworkers; bank workers; and government employees like civil servants, schoolteachers and healthcare workers. Examining the evolution of employment between 1989 and 1999, one finds that of these sectors that had been the mainstay of CUT militancy, only government workers did not suffer significant losses in employment in the 1990s. As the data in Graph 4 indicates, automotive workers and other metalworkers, as well as bank workers, faced significant declines in job opportunities as compared to the overall rates in industrial employment and employment in the service sector.

4.

Evolution of employment in select economic sectors Brazil, 1989–1999 (base 1989 = 100).

Crisis in the Metal Workers Unions of Metropolitan Areas

Automotive workers in the ABC region of metropolitan Sao Paulo were the cradle of the New Unionism in the late 1970s and a cornerstone of the CUT. Throughout the 1980s, metalworkers demonstrated determination and combativeness by participating in the major mobilizations of the decade and providing the CUT with the core leadership that consolidated the national labor movement. Yet by 1990, employment opportunities in the sector declined. In Phase 1, employment declined less severely from an index of ninety-five to seventy-eight. After 1994, though, work in the sector continued to decline throughout Phase 2. In the period between 1997–1999, employment of automotive workers had reached a historic low, losing about half of the jobs in the sector that had existed in 1990.

Without a doubt, job loss in the sector can be attributed to technological changes in production brought about by renewed foreign investment, as well as the effects of the growing recession imposed by the Cardoso government in order to guarantee currency stability and his reelection. But metalworkers' unions faced other challenges as well.

With the Plano Real's monetary stabilization and opening of the economy, foreign capital again flowed to Brazil, but sought to diversify industrial investment geographically, with an eye to lowering laboring costs. Many automotive and metalworking companies, for example, chose lower wage sites with weaker union traditions outside the traditional industrial cities of the São Paulo ABC, Belo Horizonte, or Rio de Janeiro metropolitan areas to build new industrial plants and assembly units.

Consequently, cities that had been the traditional stronghold of the New Unionism faced growing unemployment not only because of technological changes and recession, but also due to these investments in other regions of the country. As authorities from less industrialized cities and states used direct fiscal incentives to attract the new industrial investments, the older industrial centers began to suffer gradual processes of industrial aging and deindustrialization. This was the case of the automotive and metalworking centers located in the metropolitan areas of São Paulo and Belo Horizonte.

A study of the evolution of industrial employment between large and small citiesFootnote ⁹ points out the shift in both the number of jobs going from the larger cities to the smaller ones and a shift in gross wages that accompanied these changes. Graph 5 shows that in 1970, large cities accounted for 70 percent of jobs. By 1998, small cities had succeeded in attracting 52.6 percent of jobs and large cities were left with only 47.4 percent.

5.

Evolution of industrial employment between large and small cities Brazil, 1970–1998.

Between 1991 and 1998, for example, industrial São Paulo lost 474 metalworking firms that relocated either to the interior of the state or to other states, representing a loss of over 25,000 jobs. In 1993, the metallurgical industries employed 32.6 percent of the labor force in the city, by 1996 this had declined to only 21 percent. The motivation was clear: While average wages in São Paulo were around $1200 Reais, in the interior, average wages in the metallurgical industry were approximately $840 Reais.Footnote ¹⁰

The decline of industrial employment in large cities also reflected the shift in wages from the capital cities to the interior (Graph 6). In 1970, large cities accounted for 82.9 percent of the wages paid in the industrial sector and the small cities for only 17.1 percent. By 1998, there had been a noticeable change: Large cities now accounted for 64.3 percent and small cities increased their share to 35.7 percent, having doubled their share of wages.

6.

Participation in bulk of wages between large and small cities Brazil, 1970–1998.

The migration of both preexisting and new industries to other regions away from the traditional industrial areas of Brazil not only created immediate problems of unemployment, deskilling, and the weakening of local unions, the CUT was also confronted with competing union interests. Mainstay unions in the traditional industrial regions faced capital flight, while in the “new” industrial parks elsewhere, with their weaker and less experienced unions and workers anxious for new job opportunities, local unions became strong lobbies for local government incentives to attract new industrial investments away from the industrially concentrated Sao Paulo-Belo Horizonte-Rio de Janeiro triangle. This placed the CUT in a delicate position between its traditional union bases and the emerging industrial unions in the smaller interior cities. This dilemma meant that the CUT was unable to formulate a coherent and cogent stance with regard to these competing interests.

