Alternative Forms of Working-Class Organization and

the Mobilization of Informal-Sector Workers in Brazil

in the Era of Neoliberalism

Salvador A.M. Sandoval

Pontifı́cia Universidade Católica de São Paulo; Universidade Estadual de Campinas

Abstract
This article examines recent changes in working-class collective actions. First it explains
which were the main causes for the decline of traditional labor union militancy
resulting from effects of economic stabilization, neoliberalization, and globalization on
those key segments of labor movement that accounted for the backbone of union
militancy as in the case of the automotive workers, bank workers, steelworkers, and
civil servants of the Brazilian economy during the decade of the 1990s. Secondly, the
article analyzes the emergence of alternative forms of worker contention among the
urban informal sector and the rural workers through the landless workers movement,
which also have been affected by the processes of neoliberalization and globalization,
but unlike the workers in the formal sector, these continue to contend for worker
entitlements and introduce new forms of worker organization different from the
conventional union organizations upon which is based the Brazilian labor movement.

How has neoliberalism affected how workers protest, and what new forms of
working-class contestation have emerged as a consequence of neo-liberal policies?
These questions, relevant throughout Latin America, are even more significant in
the case of the Brazilian labor movement, which was one of the strongest in the
region and had reached the apex of its capacity to mobilize workers at the
beginning of the 1990s. Unlike its counterparts in other Latin-American countries,
moreover, the Brazilian labor movement in the 1980s represented a clear rupture
with traditional clientelistic labor politics. Together with the progressive clergy of
the Catholic Church and leftist intellectuals, it created a new labor party that
would become a point of reference in Latin-American politics. Before the
1990s, the Brazilian labor movement represented a new force in national politics
through its incomparable capacity to mobilize workers in the workplace and to
press for economic and political reforms.
As early as 1978, backed by progressive Catholic clergy, left-wing labor
leaders embarked on the task of systematically challenging military rule
through strikes that gathered momentum each year among the working-class
and other broad sectors of civil society. By 1984, this new antipopulist labor
movement, called the “New Unionism,” was at the core of massive demon-
strations throughout Brazil demanding an end to the military dictatorship and
direct presidential elections.
After redemocratization in 1985, the New Unionism continued to strengthen
its capacity to mobilize workers, as evidenced by several thousand strikes and four
International Labor and Working-Class History
No. 72, Fall 2007, pp. 63–89
# 2007 International Labor and Working-Class History, Inc.
64 ILWCH, 72, Fall 2007

nationwide general strikes.1 At the same time, the New Unionism, organized
under the banner of the National Workers’ Confederation (Central Única dos
Trabalhadores [CUT]) was an instrumental player in the formation of the
Workers’ Party (Partido dos Trabalhadores [PT]), a new progressive and
nonpopulist political party. Today, the CUT still has an impressive presence in
union and national politics as the strongest labor confederation, affiliating over
fifty percent of Brazil’s labor unions, including the largest and economically
most significant ones.
Since 1994, with monetary stabilization and the government’s introduction
of neoliberal policies, there has been a significant decline in union-led strikes.
The decline in union mobilization resulted not only from the effects of econ-
omic recession as a consequence of neoliberal reforms and the opening of
the economy to foreign competition, as most authors have pointed out; but,
just as importantly, from the erosion of the rank-and-file support structure
within the CUT, as well as that organization’s inability to adapt to the socio-
economic changes resulting from monetary stabilization, neoliberalism, and
globalization.
In the first part of this article I examine how the conditions for mobili-
zation were undermined for key segments of unionized workers––metal
workers, bank workers, and civil servants––that were the mainstay of militancy
within the labor movement. The weakening of these segments’ mobilization
capacity, I argue, was a consequence of monetary stabilization under the
Plano Real and the opening to foreign investment that accompanied it.
Stabilization permitted a new expansion of the economy and these unionized
segments confronted new challenges as a result of the increased foreign invest-
ment that entered Brazil with the end of hyperinflation and subsequent
economic restructuring.
Even though labor unions failed to mobilize workers to confront deterior-
ating employment and working conditions under neoliberalism, not all workers
were passive when confronted with unemployment and layoffs. Some managed
to organize those working in the informal sector to stage confrontations with
authorities, storeowners, and other workers. This alternative arena of worker
mobilization has marked the urban political landscape in recent years. The
major political parties that controlled city governments invariably pressured
the national government for solutions to the growing unemployment as a
consequence.
The second part of this article examines three cases of alternative working-
class contestation that have arisen due to the impact of the neoliberalization of
the Brazilian economy and institutionalized resources for severance payments.
The first case is that of the Landless Workers’ Movement (Movimento dos
Trabalhadores Sem Terra [MST]), which underwent significant growth in the
1990s through the recruitment of the urban unemployed and by offering them
an alternative to the apparent decline in union combativeness. A second case
is that of street vendors, in which I examine a new category of salespersons
who sell expensive and often illegally obtained industrial goods in contrast to
The Era of Neoliberalism 65

traditional street vendors that sell small, homemade trinkets and foods. This new
type of vendor was one byproduct of neoliberalism, as industrial workers were
dismissed and invested their severance benefits in manufactured goods that
would attract middle-class consumers. Attempts by city authorities to repress
these vendors resulted in widespread conflict and the emergence of union-like
organizations to defend the right to work the streets. Finally, I analyze a
similar case of the independent passenger-van owners, workers that also lost
their jobs in this period, and, like the new street vendors, invested their sever-
ance payments, but in this case purchasing passenger vans and using them to
compete against urban bus companies. The conflicts that ensued due to repres-
sion by municipal authorities represented yet another form of alternative
working-class contention resulting from neoliberalism.
Since then, the Partido dos Trabalhadores (PT) lead by Luis Inacio Lula da
Silva and the New Unionism have been among the major forces for institutional
reforms, the broadening of democratic rule, and the improvement of social
welfare. The new unionism leadership forged the CUT, the first national organ-
ization bringing together labor unions of all branches of the economy. Although
the CUT has faced factionalism over the last two decades due to internal ideo-
logical cleavages and the formation of Força Sindical,2 a dissident confederation,
the CUT today remains clearly identified as the progressive and militant labor
confederation.
For this reason, the rise of alternative forms of labor contestation is, to a
large extent, a consequence of the political and strategic contradictions facing
the labor movement and the CUT, as a result of monetary stabilization and
neoliberalism. I argue that monetary stabilization rather than neoliberalism or
globalization undermined the labor movement and the CUT’s capacity to
mobilize rank-and-file workers against the negative effects of neoliberalism
and globalization.
A second important function of the informal sector is that of providing a
large range of alternative forms of income-earning opportunities for working-
class families to complement low formal-sector wages through family-based
ventures in producing, packaging, and selling merchandise and services
directly to consumers. This allows for working-class family members of
various ages to engage in part-time work activities, providing other sources
of income for the family unit, as well as an alternative workplace as a precau-
tion against the possibility of job loss in the formal sector during periods of
economic uncertainty.
The article broadens the discussion of working-class mobilization beyond
union-led actions by illustrating the emerging mobilization of unemployed
workers as they defended work and livelihood in the informal sector or
through actions seeking agrarian reform. We argue that the decline of labor
unions’ combativeness due to globalization, neoliberalism, and the diversifica-
tion of work practices among the unemployed makes it necessary to go
beyond the literature that has until now focused only on workers in the
formal sector and the new unionism of the 1980s.3
66 ILWCH, 72, Fall 2007

