Friday, 16 January 2009

Brazilian Unions Threaten to Strike to Fight Mass Dismissals; We Insist They Will End Up Giving In to Pressure

O Estado de S. Paulo reports today that most trade unions are ready to launch nationwide strikes to fight a wave of dismissals due to the global crisis (click here to read story.) First, let's assume it -- at this point Brazil's on a recession. Second, whereas the position of workers is understandable and admissible, it is not sustainable.

There is a lot of noise and the scheduled meetings risk turning into another round of talks with no specific goals. Or another opportunity to demand a reduction in interest rates and taxes, which at the moment are not a significant problem. The decision by Força Sindical, Brazil's second largest confederation of unions, to walk away from the negotiations handed a setback for the business sector proposal of cutting salaries and work time to fend off dismissals.

President Luiz Inacio Lula da Silva and his ministers have little time to convince unions that it might be better to ask their affiliates to renounce to some of their rights temporarily in this struggle to preserve jobs. But a good signal to investors in general is that the recession is offering an opportunity to ease the old-fashioned labour legislation the nation has.

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