The flight of industrial capital from the large metropolitan areas to the secondary cities dealt a serious blow to the capacity of core metalworkers' unions to respond to the multiple forces that stabilization and neoliberalism had brought upon the working class. Facing a shrinking job market and deindustrialization in the traditional areas of union support, the metalworkers' unions were confronted with another challenge: the privatization of the steel industry. Steelworkers were another base of union militancy in the 1980s.

Beginning with Fernando Collor's presidency, Brazilian elites were committed to privatizing the extensive government-owned industries and banks. Debates within the CUT over privatization brought to a head the political dilemma faced by progressive unionists with regard to the situation of state-owned enterprises: On the one hand, these enterprises were economically deficient due to excessive political patronage, mismanagement, featherbedding practices, and a lack of market competitiveness; on the other hand, they represented a strategic sector in the national economy and secure jobs for large numbers of workers. As the debates developed within the CUT against privatization, it became clear that its leadership and political supporters, although positioned against privatization, were unprepared to offer viable alternatives to the sale of these firms. On the other hand, local union leaders and steelworkers largely favored privatization as the only form of correcting these distortions and ultimately curtailing political patronage. At the auctions of steel mills, local labor leaders and workers confronted CUT and student activists on the streets protesting in favor of or against privatization. In the aftermath of these confrontations, some local unions voted to leave the CUT, becoming independent unions instead of joining the more conservative labor confederation, Força Sindical. Between 1991 and 1997, ten Brazilian steel complexes were privatized in this manner.

The loss of the steelworkers from the CUT was another blow contributing to the weakening of the metallurgical union base within the New Unionism. Together with the problems of deindustrialization facing the metalworkers unions in metropolitan areas, this severely limited this historical stronghold of labor militancy.

The Crisis of Bank Workers' Unions

Like the metalworkers, bank workers also faced changes that sapped the capacity of the union leadership to mobilize: massive layoffs resulting from monetary stabilization. For bank workers, the impact of monetary stabilization was direct. Hyperinflation had made it necessary for banks to provide guaranteed rapid banking transactions, given the high daily devaluation rates due to twenty-percent daily inflation. Because of this, all banks, up until the 1994 Plano Real, maintained a large contingency reserve of workers as tellers and in processing functions to guarantee speedy transactions. For similar reasons, banks quickly adopted computerized operations that made transactions more rapid, at the same time that customer services remained highly labor intensive. Graph 4 shows that for the period between 1990 and 1994 (Phase 1), employment in the banking sector tended to decline from an index of almost 100 in 1990 to 77 in 1994. Certainly, the bulk of jobs lost in this period resulted from the growing computerization of the banking system. As depicted in Graph 7, before 1994, banks had already established their bases for computerized banking and doubled the number of ATMs installed as well as increasing automated transactions. As financial institutions automated their systems, bank employment dropped correspondingly. Under a stabilized economy, bank automation climbed, as indicated in the number of transactions carried on via automation by expanding the ATM system and creating online home and office banking services. This, as Graph 7 illustrates, occurred between 1994 and 1996, marking a threshold in the restructuring of the banking labor market with the further elimination of jobs.

7.

Bank employment and automatic banking trends Brazil, 1990–1999.

The drastic decline in bank employment during the 1990s, meant that employment in 1999 was only sixty percent of what it had been in 1990. Needless to say, the massive dismissal of employees over the decade severely weakened unions' capacity to mobilize workers. Unions had been slow to realize that the computerization of the banking system during the hyperinflation years would accelerate automation once economic stability was achieved. By the time these effects of stabilization were recognized by the union leadership, banks had already laid the groundwork for one of the most sophisticated banking systems in the world, with a far smaller labor force.

In addition, unions were also confronted with the dilemmas posed by the privatization of state-owned banks, which, like their counterparts in the steel mills, were plagued with political patronage, corruption, featherbedding, and deficit spending. Since state-bank employees had been the backbone of labor militancy among the rank-and-file, bank workers' unions were hard pressed to maintain their influence on employees as public banks were sold to private interests and traditional labor relations in these banks changed drastically. Through the 1990s, over ninety percent of state-owned banks were privatized, which meant the loss of the state-owned banks as the base for bank workers' union activism. Unlike the metalworkers, state bank employees, in conjunction with their union leaders, strongly resisted privatization, but to no avail.