The Demobilization of the Brazilian Labor Movement in the 1990s

The Brazilian labor relations system was established by Getulio Vargas, during the
Estado Novo dictatorship (1937–1945), under the auspices of the Compendium of
Labor Laws (Consolidação das Leis do Trabalho (CLT)). The CLT created a cor-
poratist structure of conflict resolution between the bourgeoisie and the working
class with the explicit aim of providing the state with the power to maintain
control over the labor movement. Thus, prior to the end of military rule in 1985,
the Brazilian state exercised considerable control over labor relations and the
internal affairs of labor unions. Because of state intervention into union affairs,
labor leaders were largely dependent on political parties and politicians to
secure their positions in the labor movement and to persuade the rank-and-file
of their political efficacy. Union affairs were generally characterized by populist,
clientelistic relations and working-class contestation was often limited to political
arrangements between union leaders and political authorities.
Military governments after the 1964 coup marginalized the participation of
union leaders in politics, reduced the opportunities of labor leader cooptation,
and dealt with the labor movement through authoritarian methods instead of
pursuing populist strategies of control and cooptation characteristic of civilian
governments in previous decades. During the two decades of military rule, a
new breed of union leaders emerged in some major unions with nonpartisan
labor experiences, as rank-and-file workers and Catholic community groups
organized away from the workplace surveillance of pro-government union
cronies and management. These years of political activism in working-class com-
munities resulted in the formation of a new generation of labor leaders that
during the 1970s gradually took back the unions from government intervention
and laid the groundwork for the emergence a more combative union movement
that challenged the military regime.
In late 1970s, under the leadership of Luis Inacio Lula da Silva, president of
the metalworkers’ union of São Bernardo do Campo in São Paulo, strikes broke
out in the industrial belt of metropolitan São Paulo. Workplace demands were
quickly transformed into protests against military rule, catapulting these pro-
gressive unions into the forefront of the national movement to end the twenty-
year dictatorship, and forcing mainstream opposition politicians to include a
new popular actor in political negotiations for the transition to democratic rule.
Since then, Lula and the New Unionism have been among the major forces
for institutional reforms, the broadening of democratic rule, and the improve-
ment of social welfare. The new unionism leadership created the CUT, the
first national organization bringing together labor unions of all branches of
the economy. Although the CUT has faced factionalism over the last two
decades due to internal ideological cleavages and the formation of Forca
Sindical, a dissident conservative confederation, the CUT remains clearly ident-
ified as the progressive and combative labor confederation.
For this reason, the rise of alternative forms of labor contestation is to a
large extent a consequence of the political and strategic contradictions that
The Era of Neoliberalism 67

the labor movement and the CUT faced as a result of monetary stabilization and
the opening to foreign capital during the 1990s. Monetary stabilization under-
mined the capacity of the CUT and the labor movement generally to mobil-
ize rank-and-file workers against the negative effects of neoliberalism and
globalization.
By the end of the 1980s, the Brazilian labor movement had attained a record
level of mobilization capacity as seen in the number of strikes in that period as
well as the four general strikes that the CUT led. Strike strength was ten times
greater than at the beginning of the decade when the New Unionism first
emerged. On the institutional front, the CUT had consolidated the movement
under a national organization that united eighty-nine percent of government
employees’ unions, fifty-one percent of unions in domestically-owned firms,
and fifty-six percent of unions in transnational corporations.4
Thus by the early 1990s, labor’s presence in the political arena was formid-
able as was its corresponding political party, the Workers’ Party (PT). As
Graph 1 illustrates, strike activity in 1990 reflected the tendencies of the pre-
vious decade, when the labor movement reached a high level of organizational
maturity. In 1990, organized labor led 1952 strikes, with an average of 4654
strikers per event.5 During the decade that followed, however, labor’s trajectory
was in fact the inverse of the 1980s. In focusing on strike performance as a quan-
titative measure of labor’s capacity to mobilize workers, the 1990s can be
divided into three phases representing different political and economic conjunc-
tures and patterns of labor mobilization.
As illustrated in Graph 1, Phase I encompasses the years 1990 to 1993,
when labor was struggling against the effects of hyperinflation. Considering
that these years were marked by severe economic instability, as the country
rapidly slipped into a hyperinflation spiral, labor’s response was direct. Union

1. Labor strikes and average number of strikers, Brazil, 1990– 1999.

68 ILWCH, 72, Fall 2007

mobilization against the erosion of wages due to the twenty-five to thirty percent
monthly inflation rate produced strikes with characteristic dimensions. There
was a significant decrease in the number of strike actions from 1952 in 1990
to 732 in 1993, with a slight increase between 1993 and 1994. However, although
strikes decreased significantly, the average number of strikers per event
increased to record heights. By 1993, the average number of strikers was
7,095 workers per strike. As hyperinflation drained the lifeblood from the
people, workers joined strikes in increasing numbers to protest and defend
their interests. Even though one can see in this phase a fluctuation in the
average number of strikers, it is important to note that in spite of this fluctuation,
strikes showed increases in participants.6
The second phase, between 1994 and 1996, represents the years immedi-
ately following the monetary stabilization program. The Plano Real of July
1994 was an unorthodox economic program to halt spiraling inflation.
Economic stabilization was a fundamental factor in undermining labor’s mobil-
ization capacity in this phase. Strike activity, in terms of number of strikes,
increased slightly over the previous period, but the average number of strikers
declined at a rapid rate, reaching its lowest level since the late 1970s. Strike
actions were focused mainly in specific firms, while large sector-wide mobiliz-
ations ceased. The second phase can best be understood in relation to
Phase 1 and Phase 3. Overall, Phase 2 reflected the difficulties that the
CUT-led labor movement had in dealing with socioeconomic changes created
by economic stabilization.
The data for Phase 3 clearly depicts strike activity in a period of economic
recession due to the monetary policies of the Fernando Henrique Cardoso
administration. Strike levels declined and the average number of strikers had
a small increase over the period between 1994 and 1996. The decline occurred,
in part, because of the effects of the recession on workers’ disposition to chal-
lenge employers in a period of growing unemployment; but the decline in
labor union mobilization also resulted from the erosion of the CUT’s
rank-and-file bases and the organization’s inability to respond to the conse-
quences of stabilization, neoliberalism, and the opening of the Brazilian
economy to the forces of globalization.

