Nursing wage floor at the heart of the presidential race

Two weeks before the first round of the elections, Economy Minister Paulo Guedes is trying to dig up funds to help states and municipalities pay the minimum salary for nursing, approved by lawmakers more than two months ago. Senate President Rodrigo Pacheco is also struggling to find solutions to mitigate the measure’s impact on private health service providers.

Beyond being a mere headache for the sector — which says it has no way of complying with a minimum wage around 30 percent higher than what is paid today — the issue has become a central topic in the presidential race.

Initially proposed by a senator from presidential frontrunner Luiz Inácio Lula da Silva’s Workers’ Party, the new law was approved in Congress without indicating how it would be paid for. 

Mr. Bolsonaro had the power to veto the law, but did not out of fear of negative press. 

Lula’s campaign blames the government for not having foreseen a way to pay for the measure. Meanwhile, the government’s economic team fears the Supreme Court will force the federal government to bear the costs itself, taking the burden off states and municipalities.

Last week, Supreme Court Justice Luis Roberto Barroso gave federal and health agencies 60 days to provide data on how the nursing minimum salary would impact their sectors. Meanwhile, the justice granted an injunction suspending the wage floor’s implementation, a move later upheld by the rest of the court. 

Nursing unions from different regions are already organizing work stoppages and strikes. 

In the bill approved by Congress, the estimated overall impact of the new law was BRL 16 billion per year, with BRL 5.7 billion falling on municipalities, states, and public entities; BRL 5.4 billion on the private sector, and another BRL 5 billion on philanthropic service providers that serve patients primarily by way of the public health system.

These estimates, apparently, were undercalculated.

The confederation of philanthropic hospitals (CMB) talks of a larger impact, of BRL 6.3 billion. And the association of municipalities estimates an additional cost of BRL 10.5 billion per year, with the aggravating factor of perhaps having to lay off a quarter of more than 143,000 primary care professionals.

A survey commissioned by health sector entities with more than 2,000 service providers estimates 83,000 layoffs and the possible closure of 20,000 beds if the measure is adopted as is.

Government and senators want to reach a solution before the first round of elections on October 2. Three alternatives are under discussion: altering how much each clinic or hospital receives for each procedure carried out via the public health service, implementing payroll exemptions, or compensating state debts as a way of mitigating the effects of the new law. As Economy Minister Guedes feared, all these measures would impact the federal budget.

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