had died in October 1975. But in January 1976 there was another death at Codi in São Paulo, of Manuel Fiel Filho, a worker. Geisel saw this as a challenge to his authority over the army, as well as undermining his strategy of political relaxation by fueling more disgust throughout the country. He dismissed the commander of the Second Army, General Ednardo d'Ávila Melo. Later, he fired the army minister, Silvio Frota, and the head of his own military cabinet, Hugo de Abreu, for standing in the way of the strategy. The election in 1976 of a new U.S. president, Jimmy Carter, was not irrelevant. Carter was talking the language of human rights, and South American dictatorships were losing favor in Washington.
Just as there were political frictions within the military regimes, so there were economic divergences. Again it was not easy to generalize, and the economic partisans did not match the different political factions. The issues were various. There were those who were concerned to control inflation, a bugbear of the professional middle class since the 1940s. There were those who were keen to see more international investment in Brazil and an opening up of the economy, which still had high protectionist tariffs. There were those who still saw a strong case for state leadership in the economy—a continuance of the Vargas approach to nationalization and the Kubitschek emphasis on development.
The military regimes relied heavily on economic technocrats, and these debates were often a continuation of those that had taken place prior to 1964. But there were differences. Whereas there had been a strong push from the leftist parties before 1964 on income inequality, land reform, and unemployment, these matters received less attention under the military; income inequality increased dramatically. Also, by the late 1970s the import substitution model for Brazil, which had led to the local manufacture of cars and other goods that had formerly been imported, was losing its power as an engine to drive the economy.
The impact of the 1973 Yom Kippur war, and its resulting oil shock, was delayed for Brazil. But by 1975, the year when Lula assumed the presidency of his union, the Geisel government was forced to react. Reis Velloso, the planning minister, prepared a second national development plan, to cover the five-year period through 1979. It aimed to reduce the nation's dependence on imported energy and promoted a national program to produce sugar-based ethanol to substitute for gasoline in vehicles; it led to a deal with West Germany, criticized by the United States, to build nuclear power stations; and it paid for two massive hydroelectric projects at Itaipú, on the Paraguay border, and Tucurui, in Amazonia. These and other infrastructure investments, for instance in steel capacity, were largely funded by foreign loans to state or parastatal agencies.
Although Brazil's economy had raced ahead in the “miracle” years and was still growing, at a more reasonable pace, under Geisel, the reality for workers was that most were suffering from a wage freeze. The pressure was intolerable at a time of so-called boom, when government propaganda was telling everyone how great it was to be Brazilian. The official minimum salary (salàrio mínimo, set by a law going back to Vargas) was not keeping pace with the cost to buy the minimum food ration, which had been laid down in 1938. Whereas in 1970 it would have taken 105 hours and 13 minutes per month to earn enough to buy basic nutrition for one adult, by 1974 the time taken was 163 hours and 32 minutes.17
Also increasing visibly, even though statistical evidence was unreliable for people living in poverty and on the margins of the cash economy, was social inequality. The newsmagazine IstoÉ estimated in 1979 that 50 percent of the poorest Brazilians had had 14.91 percent of the gross national product in 1970, but only 11.6 percent in 1976; the 20 percent who were richest had enjoyed 62.24 percent in 1970, and 67.0 percent in 1976. A very unequal society was getting more so.18
It was against this difficult and complex background that Lula began work as a union president. Vidal had achieved something significant in running a first congress of the metalworkers of São Bernardo in 1974. This had opened up discussion of wages and the hiring and firing practices of engineering firms. Several agents of the dictatorship, thinly disguised as factory workers, had managed to get into the meeting. In all, around 250 had attended.
Lula, now the president, made a practice of visiting factory gates and engaging in discussion with the workers. He also shared decision making with members of the union executive, thereby limiting Vidal's influence. He made alliances with a number of leaders of other unions, such as Olivio Dutra of the bank workers of Porto Alegre, and Jacó Bittar of the petroleum workers of Campinas—both of whom helped establish the PT in the 1980s. Together these and others who were to create what was called the “new unionism” liaised to obtain more autonomy for the workers. In theory interunion cooperation was illegal, and the corporatist labor laws that the dictatorship had inherited from the Vargas era were still in place.
But by 1976 Lula and his union were in a position to begin flexing their muscles. Union representatives were recruiting more members. In a salary campaign that year, São Bernardo appealed to the labor court, the Tribunal Superior de Trabalho, to prevent a deal agreed on by the employers, the Federaçao dos Metalúrgicos de São Paulo, from being extended to all engineering workers. Much to the irritation of the employers, the court accepted at least part of the union's case—limiting the deal to unorganized workers, guaranteeing that young men called up to do military service would get their jobs back, and providing more security for pregnant women. When Lula held a second union congress (attended by the governor of São Paulo, 250 workers, and more police and army spies), militants spoke out against the lack of freedom.
Lula, who discovered that he was rather good with people and in the rough-and-tumble of union politics, also managed to cut Vidal down to size. Toward the end of 1976, the Ford motor company decided to reduce its medical services for staff. Lula told a journalist that he would not hold meetings inside the factory, in case management tried to influence the workforce to accept its plans. Vidal told another journalist exactly the opposite. This conflict became public, and Lula got the executive to approve a new rule—that only he, or in his absence the vice president, was entitled to speak on behalf of the union. Vidal, as secretary, lost his standing.
Lula took trouble to maintain contact with his members, not only by meeting them at the factory gate. He also gave a lift to the union's newsletter, Tribúna Metalúrgica, by encouraging a cartoon figure, Joao Ferrador. This Bolshy worker caught the fancy of members, and his sly and illhumored comments on life and the workplace made trade unionists see their organization as more human, down-to-earth, and sympathetic.
In 1977, Lula, who was still fixated on the rights and incomes of workers and not much interested in national politics, found a cause that energized him. It enabled him to mobilize support not only among the metalworkers, but more widely across the union movement. It made him a national figure.
An economics professor, Eduardo Matarazzo Suplicy, wrote an analysis of a World Bank study in the economics section of the Folha de São Paulo that showed that the military government had been manipulating Brazil's inflation figures. The Fundaçao Getúlio Vargas (FGV), a semiofficial institution, had defined the rate of inflation in 1973 as having been 22.5 percent, but the military government had announced that it was 12.6 percent. The issue was serious, because the salàrio mínimo—the official minimum wage—was adjusted once a year on the basis of the FGV index; with strikes prohibited by the military, the labor court (Justiça do Trabalho) simply passed on the inflation increase to all workers. Lula commissioned a study that showed that, with the passage of more than three years, the cumulative loss as a result amounted to 34.1 percent of the value of the minimum salary.19
Lula decided to fight, but was initially cautious as to the means. More than forty thousand workers signed a petition for the reinstatement of the lost earnings; crowded meetings were held in factories and the industrial areas, and thirteen unions were drawn into the campaign. The sense of grievance gained momentum. President Geisel refused to see the union leaders, but four of his key ministers—finance, planning, industry and commerce, and labor—spent three and half fruitless hours in discussion with them.
When