The Changing Profile of Strike Demands

Strikers in the first phase made proactive demands, focusing overwhelmingly on
wage increases to combat the galloping inflation that marked those years. After
monetary stabilization in 1994, strike demands underwent very important
changes, clearly differentiating the subsequent Phases 2 and 3. As Graph 2
shows, between 1994 and 1997 (Phase 2) proactive strike demands began a
gradual decline as defensive demands increased. Coupled with a decline in
strike actions, the shift from proactive to defensive demands marks Phase 2 as
a transition period from a period when hyperinflation dominated labor’s
demands to a period of economic stability in which employers, in adjusting to
The Era of Neoliberalism 69

2. Percentage of proactive and defensive strike demands Brazil, 1994– 1999.

the effects of low inflation, turned against workers to lower costs, maintain
higher profit margins, and prepare themselves for the impact of globalization.
This is best exemplified by strikers’ specific demands.7 In Phase 2, wage
demands decrease almost forty percent, while demands for employers’ compli-
ance with contracts rose from eighteen to forty-four percent. During this time,
demands over job security remained at ten percent.
In Phase 3 the profile of strike demands changed the most. Beginning with
1997, as strike actions and worker participation plummeted, strike demands
reflected the new socioeconomic conditions of recessive neoliberal policies.
From 1997 on, defensive demands overwhelmingly dominated, while proactive
demands become progressively less important.
A closer look at specific strike demands, depicted in Graph 3, shows that
higher wage demands played a less important role, falling to twenty-five
percent in 1998 and twenty-eight percent in 1999. On the other hand, reactive
demands like those for contract compliance and job security became
predominant during strikes. Contract compliance demands accounted, on
average, for fifty percent of the demands in all strikes at this time. Even more
interesting is the fact that job security demands doubled from fifteen percent
in 1997 to almost thirty percent in 1999. In other words, of all the strikes
conducted in the period, thirty percent of them made demands about job
security and fifty percent also made demands related to compliance with
contracts or legal provisions. The shift from proactive demands to defensive
ones further demonstrates the effects that the new economic scene had on the
working class.
As expected, the profile of strike demands changed from being proactive to
more defensive as mobilization declined in the face of worsening economic con-
ditions. Not only did stabilization reduce inflation, but it also created the con-
ditions for fundamental changes in basic structures of the economy.
70 ILWCH, 72, Fall 2007

3. Wage, contract compliance, and job security strike demands (percentages), Brazil,
1994– 1999.

While strike scholarship has clearly established the now commonplace fact
that recession tends to reduce the predisposition of workers to strike, it is not
entirely clear that it explains the pronounced decline of labor militancy in the
Brazilian case. During the decade of the 1980s, under conditions of spiraling
inflation and periodic recession, unions were far less restrained and were
more predisposed to mobilize against employers and the government. Why
then in the 1990s, with a highly organized union movement under the CUT,
was labor less efficacious in its capacity to mobilize against the effects of neoli-
beralism and globalization? A partial explanation is offered by the recession,
but to fully understand labor’s demobilization, we must focus on how economic
stability and restructuring weakened the CUT’s union bases and its capacity to
respond to new economic challenges.
Although the Plano Real halted hyperinflation, the Brazilian economy was
already showing signs of major structural changes from the beginning of the
decade, changes which would eventually undermine the social basis of the
New Unionism. Certainly, the impact of an economy in recession, as in
the years 1997 – 1999, would partially account for the radical decline in strike
activity. But this decline began early in the 1990s, following a successful
decade of labor militancy and organizing. This article argues that economic
changes in Brazil that began with the Plano Real in 1994 contributed signifi-
cantly to the weakening of the CUT rank-and-file base and provoked serious
dilemmas for union leaders regarding how to formulate systematic and cogent
responses to the negative effects of stabilization and neoliberalism.
Looking at strike behavior in the 1980s, the data8 show that a few sectors
stand out as the pillars of labor militancy: metalworkers, especially automotive
The Era of Neoliberalism 71

and steelworkers; bank workers; and government employees like civil servants,
schoolteachers and healthcare workers. Examining the evolution of employ-
ment between 1989 and 1999, one finds that of these sectors that had been
the mainstay of CUT militancy, only government workers did not suffer signifi-
cant losses in employment in the 1990s. As the data in Graph 4 indicates, auto-
motive workers and other metalworkers, as well as bank workers, faced
significant declines in job opportunities as compared to the overall rates in
industrial employment and employment in the service sector.

Crisis in the Metal Workers Unions of Metropolitan Areas

Automotive workers in the ABC region of metropolitan Sao Paulo were the
cradle of the New Unionism in the late 1970s and a cornerstone of the CUT.
Throughout the 1980s, metalworkers demonstrated determination and comba-
tiveness by participating in the major mobilizations of the decade and providing
the CUT with the core leadership that consolidated the national labor move-
ment. Yet by 1990, employment opportunities in the sector declined. In
Phase 1, employment declined less severely from an index of ninety-five to
seventy-eight. After 1994, though, work in the sector continued to decline
throughout Phase 2. In the period between 1997 –1999, employment of automo-
tive workers had reached a historic low, losing about half of the jobs in the sector
that had existed in 1990.
Without a doubt, job loss in the sector can be attributed to technological
changes in production brought about by renewed foreign investment, as well

4. Evolution of employment in select economic sectors Brazil, 1989–1999 (base

1989 ¼ 100).
72 ILWCH, 72, Fall 2007

as the effects of the growing recession imposed by the Cardoso government in

order to guarantee currency stability and his reelection. But metalworkers’
unions faced other challenges as well.
With the Plano Real’s monetary stabilization and opening of the economy,
foreign capital again flowed to Brazil, but sought to diversify industrial invest-
ment geographically, with an eye to lowering laboring costs. Many automotive
and metalworking companies, for example, chose lower wage sites with
weaker union traditions outside the traditional industrial cities of the São
Paulo ABC, Belo Horizonte, or Rio de Janeiro metropolitan areas to build
new industrial plants and assembly units.
Consequently, cities that had been the traditional stronghold of the New
Unionism faced growing unemployment not only because of technological
changes and recession, but also due to these investments in other regions of
the country. As authorities from less industrialized cities and states used
direct fiscal incentives to attract the new industrial investments, the older indus-
trial centers began to suffer gradual processes of industrial aging and deindus-
trialization. This was the case of the automotive and metalworking centers
located in the metropolitan areas of São Paulo and Belo Horizonte.
A study of the evolution of industrial employment between large and small
cities9 points out the shift in both the number of jobs going from the larger cities
to the smaller ones and a shift in gross wages that accompanied these changes.
Graph 5 shows that in 1970, large cities accounted for 70 percent of jobs. By
1998, small cities had succeeded in attracting 52.6 percent of jobs and large
cities were left with only 47.4 percent.
Between 1991 and 1998, for example, industrial São Paulo lost 474 metal-
working firms that relocated either to the interior of the state or to other states,

5. Evolution of industrial employment between large and small cities Brazil,

1970– 1998.
The Era of Neoliberalism 73

representing a loss of over 25,000 jobs. In 1993, the metallurgical industries

employed 32.6 percent of the labor force in the city, by 1996 this had declined
to only 21 percent. The motivation was clear: While average wages in São
Paulo were around $1200 Reais, in the interior, average wages in the metallur-
gical industry were approximately $840 Reais.10
The decline of industrial employment in large cities also reflected the shift
in wages from the capital cities to the interior (Graph 6). In 1970, large cities
accounted for 82.9 percent of the wages paid in the industrial sector and the
small cities for only 17.1 percent. By 1998, there had been a noticeable
change: Large cities now accounted for 64.3 percent and small cities increased
their share to 35.7 percent, having doubled their share of wages.
The migration of both preexisting and new industries to other regions away
from the traditional industrial areas of Brazil not only created immediate pro-
blems of unemployment, deskilling, and the weakening of local unions, the
CUT was also confronted with competing union interests. Mainstay unions in
the traditional industrial regions faced capital flight, while in the “new” indus-
trial parks elsewhere, with their weaker and less experienced unions and
workers anxious for new job opportunities, local unions became strong
lobbies for local government incentives to attract new industrial investments
away from the industrially concentrated Sao Paulo-Belo Horizonte-Rio de
Janeiro triangle. This placed the CUT in a delicate position between its tradi-
tional union bases and the emerging industrial unions in the smaller interior
cities. This dilemma meant that the CUT was unable to formulate a coherent
and cogent stance with regard to these competing interests.
The flight of industrial capital from the large metropolitan areas to the sec-
ondary cities dealt a serious blow to the capacity of core metalworkers’ unions to
respond to the multiple forces that stabilization and neoliberalism had brought
upon the working class. Facing a shrinking job market and deindustrialization in