A fourth factor which impacted the mobilization capacity of bank workers' unions was the financial crises which hit a number of large national banks after the end of hyperinflation. The failure of these important private financial institutions in conjunction with the entry into the Brazilian market of foreign banking interests further fueled the tendency toward greater concentration in ownership of the banking system as new foreign banks purchased both publicly and privately owned banks. The concentration of the industry in the hands of transnational banks strengthened bank employers in relation to the more vulnerable workers, often leaving union leaders in disarray and without cogent counterproposals.

Confronted with this array of critical developments, the labor unions were unable to formulate coherent political strategies to defend the interests of their workers either with regard to job security or the effects of high-tech innovation. As a consequence, bank worker leaders, though continuing to have a major role in national and regional union politics, were less successful in mobilizing their sector, facing defeat at the hands of both government authorities and employers.

The Case of Government Workers

Of the occupational groups with the highest propensity to strike in the 1980s, government employees had in the 1980s the highest strike rates among workers. In 1988 and 1989, civil servants accounted for a little less than half of all strikes in terms of man-hours lost,Footnote ¹¹ workers mobilized and strike frequency; government employees far outpaced private sector workers in strike activities by almost fifteen times.Footnote ¹²

In national union politics, moreover, civil-service unions acquired a more influential position within the CUT than their numbers warranted, occupying national and regional directorships often disproportionately to their numbers. In 1995, of the twenty-five members of the national board of the CUT, eighteen were representatives of public-sector unions and seven from the private sector; and on several state boards, government union representatives held an important proportion of seats.Footnote ¹³ Within government employee unionism, some occupational groups stood out in their militancy and influence in union politics: schoolteachers, healthcare workers, and employees in public enterprises (bank workers, steelworkers, and petroleum workers).

Public-service workers were not immune to the effects of the post-Plano Real currency stabilization. Bank and steel workers were severely curtailed in their mobilization capacity due to the impact of privatization. Furthermore, civil servants were hit very hard by the fiscal crisis of the state. As stabilization brought a deepening of the consequences of deficit spending, authorities were forced to limit expenditures, especially for wage increases. Since 1994, neither the federal, state nor municipal governments were able to give wage increases. Even though this caused considerable discontent among government employees, frequently available evidence of the fiscal crisis made civil servants less predisposed to make proactive demands. In an absolute inversion of the high strike rates of the 1980s, during the 1990s civil servants were conspicuously absent from the strike rolls. Predominant demands among government workers' strikes were actions protesting the failure of either state or municipal governments to pay their salaries or against the deterioration of working conditions, especially in education and health. Only a few privileged sectors, like the subway workers union of São Paulo, struck for better wages.

A third factor contributing to demobilization among public service workers was the effects of decentralization of some government services like public health, primary education, and social services. Among the main points on the political agenda of the Cardoso presidency was the municipalization of these three services, obliging local authorities to assume more of the direct administration of these services, education, and public health. Social service unions were not prepared to handle the effects of this shift in the locus of decision making to local authorities and were faced with the difficult task of restructuring for action on the local level. Both the logic of organization and recruitment and the strategies of mobilization were clearly distinct depending on whether the struggle was against a single state or federal authority or a multiplicity of local authorities. In the 1980s, public service workers unions had been less successful in organizing and mobilizing municipal workers as compared to state and federal employees.Footnote ¹⁴

Finally, government employee unions faced growing public disfavor, including among private sector workers, who regarded civil servants as a privileged category of workers. In 1995, a survey in São Paulo indicated that 66.4 percent of those interviewed felt that they were either very much or partially hurt by public employee strikes. At the same time, 84.3 percent felt that employees of state enterprises were privileged workers. Even though 63.7 percent of those interviewed felt that the real objective of civil servant strikes was politically motivated, 79.3 percent of the interviewees felt that government employees in essential services had the right to strike over economic issues but, at the same time, 56.3 percent were against political strikes.Footnote ¹⁵ Confronted with a lack of public support, government employee unions organized protests in this period without any significant support from rank-and-file private sector workers either, even though civil service unions occupied a significant position in the upper echelons of the CUT.

