New age
Through successful redistributive policies, Brazil's president Lula may have created a rod for his own back, argues Andreza Aruska de Souza Santos
In 2013, I was conducting my PhD fieldwork in Brazil when I interviewed the head of the geography department at a top-tier university. At the end of the interview, she asked me how to obtain a scholarship because she was trying to start a PhD abroad. My head spun: the head of the department only had a master’s degree.
This was the peak of a period of rapid university expansion. New faculty positions and student places were quickly filled. The link between being well educated and being well off weakened surprisingly quickly. For the previous generation, a university degree was not only incredibly rare but also a passport to a better future. Today, education is still a necessary condition for prosperity, but it is no longer sufficient. Brazilians from different social classes increasingly invest in appearance, branded goods, gyms, social media visibility, and online betting platforms in pursuit of prosperity and status, often confusing consumption with investment. Without a clear pathway to prosperity, debt-financed consumption has become part of a cycle of aspiration and frustration. Debt, alongside unfulfilled professional aspirations, frequently results in political disillusionment, apathy, or radicalisation. In a society marked by deep-seated inequalities and intense social media connectivity, the experience of economic gains and losses is far removed from what macroeconomic indicators alone may express.
This is the social backdrop against which Luiz Inácio Lula da Silva approaches the end of his third presidential term.
During Lula’s first two terms, and particularly during Dilma Rousseff’s first mandate, investment in education expanded significantly. The promise was clear: higher education would provide access to better employment and consolidate the emergence of a new middle class. Universities expanded into the interior of the country, educational credit programmes widened access to private higher education, conditional cash transfer programmes reduced extreme poverty, and initiatives targeting child labour increased school attendance. Public sector hiring and wages also expanded during this period.
Brazil thrived in an environment of near full employment and robust economic growth. For a brief moment, the country appeared less like “the country of the future “and more like the country of the present. The 2000s became synonymous with social mobility.
Yet social mobility also produced inflationary pressures, particularly in housing. Much of Brazil’s economic expansion between 2002 and 2012 was financed by the global commodities boom. Rising prices for soy, iron ore and oil increased export revenues, strengthened the Brazilian real and boosted domestic consumption. A strong currency enabled Brazilians to travel abroad and purchase imported goods at unprecedented rates. Simultaneously, low unemployment and rising incomes fuelled a dramatic increase in real estate prices. A three-bedroom flat in a central area of Brasília that cost 300,000 reais in 2003 could frequently fetch 1mjust a few years later.
Salaries, however, did not rise at the same pace. This disconnect meant that urban expansion accelerated as middle-class families moved further from city centres in search of affordable housing. Gated residential developments emerged in peripheral areas that often lacked basic infrastructure such as asphalted roads, postal delivery, sanitation, reliable internet and telephone signal. Families could afford smartphones for the first time while simultaneously finding themselves spending five hours a day commuting without good internet signal because of congestion in Brazil’s major cities.
The contradictions of the country’s growth model became increasingly visible. The protests of 2013 symbolised the exhaustion of that cycle. What began as demonstrations against public transport fare increases rapidly evolved into a broader expression of dissatisfaction with declining purchasing power, deteriorating public services and rising living costs. Transportation became the perfect symbol of the Brazilian dilemma: increased access to housing that was further away. The quality of life acquired in the early 2000s was already in decline in the 2010s.
At the same time, the end of the commodities Supercycle weakened the Brazilian real and reduced household purchasing power. Brazilians who had become accustomed to international travel, imported goods and expanding consumption now experienced stagnation and decline. Prices and expectations did not fall back.
The political consequences were severe. The 2013 protests, caused in part by fake news disseminated across social media, contributed to the erosion of Dilma Rousseff’s government, culminating in her impeachment in 2016. Distrust in political institutions and frustration with economic decline helped propel Jair Bolsonaro to power in 2018 as voters searched for rupture and renewal. Bolsonaro ultimately failed to deliver economic stability or institutional cohesion. Brazil also endured one of the world’s worst Covid-19 fatality rates, due in large part to government failures, resulting in a prolonged school closures and deep political polarisation.