6. Participation in bulk of wages between large and small cities Brazil, 1970–1998.
74 ILWCH, 72, Fall 2007

the traditional areas of union support, the metalworkers’ unions were con-
fronted with another challenge: the privatization of the steel industry.
Steelworkers were another base of union militancy in the 1980s.
Beginning with Fernando Collor’s presidency, Brazilian elites were com-
mitted to privatizing the extensive government-owned industries and banks.
Debates within the CUT over privatization brought to a head the political
dilemma faced by progressive unionists with regard to the situation of
state-owned enterprises: On the one hand, these enterprises were economically
deficient due to excessive political patronage, mismanagement, featherbedding
practices, and a lack of market competitiveness; on the other hand, they rep-
resented a strategic sector in the national economy and secure jobs for large
numbers of workers. As the debates developed within the CUT against privati-
zation, it became clear that its leadership and political supporters, although posi-
tioned against privatization, were unprepared to offer viable alternatives to the
sale of these firms. On the other hand, local union leaders and steelworkers
largely favored privatization as the only form of correcting these distortions
and ultimately curtailing political patronage. At the auctions of steel mills,
local labor leaders and workers confronted CUT and student activists on the
streets protesting in favor of or against privatization. In the aftermath of these
confrontations, some local unions voted to leave the CUT, becoming indepen-
dent unions instead of joining the more conservative labor confederation,
Força Sindical. Between 1991 and 1997, ten Brazilian steel complexes were pri-
vatized in this manner.
The loss of the steelworkers from the CUT was another blow contributing
to the weakening of the metallurgical union base within the New Unionism.
Together with the problems of deindustrialization facing the metalworkers
unions in metropolitan areas, this severely limited this historical stronghold of
labor militancy.

The Crisis of Bank Workers’ Unions

Like the metalworkers, bank workers also faced changes that sapped the
capacity of the union leadership to mobilize: massive layoffs resulting from mon-
etary stabilization. For bank workers, the impact of monetary stabilization was
direct. Hyperinflation had made it necessary for banks to provide guaranteed
rapid banking transactions, given the high daily devaluation rates due to twenty-
percent daily inflation. Because of this, all banks, up until the 1994 Plano Real,
maintained a large contingency reserve of workers as tellers and in processing
functions to guarantee speedy transactions. For similar reasons, banks quickly
adopted computerized operations that made transactions more rapid, at the
same time that customer services remained highly labor intensive. Graph 4
shows that for the period between 1990 and 1994 (Phase 1), employment in
the banking sector tended to decline from an index of almost 100 in 1990 to
77 in 1994. Certainly, the bulk of jobs lost in this period resulted from the
growing computerization of the banking system. As depicted in Graph 7,
The Era of Neoliberalism 75

before 1994, banks had already established their bases for computerized
banking and doubled the number of ATMs installed as well as increasing auto-
mated transactions. As financial institutions automated their systems, bank
employment dropped correspondingly. Under a stabilized economy, bank auto-
mation climbed, as indicated in the number of transactions carried on via auto-
mation by expanding the ATM system and creating online home and office
banking services. This, as Graph 7 illustrates, occurred between 1994 and
1996, marking a threshold in the restructuring of the banking labor market
with the further elimination of jobs.
The drastic decline in bank employment during the 1990s, meant that
employment in 1999 was only sixty percent of what it had been in 1990.
Needless to say, the massive dismissal of employees over the decade severely
weakened unions’ capacity to mobilize workers. Unions had been slow to
realize that the computerization of the banking system during the hyperinflation
years would accelerate automation once economic stability was achieved. By the
time these effects of stabilization were recognized by the union leadership,
banks had already laid the groundwork for one of the most sophisticated
banking systems in the world, with a far smaller labor force.
In addition, unions were also confronted with the dilemmas posed by the
privatization of state-owned banks, which, like their counterparts in the steel
mills, were plagued with political patronage, corruption, featherbedding, and
deficit spending. Since state-bank employees had been the backbone of labor
militancy among the rank-and-file, bank workers’ unions were hard pressed to
maintain their influence on employees as public banks were sold to private inter-
ests and traditional labor relations in these banks changed drastically. Through
the 1990s, over ninety percent of state-owned banks were privatized, which

7. Bank employment and automatic banking trends Brazil, 1990–1999.

76 ILWCH, 72, Fall 2007

meant the loss of the state-owned banks as the base for bank workers’ union
activism. Unlike the metalworkers, state bank employees, in conjunction with
their union leaders, strongly resisted privatization, but to no avail.
A fourth factor which impacted the mobilization capacity of bank workers’
unions was the financial crises which hit a number of large national banks after
the end of hyperinflation. The failure of these important private financial insti-
tutions in conjunction with the entry into the Brazilian market of foreign
banking interests further fueled the tendency toward greater concentration in
ownership of the banking system as new foreign banks purchased both publicly
and privately owned banks. The concentration of the industry in the hands of
transnational banks strengthened bank employers in relation to the more vul-
nerable workers, often leaving union leaders in disarray and without cogent
counterproposals.
Confronted with this array of critical developments, the labor unions were
unable to formulate coherent political strategies to defend the interests of their
workers either with regard to job security or the effects of high-tech innovation.
As a consequence, bank worker leaders, though continuing to have a major role
in national and regional union politics, were less successful in mobilizing their
sector, facing defeat at the hands of both government authorities and employers.

The Case of Government Workers

Of the occupational groups with the highest propensity to strike in the 1980s,
government employees had in the 1980s the highest strike rates among
workers. In 1988 and 1989, civil servants accounted for a little less than half
of all strikes in terms of man-hours lost,11 workers mobilized and strike fre-
quency; government employees far outpaced private sector workers in strike
activities by almost fifteen times.12
In national union politics, moreover, civil-service unions acquired a more
influential position within the CUT than their numbers warranted, occupying
national and regional directorships often disproportionately to their numbers.
In 1995, of the twenty-five members of the national board of the CUT, eighteen
were representatives of public-sector unions and seven from the private sector;
and on several state boards, government union representatives held an import-
ant proportion of seats.13 Within government employee unionism, some occu-
pational groups stood out in their militancy and influence in union politics:
schoolteachers, healthcare workers, and employees in public enterprises
(bank workers, steelworkers, and petroleum workers).
Public-service workers were not immune to the effects of the post-Plano
Real currency stabilization. Bank and steel workers were severely curtailed in
their mobilization capacity due to the impact of privatization. Furthermore,
civil servants were hit very hard by the fiscal crisis of the state. As stabilization
brought a deepening of the consequences of deficit spending, authorities were
forced to limit expenditures, especially for wage increases. Since 1994, neither
the federal, state nor municipal governments were able to give wage increases.
The Era of Neoliberalism 77

