Revolutionary Communist Party (PCR)

The increase in the wealth of the capitalists and in the exploitation of the workers

The development of the capitalist mode of production in Brazil has brought about the division of society basically into two classes. On the one hand, a minority of big money moguls – bankers and big businessmen who own industries, supermarket chains, land and banks – and on the other, the vast majority of society, the workers, peasants and all those who live to work because they have only their labor power to sell.

In fact, only five thousand families (0.01% of the families in Brazil) own wealth equivalent to 42% of the Gross Domestic Product (GDP), that is, 2/5 (two fifths) of all the wealth produced in Brazil for a year, according to the book “The Rich of Brazil,” by the economist Marcio Pochmann.

Therefore, when there is economic growth, it is the business owners, the employers who benefit, increasing their wealth and becoming richer. An economic survey revealed that last year the 325 largest companies had an accumulated profit of R$128.4 billion reals. In 2011, that profit was R$192 million. (G1, April 2, 2013)

Also when the government pays the interest on the foreign debt this enriches that same minority: Brazil has 63 million families, but 20 families absorb 70% of the payment of the debt interest.

To conceal which class really benefits from economic growth, the defenders of capitalism present the creation of millions of jobs as the part that corresponds to the working masses in the economy. In total, 19 million formal jobs (portfolio assigned) were created in the past decade. An extraordinary supply of opportunities, they say.

However, creating jobs is no act of kindness of capitalism. First, because the capitalist needs the workers to produce commodities, to sell them and even to buy many of them. Furthermore, to keep workers employed is no gift of the bourgeoisie.

Moreover, there is no lasting or sustainable growth under capitalism. Always after a period of growth, a crisis arises that affects some sectors of the economy, causing the closure of factories and workshops, and consequently unemployment and falling wages.

Let us see: since the capitalist crisis began in 2008, 20 million jobs have already been eliminated. In total, more than 200 million people are unemployed worldwide and the International Labor Organization (ILO) forecasts that, by the end of 2014, more than 8 million people will be laid off. Meanwhile, the ILO also forecasts that 60% of children (or about 129 million boys and girls) are working in agriculture or extractive industry worldwide. (Adital, May 13, 2013.)

Demonstrating these ups and downs of the economy, Brazil has had varied rates of growth in the past ten years:

It is worth adding that the much-vaunted economic growth, besides not being constant, is the result of a series of governmental measures to stimulate the economy, such as aid packages of federal taxes, subsidies to large industries, particularly to automakers and to corporate agriculture, devaluation of the real to benefit the exporters. Since 2008, the Government issued R$400 billion in government bonds to ensure that the public banks and the National Treasury would subsidize businesses. But, although they were defined as temporary, these measures have already lasted for years, and if the Government were to suspend them the economy wiuld immediately return to a negative rate of growth.

More than this, since the majority of the population receives low wages, the consumption of the population is due to a high rate of indebtedness. According to the Central Bank, in March household debt corresponded to 43.9% of annual income, and in April, the household debt to the banks reached R$1.1 trillion reales, almost 25% of the Gross Domestic Product (GDP).

Precariousness and turnover

On the other hand, one characteristic of the jobs created in recent years is their precariousness. Undoubtedly, 94% of the jobs created between 2004 and 2010 have wages of up to 1.5 times the minimum wage, and seven out of ten formal jobs created in Brazil are in the service sector, which generally respects labor legislation less, there is a high turnover and wages are lower. In fact, there is also a large contingent of informal labor power and thus with no labor rights or social protection in the 21st century.

The increase in productivity of the Brazilian worker has been much greater than the increase in wages in the country: “from 2001 to 2010, the average productivity in Brazilian industry was 27.7%. That is, if a worker produced 100 pairs of shoes per day in 2001, in 2010 he produced almost 128 pairs. Meanwhile spending on payroll – which includes besides wages, labor costs that do not go directly into the pocket of the worker – increased 20.7%,” as Ana Georgina Dias analyzed, DIEESE (Inter-Union Department of Statistics and Socio-Economic Studies) Bahia.

