According to an article in The Wall Street Journal, Brazil’s newly-elected president, Dilma Rousseff, has succeeded in blocking a move by Congress to raise the minimum wage. Although some low-income Brazilians may suffer, this appears to be a necessary step toward fiscal soundness because federally funded pensions are tied to the minimum wage. To our North American eyes, Brazil’s pension system seems open to abuse. A pension can even be passed on from parent to child — we have a dear friend who is a recipient of one, although she is in her 40s and is prosperous enough to have 6 household employees.
There was much speculation around the election whether Dilma would be tough enough. This is an early sign that she is.