When Lula returned to office in 2023, Brazilians were not only voting against Bolsonaro or for Lula; many were also voting for the memory of the early 2000s (see recent research by Laura Carvalho and Guilherme Klein Martins). The aspirations of Brazilians have not necessarily adapted to the structural transformations of the economy – a mismatch with profound political consequences. The dream of secure employment, homeownership, healthcare, leisure time and upward mobility remains as universal in Brazil as elsewhere. What has changed, however, are the economic conditions through which these aspirations can realistically be achieved.
The global and domestic economic context had funda-mentally shifted. Food prices have surged globally, and the conditions that sustained Brazil’s earlier consumption boom no longer exist. As a result, Lula cannot reproduce the material experience of prosperity that defined his earlier administrations.
The labour market itself has also changed profoundly. A university degree, although necessary, is not sufficient to achieve stable employment, and new generations do not enjoy the same opportunities as their parents. Employment itself increasingly fails to provide social protection. Brazil has witnessed the rapid expansion of “PJtização”, the widespread practice of hiring one-person companies instead of a worker, thus exempting employers from labour obligations such as paid leave, pensions and social security contributions.
Work that is not employment, and incomes that no longer provide a pathway to a better life, have reshaped how Brazilians perceive the state. Historically, the Brazilian left linked the legitimacy of the state to labour protections: paid holidays, limits on working hours, weekly rest and collective bargaining rights. In a country marked by a long history of slavery and inequality, labour regulation became central to citizenship itself. Citizenship was therefore understood through a labour badge, a stable salary, formal employment and legal protections guaran-teed by the state.
One of the clearest expressions of the Workers’ party (PT) project was the formalisation of domestic labour. Under PT governments, domestic workers gained expanded labour protections, including regulated working hours, overtime pay, pensions and social security rights. In political and symbolic terms, this mattered enormously. In a society historically shaped by racial hierarchy and servitude, bringing domestic workers into the framework of formal labour law represented a form of democratic inclusion.
Yet the contemporary labour market has moved in a different direction. Many domestic workers now prefer to work independently across several households rather than remaining tied to a single employer through a formal contract. Through Instagram and WhatsApp, some advertise services directly, build personal brands, attract clients and negotiate their own schedules and rates. Earning bythe hour across multiple homes can generate substantially higher incomes than traditional registered employment. In this context, the language of the traditional left – labour protections, unionisation, formal contracts and social security contributions – increasingly feels distant from the economic logic through which many Brazilians now navigate daily life.
Today, many workers view taxation and regulation not as protections but as obstacles to survival. Rather than relying on public healthcare or education, many aspire to earn enough to purchase these services privately. The left call them precarious workers; the right call them entrepreneurs. This is not just language. It represents a trans-formation that flies in the face of a left long centred on unions, taxation, and redistribution. Significant numbers of Brazilians have even migrated to neighbouring Paraguay in search of lower taxes and lower living costs. Lula’s government has attempted to respond to these pressures. Its proposed tax reforms aim to exempt lower-income Brazilians from income tax while increasing taxation on higher earners and dividends. Yet progressive tax reform remains difficult in a country where wealthier individuals possess multiple mechanisms for tax avoidance. Brazil’s congress, which is controlled by opposition parties, wants fiscal austerity and reduced public spending, which risks undermining the redistributive programmes historically associated with the Workers ‘party: public healthcare, education and cash transfer schemes.
One of Lula’s emblematic policies is the end of ‘6×1’(six working days and one day of rest), a working routine that is for obvious reasons heavy on the body. However essential, giving workers two days of paid rest flies in the face of the uberization of the economy and a liberal and right-wing congress that tends to favour the interests of companies.
The central question, then, is not whether Brazil implemented redistribution under Lula. It clearly did. Social programmes expanded access to education, reduced extreme poverty, widened racial and gender inclusion, and increased consumption capacity among lower-income Brazilians. The more difficult question is how these achievements were and are experienced in everyday life. For many Brazilians, home ownership in central urban areas has become unattainable. Cars and fuel are increasingly expensive. Around 78 per cent of Brazilian households are currently indebted. In such conditions, it becomes difficult for families to look at incumbent governments with optimism or enthusiasm, regardless of broader macroeconomic indicators.
Lula succeeded in improving Brazilian society. What remains uncertain is whether Brazil’s economic structure can sustain the expectations those improvements created.
