At a time of economic turmoil and austerity measures in many countries, Brazil is getting deserved recognition for its successes in lifting nearly 40 million of its citizens out of extreme poverty over the past 10 years while fostering economic expansion for the nation.

A well-attended brown bag discussion at the AFL-CIO this week provided background on Brazil’s transformation, insights about the work needed to continue improving conditions for Brazilian workers and unions and food for thought about the examples Brazil has set for the United States and the world.

For one, Brazil's recent leaders have made efforts to use industrial policy to keep decent jobs in sectors like the auto industry and bring new manufacturing jobs in the consumer electronics sector to Brazil, according to Brian Finnegan, Global Workers’ Rights coordinator for the AFL-CIO International Department and former Brazil country program director for the Solidarity Center.

Brazil has to compete in this sector against Mexico and China, which base competitiveness on low wages and the denial of labor rights. Brazil’s government has provided tax incentives to manufacturers but also set minimum levels for domestic production of components in hopes of developing these high value-added industries and jobs that can bring more people into Brazil’s growing middle class.

In contrast, China has been rocked by the revelations of severe labor rights violations at factories, including Foxconn, the producer of Apple products. Chinese labor activists and Brazilian union leaders spoke at a recent forum about labor practices at Apple and Foxconn in the two countries. (See more coverage from the Economic Policy Institute and a detailed table here.)

“Since late 2011, Apple has begun producing iPhones and iPads in Brazil,” Finnegan said. “In all these factories, the largely young and female workers are covered by collective bargaining agreements.” 

The Apple/Foxconn example speaks volumes about Brazil, where the majority of private-sector workers are covered by collective bargaining and union membership is growing. Brazil’s workers have bargained and organized politically to win consistent real wage gains and annual increases to the minimum wage.

The country’s real monthly minimum wage has climbed from $193 in 2003 to $302 in 2010, according to Jana Silverman, the new country program director of the Solidarity Center in Brazil, who co-led this week’s discussion along with Finnegan.

Brazil narrowed its huge income inequality gap and brought millions of people into the economy by expanding consumer credit, raising interest rates, increasing the minimum wage and tying it to productivity gains and creating a new Family Allowance for its poorest.

In addition, from 2003 to 2010 unemployment decreased from 12.3 percent to 6.7 percent; foreign investment increased from $10.1 billion to 48.4 billion; and inflation dropped from 9.3 percent to 5.9 percent.

The political rise of President Luiz Inacio “Lula” da Silva and the Workers Party, and the favorable economic conditions in 2003 when Lula took office, helped make this transformation possible. But it is significant that Brazil’s economy has not suffered as much as many countries since the financial crises of recent years.

Despite all of the economic reforms and wider political gains for working and poor people, challenges remain in sustaining progress and reforming Brazil’s system of unionization.

Forced labor, child labor and racial and regional inequality persist, and the country’s unionization rate has risen slowly compared with all of the other gains—from 16.7 percent in 1998 to 17.7 percent in 2009. And Brazil’s basic labor laws have been largely untouched for decades.

The main priority for the CUT, Brazil’s largest union federation, is to establish a more democratic system of union representation, Silverman said.

CUT is targeting elimination of the government-distributed ‘union tax’ as a principal source of funding for unions, as well as securing more shop floor representation of unions, which would allow for the institution of a shop steward system. 

The Solidarity Center in Brazil is working on a number of fronts, she said.

Our main work focuses on strengthening the organizing capacities of the most vulnerable workers, such as women, youth, and Afro-Brazilians, as well as using best practices in Brazil to strengthen unions in neighboring countries in sectors such as mining, agriculture, and construction.

For more about Brazil, read a column by Brazilian President Dilma Rousseff from The Economist.