Even though this caused considerable discontent among government employ-

ees, frequently available evidence of the fiscal crisis made civil servants less
predisposed to make proactive demands. In an absolute inversion of the high
strike rates of the 1980s, during the 1990s civil servants were conspicuously
absent from the strike rolls. Predominant demands among government
workers’ strikes were actions protesting the failure of either state or municipal
governments to pay their salaries or against the deterioration of working con-
ditions, especially in education and health. Only a few privileged sectors, like
the subway workers union of São Paulo, struck for better wages.
A third factor contributing to demobilization among public service workers
was the effects of decentralization of some government services like public
health, primary education, and social services. Among the main points on the
political agenda of the Cardoso presidency was the municipalization of these
three services, obliging local authorities to assume more of the direct adminis-
tration of these services, education, and public health. Social service unions
were not prepared to handle the effects of this shift in the locus of decision
making to local authorities and were faced with the difficult task of restructuring
for action on the local level. Both the logic of organization and recruitment and
the strategies of mobilization were clearly distinct depending on whether the
struggle was against a single state or federal authority or a multiplicity of
local authorities. In the 1980s, public service workers unions had been less suc-
cessful in organizing and mobilizing municipal workers as compared to state and
federal employees.14
Finally, government employee unions faced growing public disfavor,
including among private sector workers, who regarded civil servants as a privi-
leged category of workers. In 1995, a survey in São Paulo indicated that 66.4
percent of those interviewed felt that they were either very much or partially
hurt by public employee strikes. At the same time, 84.3 percent felt that employ-
ees of state enterprises were privileged workers. Even though 63.7 percent of
those interviewed felt that the real objective of civil servant strikes was poli-
tically motivated, 79.3 percent of the interviewees felt that government employ-
ees in essential services had the right to strike over economic issues but, at the
same time, 56.3 percent were against political strikes.15 Confronted with a lack
of public support, government employee unions organized protests in this
period without any significant support from rank-and-file private sector
workers either, even though civil service unions occupied a significant position
in the upper echelons of the CUT.

Alternative Forms of Working-Class Contestation

If unions failed to respond to the impact of neoliberal policies on urban workers
in part due to the erosion of their mobilization base, other segments of the
working-class population did not hesitate to collectively defend their right to
work. Alternative forms of working-class contestation emerged in the late
1990s, filling a void left by the contraction of union mobilization. Among the
78 ILWCH, 72, Fall 2007

alternative forms of contestation that appeared on the national political scene

and mobilized workers in confrontational actions that successfully challenged
government authorities, three are worth noting: the Landless Workers’
Movement (Movimento Sem Terra, MST) in the countryside; and two urban
movements: the street vendors’ movement (Movimento de Camelôs), and the
illegal van drivers’ movement (Movimento dos Perureiros).
The emergence of these forms of contestation in lieu of the traditional
labor movement reflected the demobilization of unions as workers turned to
other forms of organizing in their struggle for survival against the economic
adversities brought about by the new phase of capitalist development under
neoliberalism and globalization.

The Landless Workers’ Movement (MST)

Today, the MST represents the most articulated and extensive social move-
ment in Brazil and probably in Latin America. Although the MST had its
origins in the last years of the military dictatorship in the 1970s, it took on
new vigor with the consolidation of neoliberal restructuring of the urban
economy and the decline of urban union mobilization. As unemployment
increased in the cities, some workers with rural backgrounds were attracted
to the agrarian reform movement with the prospects of obtaining their own
small plots of farmland. The MST offered working-class and agrarian families
the opportunity to obtain reasonable economic security in agrarian settlements
by using the direct-action tactics of occupying unproductive estates and distri-
buting the lands to families that the movement organized for the land seizure.
This approach made the MST the most influential social movement on the pol-
itical scene during the 1990s. This is vividly depicted by the data on MST
protests shown in Graph 8 for the 1990 – 1993 period (Phase 1). The data
indicates, both in the number of land occupations and number of families
participating in these occupations, that the MST began to gain momentum
towards the end of the hyperinflation period in 1992 –1993. The effects of
economic instability on workers encouraged families with rural backgrounds
to return to the countryside by joining the agrarian reform movement. Even
in the critical year of 1992 when President Fernando Collor was impeached,
unlike the labor movement, the MST maintained an increased pace of
mobilization.
One detects a rise in contestation in 1993, but during 1994 and 1995, when
the economy was finally stabilized under the Plano Real, MST protests declined,
though there was an important increase in the number of families joining these
occupations. While the level of mobilization in these two years remains lower
than that reached in 1993, 1994 and 1995 represented a transition between
the years of hyperinflation and the beginning of the recession after the Plano
Real. In part, the decline of MST actions was due to the immediate positive
effects that the end of hyperinflation had on workers’ prospects for a better
life in the cities.
The Era of Neoliberalism 79

8. MST Occupations and families participating, 1990–1999.

Beginning in 1996, a year prior to the first recessive measures of the federal
government, the MST regained the momentum of 1993 with a significant
increase in land occupations and a corresponding increase in family participants.
As Graph 8 shows, 1996 marked a watershed in agrarian contestation. From this
year on, the MST progressively augmented its mobilization strength, as evi-
denced in the steadily increasing levels of occupations and family participation.
As the negative effects of stabilization on the urban and rural working classes
made themselves more evident, larger numbers of workers turned to the agrar-
ian reform movement not only as a reaction against increasing unemployment
and falling wages; but, also as a protest against the declining quality of life in
the slums and working-class neighborhoods of industrial cities.
Yet the MST’s confrontational politics were not without negative conse-
quences. During the 1990s, MST land takeovers met with repression from land-
owners, local police, and occasionally from the federal police. Under the Collor
government, the MST suffered its highest levels of imprisonment of leaders,
indicated in the data in Graph 9, when arrests were disproportionate to the
lower number of land occupations during that administration (1990 –1992).
After the impeachment of Fernando Collor, under the interim Itamar Franco
presidency (1994 – 1995) arrests of MST leaders declined significantly and
remained at the lowest level until the end of the first term of Fernando
Henrique Cardoso. During his second term, the number of arrests of MST acti-
vists again reached levels reminiscent of the Collor years. When compared to
the greatly increased number of occupations conducted by the MST from
1997 to 1999, the situation during the Cardoso administration was much less
repressive than under Collor. Overall, however, the data on land occupations,
80 ILWCH, 72, Fall 2007

9. MST Occupations and arrest, 1990–99.

family participation, and arrests conveys a clear picture of increasing levels of

MST militancy.
Because of the recession that began in 1997, resulting from the implemen-
tation of neoliberal policies, the MST increased its mobilization through a
national campaign for agrarian reform and became the predominant expression
of working-class discontent visible to the public in the cities. The MST inaugu-
rated the tactic of mass marches from agrarian settlements to urban centers
such as Brası́lia and state capitals at first as a strategy of taking rural protests
against injustices from the countryside to an urban constituency and as a way
of championing urban workers by attacking neoliberal economics. Thus,
throughout the 1990s, it was the MST that organized the only successful mass
urban demonstrations against neoliberal policies and globalization.
In 1997, this included national marches to Brası́lia, the first of which gath-
ered more than 40,000 landless protestors from across the country and served
to catalyze public support in the cities. As the 40,000 MST militants paraded
down the main avenue of the national capital in the direction of the Plaza of
the Three Branches of Government (Praça dos Três Poderes), thousands of
spectators lined the streets with baskets of foodstuffs for the hungry demon-
strators, waving Brazilian flags and banners in enthusiastic support of the
agrarian movement and against the Cardoso administration. Popular support
was evidenced in a national poll conducted at that time which indicated
that as many as eighty percent of those interviewed favored the MST goal
of agrarian reform.16
The Era of Neoliberalism 81