Alternative Forms of Working-Class Contestation

If unions failed to respond to the impact of neoliberal policies on urban workers in part due to the erosion of their mobilization base, other segments of the working-class population did not hesitate to collectively defend their right to work. Alternative forms of working-class contestation emerged in the late 1990s, filling a void left by the contraction of union mobilization. Among the alternative forms of contestation that appeared on the national political scene and mobilized workers in confrontational actions that successfully challenged government authorities, three are worth noting: the Landless Workers' Movement (Movimento Sem Terra, MST) in the countryside; and two urban movements: the street vendors' movement (Movimento de Camelôs), and the illegal van drivers' movement (Movimento dos Perureiros).

The emergence of these forms of contestation in lieu of the traditional labor movement reflected the demobilization of unions as workers turned to other forms of organizing in their struggle for survival against the economic adversities brought about by the new phase of capitalist development under neoliberalism and globalization.

The Landless Workers' Movement (MST)

Today, the MST represents the most articulated and extensive social movement in Brazil and probably in Latin America. Although the MST had its origins in the last years of the military dictatorship in the 1970s, it took on new vigor with the consolidation of neoliberal restructuring of the urban economy and the decline of urban union mobilization. As unemployment increased in the cities, some workers with rural backgrounds were attracted to the agrarian reform movement with the prospects of obtaining their own small plots of farmland. The MST offered working-class and agrarian families the opportunity to obtain reasonable economic security in agrarian settlements by using the direct-action tactics of occupying unproductive estates and distributing the lands to families that the movement organized for the land seizure. This approach made the MST the most influential social movement on the political scene during the 1990s. This is vividly depicted by the data on MST protests shown in Graph 8 for the 1990–1993 period (Phase 1). The data indicates, both in the number of land occupations and number of families participating in these occupations, that the MST began to gain momentum towards the end of the hyperinflation period in 1992–1993. The effects of economic instability on workers encouraged families with rural backgrounds to return to the countryside by joining the agrarian reform movement. Even in the critical year of 1992 when President Fernando Collor was impeached, unlike the labor movement, the MST maintained an increased pace of mobilization.

8.

MST Occupations and families participating, 1990–1999.

One detects a rise in contestation in 1993, but during 1994 and 1995, when the economy was finally stabilized under the Plano Real, MST protests declined, though there was an important increase in the number of families joining these occupations. While the level of mobilization in these two years remains lower than that reached in 1993, 1994 and 1995 represented a transition between the years of hyperinflation and the beginning of the recession after the Plano Real. In part, the decline of MST actions was due to the immediate positive effects that the end of hyperinflation had on workers' prospects for a better life in the cities.

Beginning in 1996, a year prior to the first recessive measures of the federal government, the MST regained the momentum of 1993 with a significant increase in land occupations and a corresponding increase in family participants. As Graph 8 shows, 1996 marked a watershed in agrarian contestation. From this year on, the MST progressively augmented its mobilization strength, as evidenced in the steadily increasing levels of occupations and family participation. As the negative effects of stabilization on the urban and rural working classes made themselves more evident, larger numbers of workers turned to the agrarian reform movement not only as a reaction against increasing unemployment and falling wages; but, also as a protest against the declining quality of life in the slums and working-class neighborhoods of industrial cities.

Yet the MST's confrontational politics were not without negative consequences. During the 1990s, MST land takeovers met with repression from landowners, local police, and occasionally from the federal police. Under the Collor government, the MST suffered its highest levels of imprisonment of leaders, indicated in the data in Graph 9, when arrests were disproportionate to the lower number of land occupations during that administration (1990–1992). After the impeachment of Fernando Collor, under the interim Itamar Franco presidency (1994–1995) arrests of MST leaders declined significantly and remained at the lowest level until the end of the first term of Fernando Henrique Cardoso. During his second term, the number of arrests of MST activists again reached levels reminiscent of the Collor years. When compared to the greatly increased number of occupations conducted by the MST from 1997 to 1999, the situation during the Cardoso administration was much less repressive than under Collor. Overall, however, the data on land occupations, family participation, and arrests conveys a clear picture of increasing levels of MST militancy.

9.

MST Occupations and arrest, 1990–99.

Because of the recession that began in 1997, resulting from the implementation of neoliberal policies, the MST increased its mobilization through a national campaign for agrarian reform and became the predominant expression of working-class discontent visible to the public in the cities. The MST inaugurated the tactic of mass marches from agrarian settlements to urban centers such as Brasília and state capitals at first as a strategy of taking rural protests against injustices from the countryside to an urban constituency and as a way of championing urban workers by attacking neoliberal economics. Thus, throughout the 1990s, it was the MST that organized the only successful mass urban demonstrations against neoliberal policies and globalization.