Besides the low wages, there is also a high turnover of workers, that is, the replacement of one laid-off worker by another in order to reduce business costs. Just from March 2012 to February 2013, there will be 21,668,641 workers hired and 20,552,301 laid off in Brazil, a turnover of more than 90%, creating a situation of great insecurity for the worker, since he does not know how long he will be on the job or when he will get another job. (Turnover and Flexibility in the Labor Market – DIEESE.)

The deepening exploitation of the workers

As Marx explains, although all labor has the appearance of paid labor, only one part of the daily work of the worker is paid by the capitalist; the other part is not paid, which constitutes the fund from which is formed surplus value (from which profit originates):

“Under the system of wage labor, that is, under capitalism, the time that an employee works for free is concealed, hidden by the payment of wages.” (...)

“The surplus value produced by prolongation of the working day, I call absolute surplus value. On the other hand, the surplus value arising from the curtailment of the necessary labor-time, and from the corresponding alteration in the respective lengths of the two components of the working day, I call relative surplus value.” (Karl Marx, Capital, Volume I, Chapter 12)

Therefore, to accumulate more capital and avoid the falling rate of profit, the bourgeoisie, the class that owns the means of production, is always looking for ways to increase the exploitation of the workers in order to increase the unpaid labor.

This is precisely why the [monthly] minimum wage of the Brazilian workers is one of the lowest in the world – $678 reales – equivalent to U.S. $340, less than that paid in some countries of Latin America: in Argentina, the minimum wage is U.S. $617, in Chile $480, in Colombia $374, in Paraguay $385, in Uruguay $405 and in Venezuela $476. (Comparison of the 2013 minimum wage in 20 countries of Latin America.)

Even worse, according to the DIEESE, in May of 2013 the minimum wage required for the worker to meet his needs should be $R2,892.47, four times the current base level.

The increase in outsourcing

In order to increase surplus value, the capitalist seeks to impose labor laws that allow him greater freedom to hire, fire and pay wages below the value of labor power. This is why outsourcing is increasing in the economy, or rather, workers having two or three jobs and working twice as much. As we saw, for capital to accumulate it needs an increase in relative or absolute surplus value, that is, the deepening of the exploitation of the worker through more hours of work and the lowering of wages. Outsourcing leads to both processes. A study by the United Federation of Workers (CUT) revealed that contract workers work an average of three hours longer per week than those hired directly and earn 27.1% less than the latter. Today, Brazil has 25% contract workers. Petrobras, for example, has 80 thousand employees of the company and almost 300,000 contract workers. At the current rate of growth of outsourcing, it is possible that in ten years the number of contract workers will exceed those directly hired. Moreover: various bills in the National Congress are meant to increase outsourcing and to double the number of workers in that situation.

The exploitation of workers in Brazil has increased so much that there are cases of companies that have moved from China to Brazil. In fact, this year the U.S. company Mattel, the largest toy manufacturer in the world, decided to move part of its production to Brazil, calculating that its costs here would be lower than in China.

In Sao Paulo, Bolivian and Peruvian immigrant workers come to work in the textile industry 17 hours a day. Proof of this blatant action was conducted by the Public Ministry of Labor, which confirmed that immigrant workers were subjected to conditions similar to slavery in the city named Americana, in Sao Paulo. The workers produced items with the label Basic + (commissioned by the company HyppyChick and sold in American Stores, a 3G company), they were informal workers, their working conditions were degrading and their housing substandard. (Folha de Sao Paolo, February 16, 2013).

To make matters worse, there are several government proposals for a new pension reform aimed at raising the minimum age, doing away with the different professional categories and with indexing the minimum wage. There are also proposals to make the labor laws “flexible”, to increase the working day to more than eight hours and two additional hours of work daily.

Taking into account also the long time the worker spends to travel from home to work and back, we see that the Brazilian worker has very little time for rest.

