Brazil General Strike, Demonstrations Disrupt Transportation -- 2nd Update

By Jeffrey T. Lewis and Luciana Magalhaes Features Dow Jones Newswires

SÃO PAULO -- A general strike in Brazil, called to protest proposed labor and pension changes, disrupted public transportation around the country Friday, and some analysts say it could force the government to weaken the proposed reforms.

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In São Paulo, the country's financial capital and industrial hub, many bus, metro and train lines weren't operating Friday morning, and major roads and arteries were blocked by protesters, according to city authorities.

In Brasília, the capital, access to the city's international airport was also blocked by protesters, television images showed. Local news media reported public transportation systems were affected in cities across Brazil, from Florianopolis in the south to Fortaleza in the northeast.

Protesters are trying to stop President Michel Temer from cutting back the generous pension system and from reducing some worker protections. Mr. Temer says both changes are needed to reignite the economy.

Mr. Temer said in a statement Friday evening that his government will continue to work to "modernize" Brazil's national legislation, with ample discussion of the proposed changes in Congress, adding that his administration is doing all it can to spur economic growth.

Over the past two years, Brazil has suffered through its worst economic recession on record, which has slashed tax revenue and made the proposed changes even more urgent, some economists say.

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The pension proposal, which is in a committee in the lower house of Congress, would close loopholes that for decades have allowed Brazilians to retire in their mid-50s with pensions as high as their latest salary. That situation has led to social-security costs eating up about half of the nation's budget.

Mr. Temer already faces resistance in Congress to the unpopular pension overhaul, and Friday's strike could make its passage even more difficult while forcing the administration to scale back an already watered-down proposal,

"I never thought the government would be able to approve the kind of reform [Mr. Temer] really wanted, but the question now is just how many more concessions he'll have to make" to get the proposal through Congress, said Carlos Melo, a political-science professor at the Insper business school in São Paulo.

Mr. Melo said it is difficult to say how many people stayed home Friday because they support the strike and how many either simply had no way to get to work or decided to avoid the added hassles.

Daniel Cruz da Silva, a 25-year-old who works in an office near São Paulo's emblematic Paulista Avenue, said he stayed home because his 11-mile trip to work was impossible due to the transportation "chaos." Mr. da Silva, who said he supports the strike because workers need to protect themselves, nevertheless criticized unions for looking out more for their own interests than for union members'.

The labor law proposal, which Wednesday was approved in the lower house of Brazil's Congress and will now move to the Senate, would overhaul some of the country's 1940s-era labor code.

Included in the bill are proposals designed to reduce or scrap mandatory union dues, make it harder for workers to sue their employers, and expand the scope for flexible work arrangements and temporary employment contracts.

The strike was called by some of Brazil's largest unions. Many businesses, banks and schools closed, and the Força Sindical union said factories have also shut down. The strike is necessary to force the government to negotiate changes to workers' rights and to the pension system, said Paulo Pereira da Silva, president of Força Sindical.

"Brazil showed today its unhappiness with the reforms," Mr. da Silva said. "If there's no dialogue with the government, there will be more stoppages."

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@wsj.com

(END) Dow Jones Newswires

April 28, 2017 18:41 ET (22:41 GMT)