In 1997, this included national marches to Brasília, the first of which gathered more than 40,000 landless protestors from across the country and served to catalyze public support in the cities. As the 40,000 MST militants paraded down the main avenue of the national capital in the direction of the Plaza of the Three Branches of Government (Praça dos Três Poderes), thousands of spectators lined the streets with baskets of foodstuffs for the hungry demonstrators, waving Brazilian flags and banners in enthusiastic support of the agrarian movement and against the Cardoso administration. Popular support was evidenced in a national poll conducted at that time which indicated that as many as eighty percent of those interviewed favored the MST goal of agrarian reform.Footnote ¹⁶

After the first march on Brasilia, the MST subsequently sponsored periodic mass demonstrations in Brasilia and other cities calling for agrarian reform and inciting urban workers to react against recessive government policies. Skillfully avoiding any criticism of the labor movement's paralysis, the MST played a key role in directing rural and urban workers' mobilization against neoliberal policies and globalization.

These marches expanded the MST mobilization repertoire, as landless workers walking to capital cities recruited new demonstrators along the way; and once in the cities, many unions joined the marches, enhancing this snowball effect. In this manner, the MST combined mobilization tactics used in the countryside with mass demonstration tactics more familiar to urban workers as an effective resource that allied rural and urban workers around agrarian reform and against neoliberalism.

By 1999, it was evident that the MST had become a political force to be reckoned with. In that year, the MST conducted 489 land occupations with the participation of 71,581 families. In addition to these actions, the MST joined forces with the CUT, the Catholic Church, and opposition leftist political parties (Partido dos Trabalhadores, Partido Socialista Brasileiro, Partido Democrático Trabalhista, Partido Comunista and Partido Comunista do Brasil) in organizing a national demonstration in Brasilia against unemployment and other forms of economic and social exclusion resulting from the Cardoso government's policies. The March of 100,000 (Marcha dos 100 Mil) occurred on August 26, 1999, with approximately 130,000 protesters in Brasilia. CUT sources estimated that some 73,000 demonstrators were bused into the national capital from around the country. State organizers in São Paulo, Minas Gerais, Rio de Janeiro, Goias, and the Federal District together sent 1,468 buses. In many cities, buses were provided by local municipal authorities as their contribution to the protest against the government's recessive policies.Footnote ¹⁷

After the success of the August demonstration, the CUT attempted to recreate the protest event in November of the same year by calling for a national work stoppage against unemployment: The Day of National Work Stoppages and Protest in Defense of Work (Dia Nacional de Paralização e Protesto em Defesa do Emprego). Compared to the August action, the CUT event was by all accounts ineffective (if not a failure) in mobilizing a significant number of workers to strike. Even though the CUT programmed activities in each state for the national stoppage, the very low turnout was symptomatic of its difficulties activating worker mobilization.Footnote ¹⁸

Another indicator of the underlying competition between the MST and the CUT was the latter's foray into the agrarian reform field. With the success of the MST in the countryside and its more combative image, by 1998, both the CUT and Força Sindical had begun to sponsor land invasions by unemployed urban workers to compete with the MST in the countryside and to promote an alternative to unemployment. In the state of São Paulo, twenty-three of the forty-two land occupations were led by the MST, four by the CUT, four by the Confederation of Rural Workers (CONTAG, affiliated to the CUT), three by the MAST, an agrarian reform movement supported by Força Sindical, twelve by independent worker groups supported by local labor unions, and one by the Catholic Church.Footnote ¹⁹

Attempts by unions to settle unemployed urban workers in agriculture show the extent to which they were hard-pressed to develop coherent and forceful actions in favor of the beleaguered workers in cities, but also attests to the success of the MST, a new form of labor organization. As neoliberalism and globalization took their toll among the working class, in addition to the MST, other workers turned to other forms of actions to secure employment and defend their interests. Another example of alternative worker organization is the case of informal street vendors: generally industrial workers that lost their jobs and invested their severance benefits in purchasing expensive manufactured goods for sale to middle class consumers.

