Raise the retirement age? In Brazil, that’s starting to sound all right.

Amanda Perobelli/Reuters
A demonstrator protests against proposed pension reforms in São Paulo July 10, 2019. This week, Brazil's lower house of Congress approved a bill that would raise minimum retirement ages and reduce benefits for some workers.
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This May, at a rally for new President Jair Bolsonaro, thousands of Brazilians erupted into a jubilant chant.

The reason? He mentioned pension reform.

Why We Wrote This

It’s no mystery why pension reform is a political taboo: Workers feel their sacrifice more keenly than the broader benefits. So why are so many Brazilians suddenly backing it – at a time of bitter polarization, no less?

For decades, Brazil’s leaders met resistance each time they tried to propose changing the retirement system, which sees many workers retire in their mid-50s – and eats up about half the federal budget today. But this week, amid surging popular support, a reform proposal passed a key vote in Congress. It could become law as soon as this fall.

To many Brazilians, reform has finally become an economic necessity, as the country struggles to emerge from recession. But what makes its newfound popularity all the more surprising is the country’s deeply etched divisions, especially deep polarization over the far-right president. Many Brazilians view the reforms in terms of fairness, leveling a playing field between the generously compensated public sector and the private.

“It’s an amazing number,” says Sérgio Praça, a political scientist in Rio de Janeiro, referring to the 51% of Brazilians who now support reform. “I don’t remember the last time half of Brazilian citizens agreed on anything.”

Rogerio Bruno has been working for 33 years: in finance, at a telephone company, and then running his own kiosk, selling anything from magazines to gum to plastic toys. Now, if Brazil moves forward with a proposed overhaul of its pension system, he’ll likely have to work a decade longer than he planned.

But still, he embraces the reform. “I know it’s necessary – and most Brazilians know it too,” he says as he hands change back to a customer at his Rio de Janeiro shop. With Brazil’s rising life expectancy and sluggish economy, he doesn’t see another way forward, even if the changes hit people like him the hardest. “It won’t be easy, but it’s something that must be done.” 

With immediate sacrifices – and benefits that take years to materialize – social security reform can be a third rail almost anywhere. Ambitious plans for a social security overhaul have repeatedly spurred massive protests in France, and Argentina passed reforms in 2017 amid violent protests. Last fall, thousands of Russians demonstrated against plans to raise the retirement age. 

Why We Wrote This

It’s no mystery why pension reform is a political taboo: Workers feel their sacrifice more keenly than the broader benefits. So why are so many Brazilians suddenly backing it – at a time of bitter polarization, no less?

Until recently, Brazil was no exception. Just two years ago, proposed reforms drew thousands of protesters into the streets, fiercely rejecting attempts to change a system that sees many workers retire in their mid-50s – and eats up about half the federal budget. 

Now, popular support for the changes is surging. At a rally in May for new, far-right President Jair Bolsonaro, thousands of demonstrators erupted into a jubilant chant at the mention of the reform, which some see as an attempt to make the system more fair. Many others, like Mr. Bruno, have quietly accepted it may be a necessity, if Brazil stands a chance at clawing its way out of an economic slump. And the country’s deep political polarization may actually be helping unify support for the once-taboo topic.

This week, a reform bill cleared a final vote in the lower house of Congress with an overwhelming majority and moved forward for debate in the Senate, where it could be approved as a constitutional amendment as early as September. Some 51% of Brazilians support pension reform, according to a July survey by Datafolha, a leading pollster – the first time a majority has approved. In 2017, 71% were against it

“It’s an amazing number – I don’t remember the last time half of Brazilian citizens agreed on anything,” says Sérgio Praça, a political scientist at Getúlio Vargas Foundation, a think tank in Rio de Janeiro. “We’re in a very polarized time in Brazil. But it seems that, around this point, we’re less divided.”

Tough sell

Brazil’s government has been trying to reform the social security system for years, but bitter opposition and a slew of scandals repeatedly halted previous efforts.

Former President Michel Temer placed pension reform at the center of his broader efforts at a fiscal cleanup, but corruption charges derailed his agenda. His predecessor, leftist President Dilma Rousseff, was impeached before she could bring a proposal forward. 