After the first march on Brasilia, the MST subsequently sponsored periodic
mass demonstrations in Brasilia and other cities calling for agrarian reform and
inciting urban workers to react against recessive government policies. Skillfully
avoiding any criticism of the labor movement’s paralysis, the MST played a key
role in directing rural and urban workers’ mobilization against neoliberal pol-
icies and globalization.
These marches expanded the MST mobilization repertoire, as landless
workers walking to capital cities recruited new demonstrators along the way;
and once in the cities, many unions joined the marches, enhancing this snowball
effect. In this manner, the MST combined mobilization tactics used in the coun-
tryside with mass demonstration tactics more familiar to urban workers as an
effective resource that allied rural and urban workers around agrarian reform
and against neoliberalism.
By 1999, it was evident that the MST had become a political force to be
reckoned with. In that year, the MST conducted 489 land occupations with the
participation of 71,581 families. In addition to these actions, the MST joined
forces with the CUT, the Catholic Church, and opposition leftist political
parties (Partido dos Trabalhadores, Partido Socialista Brasileiro, Partido
Democrático Trabalhista, Partido Comunista and Partido Comunista do
Brasil) in organizing a national demonstration in Brasilia against unemploy-
ment and other forms of economic and social exclusion resulting from the
Cardoso government’s policies. The March of 100,000 (Marcha dos 100 Mil)
occurred on August 26, 1999, with approximately 130,000 protesters in
Brasilia. CUT sources estimated that some 73,000 demonstrators were bused
into the national capital from around the country. State organizers in
São Paulo, Minas Gerais, Rio de Janeiro, Goias, and the Federal District
together sent 1,468 buses. In many cities, buses were provided by local muni-
cipal authorities as their contribution to the protest against the government’s
recessive policies.17
After the success of the August demonstration, the CUT attempted to
recreate the protest event in November of the same year by calling for a national
work stoppage against unemployment: The Day of National Work Stoppages
and Protest in Defense of Work (Dia Nacional de Paralização e Protesto em
Defesa do Emprego). Compared to the August action, the CUT event was by
all accounts ineffective (if not a failure) in mobilizing a significant number of
workers to strike. Even though the CUT programmed activities in each state
for the national stoppage, the very low turnout was symptomatic of its difficulties
activating worker mobilization.18
Another indicator of the underlying competition between the MST and the
CUT was the latter’s foray into the agrarian reform field. With the success of the
MST in the countryside and its more combative image, by 1998, both the CUT
and Força Sindical had begun to sponsor land invasions by unemployed urban
workers to compete with the MST in the countryside and to promote an alter-
native to unemployment. In the state of São Paulo, twenty-three of the forty-two
land occupations were led by the MST, four by the CUT, four by the
82 ILWCH, 72, Fall 2007

Confederation of Rural Workers (CONTAG, affiliated to the CUT), three by the

MAST, an agrarian reform movement supported by Força Sindical, twelve by
independent worker groups supported by local labor unions, and one by the
Catholic Church.19
Attempts by unions to settle unemployed urban workers in agriculture
show the extent to which they were hard-pressed to develop coherent and for-
ceful actions in favor of the beleaguered workers in cities, but also attests to the
success of the MST, a new form of labor organization. As neoliberalism and glo-
balization took their toll among the working class, in addition to the MST, other
workers turned to other forms of actions to secure employment and defend their
interests. Another example of alternative worker organization is the case of
informal street vendors: generally industrial workers that lost their jobs and
invested their severance benefits in purchasing expensive manufactured goods
for sale to middle class consumers.

Workers’ Contestation on the Edge: the Neo-Camelôs

In the late 1990s, with formal unemployment at about twenty percent in large
urban areas, and the average time workers remained unemployed at around
one year in São Paulo and Rio de Janeiro, unemployed workers turned to
other ways to earn a living, like street vending. In the large urban areas, a
new type of street vendor appeared and became commonplace on busy commer-
cial streets, often effectively competing with established businesses for custo-
mers. This current version of the street vendor (which I have chosen to call
the neo-camelô) represents a new and different form of what was often seen
in Brazil as marginal “penny capitalism.” The neo-camelôs were by and large
industrial workers and their dependents who, having lost their jobs as a conse-
quence of firm restructuring, used the money received from their severance
benefits as working capital for the purchase of high-quality consumer goods
for sale on the street. Unlike the traditional street vendors or “camelôs,” who
sold homemade foods, candies, trinkets, and cigarettes, the neo-camelôs invested
in small electronic appliances (telephones, radios, clocks, calculators, shavers,
etc.), computer accessories (cords, pads, screen shades, etc.), battery-operated
toys, small leather goods, small tools, clothing, and the like. These new street
“merchants,” because of their numbers, very low operational costs and their con-
centration around busy commercial streets of the downtown areas, posed
serious competition to shopkeepers, who lost a significant portion of their clien-
tele to these new lower-cost rivals.
As retail business associations and leaders of commercial workers’ unions
pressured city authorities to remove the neo-camelôs from sidewalks in front of
stores to less advantageous locations, vendors reacted in continuous confronta-
tions with authorities, tumultuous mass demonstrations, and an occasional riot
to defend their access to prime street space. Throughout 1999, the major cities
were seized by civil disorders as masses of street vendors confronted police
over the right to have access to sidewalks and to work. With hundreds of
The Era of Neoliberalism 83

arrests and the use of tear gas and riot police, these disturbances became part of
the scenario of Brazil.
Most data on social conflict in Brazil are hard to obtain. Reliable aggregate
data on the neo-camelôs and their struggles is particularly difficult to find,
because neo-camelôs are often engaged in illegal activities, because they are
not licensed by government agencies, they evade taxes, and they sell cheaper
contraband and/or falsified merchandise. In spite of this, indications of the
growing importance of this segment of the working population could be inferred
from data taken from newspaper accounts of street-vendor encounters with
authorities and reports of neo-camelôs protests.
Graph 10 illustrates the growth of the neo-camelô as an alternative form
worker of worker organization and contention. Beginning in 1996, street
vendors showed a dramatic increase in their confrontations with authorities.
More importantly, they showed the predisposition to engage in defensive collec-
tive demonstrations. This is vividly depicted in the increase in 1996 to almost 350
incidents with authorities and almost 50 collective actions, as reported O Estado
de São Paulo.
After 1996, the number of conflicts remained high, declining slightly in 1997
and 1998, only to increase again in 1999. In 2000, the number of collective
actions declined significantly, while the level of incidents with authorities
remained relatively high in comparison with the previous years.
These neo-camelôs represented a vociferous and demanding new service
sector segment of the working class. Furthermore, street vendors’ mobilizations
revealed the critical state of workers seeking gainful employment in activities
reserved for businesses. Neo-camelôs faced opposition from merchants as

