Lula plays hardball with civil servants asking for higher wages

Management Minister Esther Dweck (center): No room for wage bumps. Photo: Marcelo Costa/ABr

Brazilian Management Minister Esther Dweck told in a Monday interview to newspaper O Globo that the Luiz Inácio Lula da Silva administration will only increase civil servants’ wages in the occurrence of a primary surplus. So far, however, there is no room for wage bumps, she says.

Ms. Dweck, however, extended an olive branch to disgruntled government workers, saying a 4.5 percent flat increase for all careers is expected for both 2025 and 2026.

The Finance Ministry will already have a tough time meeting its zero-deficit target this year. Instead of wage bumps, the government wants to improve benefits as a less costly step.

An increasing number of civil servants are going (or threatening to go) on strike as a way to pressure the government for better wages and career opportunities. That includes Central Bank workers, Environment Ministry officials, sanitary inspectors (which are key for the clearance of food exports), and customs officers.

In 2020 and 2021, public sector strikes accounted for about a third of all strikes in Brazil, our Brazil Daily newsletter showed on February 20. That jumped to about 60 percent of all work stoppages in the country in 2022 and the first half of 2023 (data for all of last year has not yet been released).

Federal civil servants are demanding a pay rise of between 23 and 34 percent (to be paid in installments between 2024 and 2026). The government’s counterproposal was a maximum 19 percent increase by 2026, but with no change in pay this year. In 2023, the administration gave all federal workers a 9 percent across-the-board raise.

A few occupations got a leg up, though. Federal marshals got a raise last year, and tax auditors are eligible for bigger bonuses. But that sparked anger from other sectors of the public workforce — including in the Central Bank.

Brazil spends 13 percent of its GDP on public-sector salaries and pensions, the 15th highest among 142 countries analyzed by the World Bank. And federal employees earn an average of 96 percent more than private workers.