Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 04BRASILIA2751, BRAZIL: WAGES REMAIN STAGNANT EVEN WHILE

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #04BRASILIA2751.
Reference ID Created Released Classification Origin
04BRASILIA2751 2004-11-03 11:12 2011-07-11 00:00 UNCLASSIFIED Embassy Brasilia
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 BRASILIA 002751 
 
SIPDIS 
 
NSC FOR MIKE DEMPSEY 
STATE PLEASE PASS TO USTR FOR SCRONIN 
DEPT OF TREASURY FOR SSEGAL 
USDOC FOR 4332/ITA/MAC/WH/OLAC/SHIELDS 
USDOC ALSO FOR 3134/ITA/USCS/OIO/WH/RD/CREATORE 
USDA FOR FAS/ITP AND FAS/FAA/WH 
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD BR
SUBJECT: BRAZIL: WAGES REMAIN STAGNANT EVEN WHILE 
ECONOMY EXPANDS 
 
REF:  Brasilia 2447 
 
1. (SBU) Summary and Introduction.  In recent 
months, the macroeconomic picture for Brazil has 
been especially bright.  Growth has been strong, 
inflation has remained in check, exports have 
increased sharply, and the trade balance and the 
current account (both positive) have come in 
higher than expected.  This good news, however, 
masks a disturbing trend.  Per capita income 
growth for 2004 is likely to be anemic (around 
0.4 percent), and unemployment, while declining 
slightly, remains at historically high levels. 
This small increase in per capita income growth 
comes in the wake of a whopping 7.4 percent 
decrease in real wages per worker in 2003. 
Indeed, comparing 2003 figures to those in 1996, 
real wages per worker were nearly 20 percent less 
(852 Brazilian reais versus 692) and unemployment 
was more than 100 percent higher.  It appears 
that the lower middle class has borne the brunt 
of this wage and employment squeeze.  There is 
hope that improvements in these indicators during 
2004 might signal the end of this long slide, 
particularly if current economic growth is 
sustained into the medium term.  End Summary and 
Introduction. 
 
2. (U) With GDP growth predicted to come in at 
4.5 to 4.7 percent this year (as opposed to -0.2 
percent in 2003), the GOB economic team is 
receiving plaudits from both industry and the 
market for its ability to restart economic 
growth.  The country's economic expansion has 
brought advances on all fronts:  2004 exports are 
predicted to reach a record high (USD 90 billion, 
up from 73 billion the previous year), and the 
trade balance, originally forecast at USD 23 
billion for 2004, should fall somewhere between 
the USD 30 and 32 billion level.  Meanwhile, the 
current account is expected to be positive (USD 
9.5 billion) and consumer prices remain under 
control (forecast to rise 7.16 percent for 2004). 
This positive economic news has enthused market 
risk watchers.  Moody's, Standard & Poor's and 
Fitch's have all raised their rating of Brazilian 
debt, with GOB bond issues now 3 to 4 categories 
below investment grade. 
 
3. (U) Notwithstanding the GOB's achievements 
this year on the growth, trade, and inflation 
fronts, these advances come against the 
background of mid-term reductions in both real 
wages per worker and employment.  According to 
data from the Brazilian Institute for Geography 
and Statistics for calendar year 2003, compared 
to 1996 (the tail end of the Plano Real boom) 
real wages per worker declined from R$ 852 per 
month to $R 692 per month - nearly 20 percent. 
Meanwhile, unemployment, again according to IBGE 
figures, rose from 5.4 percent to 12.3 percent 
during this period (although methodological 
changes for measuring job losses put in place in 
2002 distort this comparison).  The drop in real 
wages was particularly sharp during the first 
year of the Lula government, 2002 to 2003, when 
this figure dropped a whopping 7.4 percent. 
(During this same time-frame, unemployment rose 
from 11.7 percent to 12.3 percent.)  Even with 
the economy currently in full recovery mode, post 
estimates that for 2004 real income per worker 
will likely only rise in the 0.3 to 0.4 percent 
range - hardly sufficient to make much of a dent 
in the decline over the past 8 years. 
 
4. (SBU) In a recent conversation with EconCouns, 
ECLAC economist Carlos Mussi offered an 
explanation for the drop in wages/employment 
between 1996 and 2003.  In 1996, he opined, 
though the economy's macro numbers were good, in 
reality the over-valued exchange rate meant that 
growth was unsustainable.  With the real trading 
more or less on par with the dollar Brazilian 
consumers had artificially enhanced purchasing 
power.  This fed increases in imports, which 
combined with the difficulty exporters had in 
selling their products overseas, created current 
account problems.  The GOB's response - sky-high 
interest rates - led to stagnant growth and 
higher unemployment.  The excess of number of job 
seekers allowed employers to hold the line on 
salaries, and, in some industries (such as retail 
banking) even cut pay.  Workers were hit with yet 
another body blow when consumer prices increased 
(7.7 percent in 2001, 12.5 percent in 2002, and 
9.3 percent in 2003), further eroding their 
incomes.  The good news, Mussi declared, was that 
even though workers were less well off today than 
they were in 1996, with all indicators in balance 
now at least the economy has a chance to 
experience sustainable long-term growth.  While 
the real wage and unemployment numbers were 
better in 1996, the disequilibrium in the economy 
then doomed the country to a start-stop pattern 
in terms of expansion. 
 
5. (SBU) Mussi felt that the middle-class has 
borne the brunt of the wage and employment 
squeeze, and IBGE data appear to confirm this. 
Unemployment rates remain high in the major 
metropolitan centers where the middle class is 
concentrated (for September 2004, 8.8% in Rio and 
11.7% in Sao Paulo).  While as a whole real wages 
per worker sank 7.4 percent between 2002 and 
2003, for the top half of the population wages 
declined 8 percent - as opposed to a mere 4.2 
percent for the bottom half.  Indeed, between 
2002 and 2003 workers at the bottom of the scale 
earning between one and two monthly minimum 
salaries (at that time, 240 to 480 reais) 
experienced no real wage losses at all.  Comment. 
While Mussi did not explicitly address this 
point, the rise in unemployment between 1996 and 
2003 also highlights the difficulties of small 
and medium-sized enterprises in generating job 
growth.  With middle and working-class incomes 
being squeezed, entrepreneurs with small and 
medium-sized enterprises who normally might have 
devoted their disposable funds to investment 
found that they had precious little to put back 
into the businesses.  The result:  stagnant 
growth in employment generation. 
 
6. (SBU) Comment Continued.  Nevertheless, there 
are a couple of encouraging notes in this tableau 
of statistics.  The first is that the still- 
evolving social safety net for the poor helped 
keep them from losing any ground during this 
period of sliding incomes among the middle 
classes.  The second observation, although not 
yet sustained into the longer term, is that the 
slide in real incomes looks to have halted in 
2004.  There is hope, given the more sustainable 
policy mix in 2004 vs. 1996 (i.e., floating 
exchange rate coupled with responsible fiscal and 
monetary management and healthy external 
accounts) that the Brazilian middle class will 
continue to see real income gains. Current GDP 
growth is more sustainable -- albeit at more 
moderate rates than in 2004.  Realizing that 
goal, however, will require continued GOB focus 
on the microeconomic and structural reform agenda 
necessary to increase both investment and 
productivity. 
 
Danilovich