10. Neo-Camelôs and reports of collective actions, 1995–2000.

84 ILWCH, 72, Fall 2007

well as from fellow commercial workers, who through their unions pressured
against the vendors. Commercial workers feared for their jobs as sales declined
in stores because of street vendors’ were selling goods at lower prices.
Furthermore, as street vendors saturated main streets, they made access to
shops difficult, often discouraging customers from shopping in the center city
and thereby inducing them to shift their purchases to rival shopping centers else-
where instead. As a result, shop workers as well as storeowners have been
adamant in demanding that city authorities remove the thousands of street
vendors.
The labor movement was once again unprepared to respond to this new
form of protest from the unemployed. The Brazilian labor movement had
only just begun to focus its organizational efforts on recruiting unemployed
workers. Traditionally, both progressive (CUT) and conservative (FS) unions
had regarded as their rank-and-file only those workers employed in the indus-
tries under their corresponding jurisdiction. Consequently, street-vendor con-
testation revealed an abyss between the organized labor movement and a
growing segment of the working class excluded from the reach of unions.
Furthermore, the CUT has traditionally been less concerned with having a
strong presence among commercial workers unions, leaving the bulk of these
unions to be recruited by the more conservative Força Sindical. This has
meant that the CUT has largely been absent among workers in growing
sectors of the economy: The customer service industries into which the street
vendors attempt to enter through their penny-capitalist strategies.
The CUT, like Força Sindical, once again found themselves caught in a
dilemma between two categories of workers, street vendors (unemployed

11. Perueiros and daily reports of collective actions, 1995 –2000.

The Era of Neoliberalism 85

industrial workers), and store workers; a contradiction which has become a

common element in the dilemmas arising from the present phase of capitalist
development. The issues raised by the unemployed neo-camelôs point to
another lacuna in the Brazilian labor movement: its traditional disregard for
urban policies, even though most of these policies affect the well-being of
the working classes. This has meant that labor was almost impotent in
interceding with local authorities, as the latter tried to deal with the social
and political effects of recession since it is in the local government sphere
that unemployed workers and their families seek welfare assistance and
look to the municipal government for redress. Consequently, one finds that
the labor movement has been unable to systematically bring to bear its
weight on local authorities as they seek solutions to the growing welfare
needs of the population. As one can see from Graph 10, as the conventional
labor movement declined in Phases 2 and 3, the neo-camelôs show a
corresponding increase in their efforts to defend their right to work, even if
only on the streets.

Workers’ Contestation on the Edge II: the Perueiros

A similar case was the situation of unemployed workers who used their sever-
ance benefits to buy passenger vans to transport paid riders, competing with a
faulty city transit system based on private bus companies. As these
“clandestine” transportation services provided by what Brazilians call perueiros
multiplied in the major cities throughout Brazil, the privately-owned bus com-
panies and bus drivers’ unions joined forces to protest against this informal com-
petition which, moreover, did not comply with city vehicle-safety regulations,
transit management guidelines, nor paid benefits and taxes. Throughout the
latter part of the 1990s, cities were periodically shaken, by bus drivers’ strikes
against local authorities’ refusal to repress the perueiros and in defense of
their jobs in light of the decline in riders on the city buses.
Additionally, as authorities moved to curtail the “illegal” activities of van
owners, these workers responded through individual and collective resistance.
In 1999 in the city of Sao Paulo alone, perueiros protested by burning fourteen
buses, sacking another seven buses, sequestering one bus, and slashing the tires
of another nine buses as they resisted arrest and the confiscation of their vans.
That year police apprehended 161 vans; and in the first two months of 2000,
police had already apprehended 1,420 vans, arresting their drivers.20
As in the case of the neo-camelôs, data on perueiro contestation is scanty.
Newspaper accounts offer the most accessible and detailed information on the
extent of this form of working-class action (Graph 11). Newspaper reports on
confrontations between perueiros and city authorities and organized collective
actions by van drivers show that the perueiro issue arose at the same time as
organized labor’s decline in militancy during 1996 and 1997 (Phase 2). After a
brief interlude of decreased confrontation in 1998, the levels of contestation
grew both individually and collectively in 1999 and 2000 (Phase 3).
86 ILWCH, 72, Fall 2007

Once again, the labor movement stood on the sidelines in dismay at the
spectacle of unemployed workers in pitched battles against police, city inspec-
tors, and bus drivers demanding the right to gainful employment. As in the
case of the street vendors, the labor movement was neither prepared to represent
the interests of the workers involved in this confrontation, nor equipped to inter-
fere in issues of urban planning, in spite of the fact that the very deficient urban
transit systems in Brazilian cities exclusively affect the Brazilian working class.
The neo-camelôs and the perueiros, along with the growing number of
worker-owned microenterprises emerging from the ranks of the once employed
workers, add yet another problem to the already multifaceted challenges of the
Brazilian labor movement: the working-class entrepreneur.

Concluding Reflections: Informal-Sector Workers and the Working Class

This article has examined some processes that contributed to the weakening of
the mobilization capacity of the labor movement and the CUT. The effects of
monetary stabilization and economic restructuring under neoliberalism and glo-
balization produced fundamental contradictions within the labor movement that
were difficult to resolve. These contradictions mainly manifested themselves in
the demobilization of those sectors of workers that had been the mainstays of
CUT militancy: metalworkers, bank employees, and civil servants. As the
effects of the Plano Real monetary stabilization, neoliberal reforms and globali-
zation negatively impacted these sectors, their unions’ ability to respond collec-
tively to these changes declined. We have outlined how economic changes in the
1990s affected each sector and how laid-off, downsized, or otherwise unem-
ployed workers turned to other forms of work and collective action in seeking
to redress their grievances and to demand their integration into the economy.
Important alternative movements were developed by the MST in the coun-
tryside, and by unemployed, urban, informal-sector workers. The latter engaged
in unregulated street vending and transit activities and faced the opposition of
business, other unions, and local authorities, as these groups attempted to rid
the city streets of informal activities. In the ensuing conflicts between informal
sector workers and municipal authorities, one can see how the contradictions
that made the labor movement less agile in representing the interests of
workers also created the conditions for the emergence of alternative forms of
worker organization and mobilization among these informal sector workers.
In examining some of these cases as alternative forms of working class con-
testation, a conceptual question becomes apparent: are these alternative forms of
contestation in fact manifestations of the working class? Some might argue that
these workers, in becoming small landowners or microentrepreneurs, have left
the ranks of the working class and became part of the “petit bourgeoisie.” Of
course, one’s response to this question depends on how one delimits the
notion of the working class and its presence in Latin-American economies.
It has been evident for decades that in Latin America, the informal sector
has been an integral component of the capitalist economy, providing at least
The Era of Neoliberalism 87