Workers' Contestation on the Edge: the Neo-Camelôs

In the late 1990s, with formal unemployment at about twenty percent in large urban areas, and the average time workers remained unemployed at around one year in São Paulo and Rio de Janeiro, unemployed workers turned to other ways to earn a living, like street vending. In the large urban areas, a new type of street vendor appeared and became commonplace on busy commercial streets, often effectively competing with established businesses for customers. This current version of the street vendor (which I have chosen to call the neo-camelô) represents a new and different form of what was often seen in Brazil as marginal “penny capitalism.” The neo-camelôs were by and large industrial workers and their dependents who, having lost their jobs as a consequence of firm restructuring, used the money received from their severance benefits as working capital for the purchase of high-quality consumer goods for sale on the street. Unlike the traditional street vendors or “camelôs,” who sold homemade foods, candies, trinkets, and cigarettes, the neo-camelôs invested in small electronic appliances (telephones, radios, clocks, calculators, shavers, etc.), computer accessories (cords, pads, screen shades, etc.), battery-operated toys, small leather goods, small tools, clothing, and the like. These new street “merchants,” because of their numbers, very low operational costs and their concentration around busy commercial streets of the downtown areas, posed serious competition to shopkeepers, who lost a significant portion of their clientele to these new lower-cost rivals.

As retail business associations and leaders of commercial workers' unions pressured city authorities to remove the neo-camelôs from sidewalks in front of stores to less advantageous locations, vendors reacted in continuous confrontations with authorities, tumultuous mass demonstrations, and an occasional riot to defend their access to prime street space. Throughout 1999, the major cities were seized by civil disorders as masses of street vendors confronted police over the right to have access to sidewalks and to work. With hundreds of arrests and the use of tear gas and riot police, these disturbances became part of the scenario of Brazil.

Most data on social conflict in Brazil are hard to obtain. Reliable aggregate data on the neo-camelôs and their struggles is particularly difficult to find, because neo-camelôs are often engaged in illegal activities, because they are not licensed by government agencies, they evade taxes, and they sell cheaper contraband and/or falsified merchandise. In spite of this, indications of the growing importance of this segment of the working population could be inferred from data taken from newspaper accounts of street-vendor encounters with authorities and reports of neo-camelôs protests.

Graph 10 illustrates the growth of the neo-camelô as an alternative form worker of worker organization and contention. Beginning in 1996, street vendors showed a dramatic increase in their confrontations with authorities. More importantly, they showed the predisposition to engage in defensive collective demonstrations. This is vividly depicted in the increase in 1996 to almost 350 incidents with authorities and almost 50 collective actions, as reported O Estado de São Paulo.

10.

Neo-Camelôs and reports of collective actions, 1995–2000.

After 1996, the number of conflicts remained high, declining slightly in 1997 and 1998, only to increase again in 1999. In 2000, the number of collective actions declined significantly, while the level of incidents with authorities remained relatively high in comparison with the previous years.

These neo-camelôs represented a vociferous and demanding new service sector segment of the working class. Furthermore, street vendors' mobilizations revealed the critical state of workers seeking gainful employment in activities reserved for businesses. Neo-camelôs faced opposition from merchants as well as from fellow commercial workers, who through their unions pressured against the vendors. Commercial workers feared for their jobs as sales declined in stores because of street vendors' were selling goods at lower prices. Furthermore, as street vendors saturated main streets, they made access to shops difficult, often discouraging customers from shopping in the center city and thereby inducing them to shift their purchases to rival shopping centers elsewhere instead. As a result, shop workers as well as storeowners have been adamant in demanding that city authorities remove the thousands of street vendors.

The labor movement was once again unprepared to respond to this new form of protest from the unemployed. The Brazilian labor movement had only just begun to focus its organizational efforts on recruiting unemployed workers. Traditionally, both progressive (CUT) and conservative (FS) unions had regarded as their rank-and-file only those workers employed in the industries under their corresponding jurisdiction. Consequently, street-vendor contestation revealed an abyss between the organized labor movement and a growing segment of the working class excluded from the reach of unions. Furthermore, the CUT has traditionally been less concerned with having a strong presence among commercial workers unions, leaving the bulk of these unions to be recruited by the more conservative Força Sindical. This has meant that the CUT has largely been absent among workers in growing sectors of the economy: The customer service industries into which the street vendors attempt to enter through their penny-capitalist strategies.

