Jair Bolsonaro and the pay raises of civil servants

A few months before the next presidential elections in which he would seek a second term, the president of Brazil Jair Bolsonaro is trying to find a way out of a tricky position regarding civil servant salaries.

Bolsonaro speech federal police of Brazil
Bolsonaro wants to give a pay raise for federal police officers | © Palácio do Planalto, 2020

Brazil President Jair Bolsonaro on April 13 considered granting a pay raise of 5 percent to all federal civil servants from July, including military personnel, several Brazilian news media reported.

The recent move follows weeks of controversy about federal public sector employee salaries. But it may not solve all the issues of the president on the matter.

Jair Bolsonaro originally made no mystery he wanted to give a raise to Federal Police, Federal Highway Police and National Penitentiary Department employees.

Although he had briefly mentioned a pay raise for all public sector employees in November, the president announced in December that salary adjustments would amount to 2.8 billion reais (US$ 596 million) for law enforcement in 2022, and up to R$ 11 billion by 2024.

The federal budget for 2022 approved by Congress eventually provisioned R$ 1.7 billion for salary increases.

Police are well known to be a solid group of Bolsonaro supporters as Brazil’s president seeks a second term in October. But opinion polls, for now, show Bolsonaro second behind former president Lula Da Silva.

The idea to increase salaries only to a category of civil servants irritated the other ones, leading to strikes and protests from the Central Bank of Brazil and Customs before the president signed the federal budget in January. More than a thousand public servants handed over their resignation letters, half of the central bank employees stopped working for two hours as a protest.

The president eventually signed off the 2022 federal budget and the R$1.7 billion for pay raises was eventually approved although the exact allocation of funds was not clearly stated, holding off on the decision for a moment.

But two weeks later, Bolsonaro confirmed this money was dedicated to law enforcement salaries and considered postponing the raise to 2023 depending on the other federal public sector employee reactions. But the federal budget for 2023 would only be signed off by the president elected in October.

Employees of the central bank started on April 1 indefinite strike, a branch with a powerful voice as a massive strike at the central bank can disrupt financial operations in the country. Some departments have more than 50 percent of employees on strike.

Alternatives to the 5 percent raise for everyone have been considered, including R$ 400 ($85) vouchers. But an increase applied to all was expected to restore calm with everyone.

Except for the National Central Bank trade union, such a decision is far from enough to stop the strike. The trade union argues that since their last salary adjustment, already 5 percent in 2019, their pay lost almost 25 percent because of inflation.

The 5 percent raise is actually even lower than the inflation rate of 11.3 percent over the last 12 months, according to the Brazil statistics institute.

Brazil is facing economic difficulties, high inflation rates and doesn’t have much leeway. In the context of rising prices, the federal minimum pay increased by 10 percent to R$ 1,212 ($223) (state governments may decide on a higher minimum). But most civil servants’ pay has been frozen for years.

Tax auditors, police forces, central bank employees are some of the most powerful public sector categories, and had a salary adjustment in 2019 while many other federal civil servant salaries have been frozen since 2017.

Moreover, the 5 percent readjustment is expected to require R$ 6.5 billion for the next six months, much more than the R$ 1.7 billion signed off for the year in January, which would mean budget cuts from other areas. Bolsonaro had earlier this year said they all deserved to get a raise but that it was financially impossible. Minister of Economy Paul Guedes said last week this solution could “destroy Brazil’s economy”.

Bolsonaro’s relations with public administration have often been difficult. And the new scheme, far from satisfying public sector employees that are now included, could also bother police forces. Police considered the information a “great disappointment” as it would see its increase reduced. The National Association of Federal Police Delegates mentioned an “unfair breach of commitment”.

Police officers can also go in the streets if raises don’t suit them. Thousands of state law enforcement employees in Minas Gerais have been protesting against the salary increase proposed by the state government considering it was too small. Brazilians also vote for the state governors and Congress members in October along with choosing the future president.

Congress needs to approve a budget reallocation very soon. Time is pressing if Bolsonaro wants to avoid conflict with the public sector before the elections.

And Brazilian laws prohibit a pay raise across the public administration during the last 180 days of the presidential mandate to avoid buying votes. The deadline has passed on April 2 as the first round of the elections is organized on October 2. It cannot affect the next administration’s budget either. But the regulation applies when the increase exceeds the election year’s inflation rate. And the 5 percent would be below the 7 percent inflation rate forecast. Anyhow, any law on salaries would need to be implemented by July 4 at the latest.

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