some key functions that give these economies the necessary flexibility in work
practices and labor relations within the context of economic and political depen-
dency. First, the informal sector acts as a prop to the formal sector inasmuch as it
holds in reserve those workers that have not been absorbed by formal employ-
ment, allowing these workers to undertake alternative means of making a living
in the absence of substantial state social investments in unemployment benefits.
To a very real extent, Latin-American capitalists count economically and poli-
tically on the availability of informal-sector workers in periods of economic
expansion and on the possibility of dismissed workers moving into informality
during periods of economic contraction. In this sense, the informal sector pro-
vides a buttress for dependent formal economies with weak regulatory states
and high levels of income concentration.
Third, much of the work that is accomplished in the informal sector comp-
lements the activities of many branches of the formal economy, as in the cases of
servicing and maintaining appliances, home and office repairs, and sales of small
manufactured consumer goods. In these cases, informal sector workers provide
alternative distribution channels for goods and services that would otherwise
require significant capital investments from established firms in order to
replace these informal workers. Thus, the informal sector constitutes an intricate
part of the machinery of the formal economy in Latin America, where workers
and consumers pass frequently and intentionally back and forth from one sector
to the other, making it impossible to argue that persons in one sector are
workers and those in the other are not.
This is shown by data from a 2003 Brazilian census bureau study of self-
employed workers in the informal sector.21 The survey results show that
workers are closely tied to the formal sector in that as much as forty-six
percent of the microentrepreneurs interviewed said that they entered the infor-
mal sector for lack of employment alternatives, as a form of complementing their
incomes, or as a good second job. These data illustrate the fluidity between the
formal and informal sectors from the worker’s perspective. At the same time, the
study shows that forty-nine percent of workers employed in these microenter-
prises were relatives, given that microenterprises only accounted for forty-six
percent of the total of self-employed ventures in the sector. The data illustrate
how in the lives of workers, both sectors are intertwined as people seek
gainful employment to support themselves and their families, finding work
opportunities in activities that complement the formal economy.
Conceptual approaches that describe class structures through typologies
based on work and management practices in the formal sector generally may
overlook the fact that many workers are simultaneously employed in the
formal sector, and jointly, with some relatives, engaged in informal work
activities. Classifying workers in this manner presupposes that the formal
sector constitutes a “true” working class and the informal sector worker is
some sort of provisional laborer or even a type of “petit bourgeois” or
“penny capitalist.” If one looks at income-earning work as the category relevant
in defining the working class, and not just job descriptions in the formal sector,
88 ILWCH, 72, Fall 2007

classification schemes would most likely place the informal sector activities at
the same level as those of the formal sector. Alas, in the developing countries
this would certainly make more sense inasmuch as a significant proportion of
workers are in the informal sector.
In addition, this focus on work would highlight working-class families as
important mediators of the labor force in both sectors, especially considering
that many family members acquire their first work experiences in the informal
sector. In this sense, the working-class family is not only a central unit in the
analysis of work and consequently of the constitution of class structures in
Latin America, but is also the locus where the array of working-class economic
practices are developed and learned, and where working-class culture is also
produced and reproduced.22
The complexity of the dynamics of worker participation in the formal and
informal sectors makes it clear that by focusing exclusively on work as a job
description, as well as its tasks and location in the hierarchy of control of capi-
talist firms, one loses the importance of the notion of work as a set of collective
activities directed toward making a living. In the case of the working class, we
should focus not only on the individual worker in the place of employment,
but on that set of activities that compose the working-class family’s efforts at
earning a living for the group as a unit. Furthermore, the socioeconomic
dynamics that link both sectors today in neoliberal Latin-American economies
are more complex than reflected by characterizations of individuals’ work situ-
ations based on a model of the worker-employer relationship.
Today, new models of group cooperation are appearing within the informal
sector that may gradually become models for the organization of cooperative
work in the formal economy as well as provide alternative forms of organization
for political action in defense of these workers’ rights.23 Local and national gov-
ernments in the region, in response to these pressures, have attempted to incor-
porate informal-sector activities by creating special programs that promote
these work cooperatives and facilitate their legalization through public incen-
tives, tax reforms, and loans to microenterprises. These steps bring into the dis-
cussion the need to reconceive the working class and the forms of its work and
political organizations.

NOTES

1. Salvador Sandoval, Social Change and Labor Unrest in Brazil since 1945 (Boulder, CO,
1993), 180, 189.
2. Vito Giannotti, Força Sindical: A Central Neoliberal de Medeiros a Paulinho (Rio de
Janeiro, 2002).
3. The main studies in this perspective are: Armando Boito, Jr., Polı́tica Neoliberal e
Sindicalismo no Brasil (São Paulo, 1999); Adalberto Moreira Cardoso, Sindicatos,
Trabalhadores e a Coqueluche Neoliberal: A Era Vargas Acabou? (Rio de Janeiro, 1999);
Antonio Cruz, A Janela Estilhaçada: A Crise do Discurso do Novo Sindicalimsmo (Petróplis,
2000); Wilma Mangabeira, Os Dilemas do Novo Sindicalismo: Democracia e Polı́tica em
Volta Redonda (Rio de Janeiro, 1993).
The Era of Neoliberalism 89

4. For a detailed analysis of the 1980s, see Sandoval, Social Change and Labor Unrest,
Chapter 7.
5. Departamento Inter-Sindical de Estatistica e Estudos Sócio-Economicos, Boletim
Dieese-Anexo Greves do Mês (São Paulo, 1990–1999), calculations by author.
6. The only exception was 1992, when both strikes and the average number of strikers
declined most likely since striking was replaced by the political turmoil over the crisis in the
Presidency of Fernando Collor and his eventual impeachment.
7. Departamento Inter-Sindical de Estatistica e Estudos Sócio-Economicos, Boletim
Dieese, Separata Julho: 5 Anos de Plano Real (São Paulo, 1999), Graphs 31, 11.
8. Sandoval, Labor Unrest and Social Change in Brazil Since 1945, Table 7.3, 163.
9. Cleide Silva, “Polos industriais empregam 45,9% menos,” O Estado de São Paulo,
Nov. 8, 1999, B1.
10. “Em sete anos, SP perdeu 474 empresas metalurgicas,” O Estado de São Paulo,
June 27, 1998, B4.
11. Maria Herminia Tavares de Almeida, “O Significado do Sindicalismo na Área Pública:
uma visão polı́tica” in Sindicalismo no Sétor Público Paulista (São Paulo, n.d. [c. 1994]), 94.
12. Sandoval, Labor Unrest and Social Change in Brazil Since 1945, 164– 169.
13. Arnaldo M. Nogueira, “Novo Sindicalismo no Sétor Público” in O Novo Sindicalismo
Vinte Anos Depois, ed. Iram Jacome Rodrigues (Petropolis, 1999), 59–66.
14. Sandoval, Labor Unrest and Social Change in Brazil Since 1945, 167– 169.
15. “Rebelião do Fucionalismo: Maioria condena greve no serviços essenciais” O Estado
do São Paulo, May 14, 1995, A14.
16. “Eles Chegaram Lá: O que fazer agora?” Veja 30:16, April 23, 1997, 26–36.
17. See “Protesto” section in O Estado de São Paulo, August 26, 1999, A4–A15.
18. “Protestos contra desemprego tem pouca adesão em todo o Paı́s,” O Estado de São
Paulo, November 11, 1999, B5.
19. Instituto de Terras do Estado de São Pauo, Mediação no Campo: Estratégias de Ação
em Situações de Conflito Fundário, Caderno ITESP 6 (São Paulo, 1998), 32–33.
20. “Perueiro é preso com carro de placa ‘clonada’” O Estado de São Paulo, February 4,
2000, C4.
21. Instituto Brasileiro de Geografia e Estatı́stica-IBGE e Serviço Brasileiro de Apoio a
Pequenas e Micro Empresas-SEBRAE, Economia Informal Urbana (Rio de Janeiro, 2003).
22. Brigida Gracia, Humberto Muñoz and Orlanda de Oliveira, Hogares y Trabajadores en
la Ciudad de México (México City, 1982), 179 –180.
23. Other studies that focus on these issues are: John Cross, Informal Politics: Street
Vendors and the State in Mexico City (Stanford, CA, 1998); Bryan Roberts, “The Social
Context of Citizenship in Latin America” International Journal of Urban and Regional
Research (1996); Joel Stillerman, “The Politics of Space and Culture among Santiago, Chile’s
Street Market Vendors,” Qualitative Sociology, 29:4 (December 2006): 507–530.
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