The CUT, like Força Sindical, once again found themselves caught in a dilemma between two categories of workers, street vendors (unemployed industrial workers), and store workers; a contradiction which has become a common element in the dilemmas arising from the present phase of capitalist development. The issues raised by the unemployed neo-camelôs point to another lacuna in the Brazilian labor movement: its traditional disregard for urban policies, even though most of these policies affect the well-being of the working classes. This has meant that labor was almost impotent in interceding with local authorities, as the latter tried to deal with the social and political effects of recession since it is in the local government sphere that unemployed workers and their families seek welfare assistance and look to the municipal government for redress. Consequently, one finds that the labor movement has been unable to systematically bring to bear its weight on local authorities as they seek solutions to the growing welfare needs of the population. As one can see from Graph 10, as the conventional labor movement declined in Phases 2 and 3, the neo-camelôs show a corresponding increase in their efforts to defend their right to work, even if only on the streets.

Workers' Contestation on the Edge II: the Perueiros

A similar case was the situation of unemployed workers who used their severance benefits to buy passenger vans to transport paid riders, competing with a faulty city transit system based on private bus companies. As these “clandestine” transportation services provided by what Brazilians call perueiros multiplied in the major cities throughout Brazil, the privately-owned bus companies and bus drivers' unions joined forces to protest against this informal competition which, moreover, did not comply with city vehicle-safety regulations, transit management guidelines, nor paid benefits and taxes. Throughout the latter part of the 1990s, cities were periodically shaken, by bus drivers' strikes against local authorities' refusal to repress the perueiros and in defense of their jobs in light of the decline in riders on the city buses.

Additionally, as authorities moved to curtail the “illegal” activities of van owners, these workers responded through individual and collective resistance. In 1999 in the city of Sao Paulo alone, perueiros protested by burning fourteen buses, sacking another seven buses, sequestering one bus, and slashing the tires of another nine buses as they resisted arrest and the confiscation of their vans. That year police apprehended 161 vans; and in the first two months of 2000, police had already apprehended 1,420 vans, arresting their drivers.Footnote ²⁰

As in the case of the neo-camelôs, data on perueiro contestation is scanty. Newspaper accounts offer the most accessible and detailed information on the extent of this form of working-class action (Graph 11). Newspaper reports on confrontations between perueiros and city authorities and organized collective actions by van drivers show that the perueiro issue arose at the same time as organized labor's decline in militancy during 1996 and 1997 (Phase 2). After a brief interlude of decreased confrontation in 1998, the levels of contestation grew both individually and collectively in 1999 and 2000 (Phase 3).

11.

Perueiros and daily reports of collective actions, 1995–2000.

Once again, the labor movement stood on the sidelines in dismay at the spectacle of unemployed workers in pitched battles against police, city inspectors, and bus drivers demanding the right to gainful employment. As in the case of the street vendors, the labor movement was neither prepared to represent the interests of the workers involved in this confrontation, nor equipped to interfere in issues of urban planning, in spite of the fact that the very deficient urban transit systems in Brazilian cities exclusively affect the Brazilian working class.

The neo-camelôs and the perueiros, along with the growing number of worker-owned microenterprises emerging from the ranks of the once employed workers, add yet another problem to the already multifaceted challenges of the Brazilian labor movement: the working-class entrepreneur.

Concluding Reflections: Informal-Sector Workers and the Working Class

This article has examined some processes that contributed to the weakening of the mobilization capacity of the labor movement and the CUT. The effects of monetary stabilization and economic restructuring under neoliberalism and globalization produced fundamental contradictions within the labor movement that were difficult to resolve. These contradictions mainly manifested themselves in the demobilization of those sectors of workers that had been the mainstays of CUT militancy: metalworkers, bank employees, and civil servants. As the effects of the Plano Real monetary stabilization, neoliberal reforms and globalization negatively impacted these sectors, their unions' ability to respond collectively to these changes declined. We have outlined how economic changes in the 1990s affected each sector and how laid-off, downsized, or otherwise unemployed workers turned to other forms of work and collective action in seeking to redress their grievances and to demand their integration into the economy.

Important alternative movements were developed by the MST in the countryside, and by unemployed, urban, informal-sector workers. The latter engaged in unregulated street vending and transit activities and faced the opposition of business, other unions, and local authorities, as these groups attempted to rid the city streets of informal activities. In the ensuing conflicts between informal sector workers and municipal authorities, one can see how the contradictions that made the labor movement less agile in representing the interests of workers also created the conditions for the emergence of alternative forms of worker organization and mobilization among these informal sector workers.

