Sergio Firpo: Lula’s election should lead us to discuss real problems again

For some years now, we have wasted our time debating or just getting annoyed with topics like the communist threat, gender ideology in schools and other crazy agendas.

Starting this Sunday, maybe we can refocus on what really matters to us. Real life, finally.

I anticipate here, optimistic and a little anxious. I want to return to a topic of debate that was banned in the 2000s and the first half of the 2010s: labor reform.

From what I could learn from reading the “Letter to Brazil of Tomorrow”, released yesterday, we insist on solving problems such as informality and unemployment of the most socially vulnerable workers on the basis of the pen. The part of the text that deals with the subject follows below.

“In addition, we will face unemployment and the precariousness of the world of work, with a broad tripartite debate (government, entrepreneurs and workers), to build a New Labor Legislation that guarantees minimum rights – both labor and social security – and decent wages, ensuring the competitiveness and business investments.”

Instead of using the expression “repeal of the 2017 labor reform” that circulated earlier this year, the letter brings the “construction of new labor legislation”. It is not clear that there is a significant distinction between these two ways of talking about the same thing.

There are several items of our labor legislation that lead to the maintenance of high rates of informality and low labor productivity and that were not changed in 2017. We continue with high dismissal costs, high taxes and payroll contributions and several incentives for turnover.

The 2017 reform brought important changes in union funding, in the way in which the Labor Courts are used and, in theory, but not in practice —at least until now—, in the flexibilization of the hiring modality. Effects of the reform on informality and productivity were not felt.

There are several reasons why the reform did not generate effects. Short period of time after the reform, pandemic and, not least, the absence of changes in items that could affect informality and productivity are some of them.

It is chilling to imagine that the “broad tripartite debate (government, business and workers)” will be led by the same entities that continue to ignore informal workers (trade unions and federations of industry and commerce). The outcome of this tripartite debate will potentially generate more rights, which will be systematically violated. And the discussion on job regulation by application may end up being carried out without the participation of workers who use this tool, but who are not represented by the centrals.

The letter also calls for the re-industrialization of Brazil, which would be induced by the use of state funding and stimuli. There can be few policies that are more concentrating of income and market power than this kind of policy. These are measures that have enormous potential to increase firms’ wage-setting power, leading them to hire less than the socially optimal and pay lower wages.

I hope that the result of Sunday’s election will allow us to return to discussing topics such as changes in labor legislation. We will still face resistance to engaging in issues relevant to us. It is worth remembering that in this new legislature, most of those elected were elected because of fanciful agendas. We shall therefore continue to be irritated for some time to come. But the end of obscurantism in the federal executive will give us breath and hope that the public debate will once again be occupied by the problems of real life.