When the worker retires, he will receive much less, and his life will become even more miserable, because, as he is already old, he will have to spend more on medicine, food and health care. While those who do not work, but live off the exploitation of the labor of the workers, get rich, they live in mansions, own yachts, planes and imported cars, have plenty of leisure, have broad access to culture and entertainment and enjoy all the goods that society produces.

Poverty continues to grow

Further propaganda in defense of the capitalist system in Brazil is that we do not need to change this system to end poverty, since millions of people have stopped being poor and entered the middle class, and poverty is being eradicated.

But does this mean getting out of poverty, no longer being extremely poor, joining the middle class or eradicating poverty?

The definition “extremely poor “ is a recent creation and is based on an estimate of a value of 70 reales per month (2.5 reales per day), equivalent to a food basket with the minimum number of calories needed to feed a person, according to the criteria of the United Nations Food and Agriculture Organization (FAO). The definition of poor is based on a value of 140 reales, twice the value of the definition of “extremely poor.”

The government is carrying out a monetary transfer, in cash, for families (an average of R$152 reales per family) in order to remove them from the category of “extreme poverty.” Thus, with that financial support they can say that this person ceased to be miserable and has become poor. Or that he stopped being poor and entered the middle class. It happens that due to the monopolization of the economy and financial speculation with commodities, mainly food, the price of a meal increases almost daily. In May, the minimum cost for a person to eat per day was R$3.50, meaning a cost of R$105 per month just for food.

Thus, that person, according to the criterion of the government, is no longer extremely poor or miserable, although what he earns does not allow him to pay for a meal, plus electricity, water, housing, transportation or buying clothes or shoes.

Moreover, the value of R$70 reales was established in 2009; readjusting that value for inflation in that the period, the number of extremely poor or miserable people as calculated by the government would have grown tremendously: it would leap from 2.5 million to 27 million.

It is worth recalling that, in 2003, when the Family Allowance program was launched, the program took care of 3.6 million families; today there are 13.8 million families, about 52 million people. One must ask: if poverty has declined, why then has the number of beneficiaries of the Family Allowance program increased? Indeed, the World Bank estimates that 38% of Latin Americans, including Brazilians, are vulnerable, that is, at risk of returning to poverty.

Thus, although there was a small improvement in the situation of these families, the people are still really poor. Poverty means being homeless, not having a sewage system, not having an education, not having health care, not having access to culture, to water, to the products that they produce, since these are in the hands of a minority.

The hoped for “new middle class” is another fiction. Actually, according to the Household Budget Survey of the IBGE [Brazilian Institute of Geography and Statistics], of the “31.5 million households of the ‘new middle class’, 82% have no overdrafts, 65% have no credit cards, 75.1% and 71.4% respectively have no health care plan or higher education, and 75.1% of the households have only one or no bathroom. “ (Reinaldo Gonçalves, Brazil negativado, Brazil invertebrado).

Actually, with a greater number of persons employed in the labor market, what has taken place was not the formation of a new middle class, but a significant increase of the impoverished working masses, where the vast majority are impoverished, where the vast majority of the jobs created had a salary less than 1.5 times the minimum wage. On the other hand, in recent years, the number of people living exclusively from income from property (profit, interest, ground rent and house rent) increased. Consequently, the contradiction between the workers and the rich has been aggravated (Marcio Pochmann, The New Middle Class?).

No doubt, every day capitalism is creating more poor people with the increased cost of living and through carrying out layoffs. Take the case of the world's greatest power, the U.S.: despite a GDP of U.S. $15.6 trillion, it has 46.2 million poor people, 15% of its population, and an increase of 47% in 12 years. On the other hand, the rich 1% control 40% of the national wealth.

The living conditions of the Brazilian people

While the rich get richer every day shamelessly showing off in TV programs their luxury cars, mansions, drink champagne in gold cups, spend R$700 thousand reales on jewelry in a single day or R$75 thousand reales in an afternoon of shopping in a mall, they put their dogs in swimming classes, as was shown on the program Rich Women on TV Bandeirantes, the vast majority of the Brazilian people live precariously and in poverty.