In examining some of these cases as alternative forms of working class contestation, a conceptual question becomes apparent: are these alternative forms of contestation in fact manifestations of the working class? Some might argue that these workers, in becoming small landowners or microentrepreneurs, have left the ranks of the working class and became part of the “petit bourgeoisie.” Of course, one's response to this question depends on how one delimits the notion of the working class and its presence in Latin-American economies.

It has been evident for decades that in Latin America, the informal sector has been an integral component of the capitalist economy, providing at least some key functions that give these economies the necessary flexibility in work practices and labor relations within the context of economic and political dependency. First, the informal sector acts as a prop to the formal sector inasmuch as it holds in reserve those workers that have not been absorbed by formal employment, allowing these workers to undertake alternative means of making a living in the absence of substantial state social investments in unemployment benefits. To a very real extent, Latin-American capitalists count economically and politically on the availability of informal-sector workers in periods of economic expansion and on the possibility of dismissed workers moving into informality during periods of economic contraction. In this sense, the informal sector provides a buttress for dependent formal economies with weak regulatory states and high levels of income concentration.

Third, much of the work that is accomplished in the informal sector complements the activities of many branches of the formal economy, as in the cases of servicing and maintaining appliances, home and office repairs, and sales of small manufactured consumer goods. In these cases, informal sector workers provide alternative distribution channels for goods and services that would otherwise require significant capital investments from established firms in order to replace these informal workers. Thus, the informal sector constitutes an intricate part of the machinery of the formal economy in Latin America, where workers and consumers pass frequently and intentionally back and forth from one sector to the other, making it impossible to argue that persons in one sector are workers and those in the other are not.

This is shown by data from a 2003 Brazilian census bureau study of self-employed workers in the informal sector.Footnote ²¹ The survey results show that workers are closely tied to the formal sector in that as much as forty-six percent of the microentrepreneurs interviewed said that they entered the informal sector for lack of employment alternatives, as a form of complementing their incomes, or as a good second job. These data illustrate the fluidity between the formal and informal sectors from the worker's perspective. At the same time, the study shows that forty-nine percent of workers employed in these microenterprises were relatives, given that microenterprises only accounted for forty-six percent of the total of self-employed ventures in the sector. The data illustrate how in the lives of workers, both sectors are intertwined as people seek gainful employment to support themselves and their families, finding work opportunities in activities that complement the formal economy.

Conceptual approaches that describe class structures through typologies based on work and management practices in the formal sector generally may overlook the fact that many workers are simultaneously employed in the formal sector, and jointly, with some relatives, engaged in informal work activities. Classifying workers in this manner presupposes that the formal sector constitutes a “true” working class and the informal sector worker is some sort of provisional laborer or even a type of “petit bourgeois” or “penny capitalist.” If one looks at income-earning work as the category relevant in defining the working class, and not just job descriptions in the formal sector, classification schemes would most likely place the informal sector activities at the same level as those of the formal sector. Alas, in the developing countries this would certainly make more sense inasmuch as a significant proportion of workers are in the informal sector.

In addition, this focus on work would highlight working-class families as important mediators of the labor force in both sectors, especially considering that many family members acquire their first work experiences in the informal sector. In this sense, the working-class family is not only a central unit in the analysis of work and consequently of the constitution of class structures in Latin America, but is also the locus where the array of working-class economic practices are developed and learned, and where working-class culture is also produced and reproduced.Footnote ²²

The complexity of the dynamics of worker participation in the formal and informal sectors makes it clear that by focusing exclusively on work as a job description, as well as its tasks and location in the hierarchy of control of capitalist firms, one loses the importance of the notion of work as a set of collective activities directed toward making a living. In the case of the working class, we should focus not only on the individual worker in the place of employment, but on that set of activities that compose the working-class family's efforts at earning a living for the group as a unit. Furthermore, the socioeconomic dynamics that link both sectors today in neoliberal Latin-American economies are more complex than reflected by characterizations of individuals' work situations based on a model of the worker-employer relationship.

Today, new models of group cooperation are appearing within the informal sector that may gradually become models for the organization of cooperative work in the formal economy as well as provide alternative forms of organization for political action in defense of these workers' rights.Footnote ²³ Local and national governments in the region, in response to these pressures, have attempted to incorporate informal-sector activities by creating special programs that promote these work cooperatives and facilitate their legalization through public incentives, tax reforms, and loans to microenterprises. These steps bring into the discussion the need to reconceive the working class and the forms of its work and political organizations.