Bolsonaro's job program echoes Lula's failed employment subsidy model

The Bolsonaro government's latest employment initiative carries an uncomfortable echo of a policy that failed spectacularly under Lula. The program, called Priore—Primeira Oportunidade e Reinserção no Emprego—was slipped into a broader provisional measure just before the Chamber of Deputies voted on it last week, buried in what lawmakers call a jabuti, or hidden rider. It aims to subsidize the hiring of young people between 18 and 29 with no formal work history, and workers over 55 who haven't held a registered job in at least a year.

Under Priore, employers receive a monthly subsidy of up to 275 reais for each worker hired, reduced contributions to the FGTS (the worker severance fund), and lighter penalties if they choose to fire these employees. The logic is straightforward: make hiring cheaper, and companies will hire more. The government needs Senate approval by September 7 for the measure to survive. But the blueprint is not new. In 2003, the Lula administration launched the National Program to Stimulate First Employment for Young People, or PNPE, which offered companies 1,200 reais annually per hire—a substantial sum when the minimum wage was around 240 reais a month. The idea was identical: subsidize the job, not the worker.

What happened to Lula's program tells a cautionary tale. In its first year, the government aimed to create 70,000 positions. It created fewer than 3,000. Of the 189 million reais budgeted, less than 1 percent was spent. Companies complained constantly about bureaucratic delays and slow reimbursements. The government eventually loosened the requirements, but nothing worked. Four years after launch, the program was quietly terminated. Officials later admitted they had misdiagnosed the problem—what young people lacked was not job opportunities but actual skills. Employers, it turned out, simply were not interested.

Rodigo Carelli, a labor prosecutor and law professor at the Federal University of Rio de Janeiro, sees the parallel clearly. "The idea is basically the same," he says. "The government subsidizes the job." But Priore faces an additional problem that Lula's program did not: it now competes with even cheaper alternatives. The same provisional measure that created Priore also approved other employment schemes offering subsidies up to 550 reais without any of the formal protections—no paid vacation, no 13th-month bonus, no social security registration. For an employer trying to minimize costs, these precarious arrangements are far more attractive than Priore's requirement for a signed employment contract.

Carelli explains the dynamic bluntly: "You don't create jobs by decree. Jobs are created by demand. If a company needs workers and finds them suitable, it will choose the cheapest option available." In a recovering economy, employers would likely fill new positions with these cheaper, unprotected contracts rather than formal Priore positions. The subsidy becomes irrelevant; the precarity becomes the point.

Labor organizations have mobilized in response. The National Association of Labor Magistrates and the National Association of Labor Prosecutors are pushing senators to block the measure, arguing it violates constitutional guarantees of equality and creates a lower tier of workers with fewer rights. Luiz Antonio Colussi, president of the magistrates' association, calls it an affront to the principle of equal treatment. The prosecutors' association warns that the measure will simply deepen inequality rather than generate genuine employment.

There is also the question of whether the government will actually fund the program. The Bolsonaro administration is already stretched thin—the economy remains sluggish, public finances are deteriorating, and the finance minister has been defending fiscal shortcuts. Funding Priore adequately would require sustained commitment and resources the government may not have or be willing to spend. The Ministry of Labor itself was recently resurrected mainly to accommodate a political ally, hardly a sign of serious institutional capacity. The Senate vote looms, but the skepticism from labor experts is already deep. History suggests it should be.