Only 46% of Brazilians have a sewage system and 37.6% have wastewater treatment. In the Northeast, only 19.8% of the population, and in the North 8.1% had a sewage system and, according to research by the Gentulio Vargas Foundation, Brazil’s housing deficit is 5.8 million families, who have nowhere to live or are living in inadequate conditions. In the city of Sao Paulo alone, there are over 1,600 shantytowns. Those who live in the poor neighborhoods, in the so-called periphery, still suffer from not having the Metro, few buses and one of the most expensive fares in the world.

Health care is extremely precarious, and the advance of privatization is evident when 48 million people are uninsured. In the hospitals and clinics, 150 million Brazilians who use the public health system – the Unified Health System (SUS) – suffer from a lack of doctors and the delay in being taken are of at health centers or hospitals in the public network. A survey by the Health Ministry itself shows that patients in the SUS have difficulties in being taken care of, especially for more complex procedures. They even lack medicine in the clinics and hospitals, surgeries are canceled due to lack of beds, and for years the Aedes aegypti mosquito [dengue fever and yellow fever mosquito – translator’s note] has killed millions of people. The number of beds available is very small and health professionals are poorly paid.

Actually, the workers, those who produce the wealth, live to work and work to live, since, as only they possess their labor power, they are forced to sell it to the owners of the means of production, the capitalists. For selling their labor power, they receive a salary that is barely enough to pay their expenses for transportation and food for their families and, in exchange for that salary, they do strenuous and repetitive work throughout their life. They are often injured and ill as a result of their work; according to the Ministry of Social Welfare, there are more than 700,000 work accidents per year.

Even more serious is the situation of working women. Wages for women are only 75% of what men earn for the same functions, according to the Inter-Union Department of Statistics and Socio-Economic Studies (DIEESE). There is more: in addition to this work outside of the home, women are also primarily responsible for housework, spending 21 hours a week on household chores, due to lack of childcare, collective laundries and full-time schools. Even more: according to the organization Reporter of Brazil, 258,000 children and adolescents between the age of 10 and 17 years work in other people’s homes of whom 94% are female.

Thus, the much-worshiped the Brazilian capitalist economy brings huge profits for the capitalists, but does little to improve the lives of the Brazilian workers.

Thus, if on the one hand we have a minority of billionaires who own factories, workshops and banks and have their own islands and beaches, mansions, private yachts and planes, on the other hand, the vast majority of the Brazilian people live in misery. They are men and women who own nothing, because what they produce does not belong to them.

Each day, the worker lives with more difficulties due to low wages or unemployment, he builds shacks, houses of cardboard next to the luxurious palaces of the rich. In the countryside, every day ruined small peasants leave their home and go to the cities but they have no money to buy seeds, to irrigate their lands, or even to buy food.

Thus, the consequence of capitalist economic growth is precisely the worsening of the living conditions of the workers. In short, the worker uses part of his time not to live, but to enrich his employer.

Therefore, it is a mere illusion to seek to resolve the great social problems in our country just by fighting the abuses of capitalism and keeping intact its base, the private ownership of the means of production. Therefore, without establishing the social ownership of the means of production, the gap between rich and poor, between exploiters and exploited, will grow rather than diminish.

In fact, while the masters of the world, the rich, are constantly enriched, piling up millions upon millions of bank shares and living in opulence, every five seconds a child under ten years of age dies of hunger or as a result of malnutrition, and 1 billion human beings live severely malnourished, crippled by permanent hunger, according to the United Nations Organization (UNO). In reality, the worker has only two choices: give up and behave well or fight for a revolution and socialism.

Therefore, the task imposed on the revolutionaries at the present time is to present a clear alternative to the capitalist system and to work vigorously to develop and advance the consciousness of the popular masses, especially the working class and the peasantry; therefore it is essential to strengthen the principal instrument of the revolutionary vanguard: the communist party.

Luis Falcao
Central Committee of the Revolutionary Communist Party – PCR Brazil

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