In the past, representatives on both the left and the right risked paying a hefty political price for backing reform. Many lawmakers who threw support behind this week’s bill “would have voted against it in a Rousseff administration,” says Pedro Fernando Nery, an economist, legislative adviser, and co-author of an influential book on the pension system. “This has been a very unpopular issue for a long time, like in the rest of the world.”

Adriano Machado/Reuters
Members of Brazil's Congress and supporters of the pension reform bill celebrate its passage during a first round of votes in the Chamber of Deputies in Brasilia on July 10, 2019. This week, the bill cleared a second vote, meaning it can proceed to the Senate.

The current proposal would increase contribution requirements, remove some perks for federal workers, and raise the minimum age for retirement to 62 for women and 65 for men. 

With rising public support for reform, many representatives were emboldened to vote for the bill without fear, Mr. Praça notes.

“They know that a lot of the public wants this reform to be passed,” he says. “There’s surprisingly a lot of political gain in approving this.” 

Political polarization

While many of President Bolsonaro’s most enthusiastic supporters credit him with the bill, the president – who opposed pension reform in the past – is not spearheading the legislation. Polls show about a third of Brazilians fervently support Mr. Bolsonaro but another third strongly disapprove, making it difficult to forge political alliances and build momentum around his agenda.

The traditional left, meanwhile, was weakened in the last election as Brazilians voiced their frustration with Ms. Rousseff’s Workers’ Party (PT), which many now associate with corruption and mismanagement.

This fragmentation created a political vacuum, allowing a coalition of center-right lawmakers to take the reins on the reform and move it forward, according to Geraldo Tadeu Monteiro, coordinator of the faculty of law at the State University of Rio de Janeiro. Their role, in turn, has helped make the proposal palatable to moderate Brazilians who reject their controversial president.

Mr. Bruno, for one, isn’t a fan. “Bolsonaro is not responsible for any of [the reform],” he says. But he likes the market-friendly economy minister, Paulo Guedes, whom he sees as leading the charge.

Under the PT, pension reform was seen as less pressing, and plans avoided hurting the country’s most vulnerable workers. Now, as Brazil’s debt has ballooned and its fiscal health has deteriorated, a fresh sense of urgency has set it. The reform was initially expected to save the government more than 1.2 trillion reais ($300 billion) over 10 years, although this projection was lowered to about 900 billion reais ($226 billion) after parts of the bill were watered down.

Many hope it will encourage investment in the country, which is still struggling with unemployment above 12% and sluggish growth following a 2015-16 recession.

Fighting privilege

For many Brazilians, including Liliane Vidal, pension reform is fundamentally about fairness. The retired bank manager believes the reform will help even out the playing field by removing perks for well-paid public sector workers, many of whom can retire in their early 50s.

“The main goal of the pension reform is to fight privilege,” says the Rio de Janeiro native and Bolsonaro supporter. “There’s a huge gap right now between normal workers and public functionaries.”

Pension reform wasn’t always viewed here as a way to fight inequality. But with the help of a massive media campaign, former President Temer reframed the reform as a way to close loopholes, rather than as an attack on normal working people.

Yet the legislation may not necessarily deliver. After much debate, state and municipal workers were exempted from the reform, although the Senate could still reconsider. Sectors backed by powerful lobbies, including police and teachers, also negotiated better deals. The military is being considered in a separate bill, which some expect to fade into the background. 

As a result, the reforms are likely to hit middle-class workers the hardest, according to Mr. Nery, rather than truly eliminating privileges for the few.

The reform also doesn’t reflect the vast discrepancies across Brazil in how long people work and live. In the northern state of Roraima, the average worker is 64.8 years old when they retire, data from the Brazilian Social Security Institute shows. In the wealthier southern state of Santa Catarina, the average retirement age is just 57.2 years.

“Brazil is a very unequal country,” says Mr. Monteiro. “And those differences are not contemplated in the pension system reform.”

Leandro Sadapaz, a cleaner from the populous Duque de Caxias suburb, says the reform carries little hope of solving Brazil’s problems.

“If the reform was for everyone, it would be a great thing,” he says. “But it’s not. It’s only for the poor, for the working class. Those with privileges will stay privileged.”

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