A policy aimed at stimulating settlement of the interior results in slowing urbanization. Brazil's cities are already exploding, surrounded by sprawling favelas (slums) which house millions. The middle class grows rapidly and becomes increasingly politically active. Social and environmental groups proliferate, as do independent labor movements.
Social indicators such as access to basic services improve, even as the minimum wage loses value as a result of inflation. Unemployment rises, and the government cuts down on social spending. New legislation in 1988 focuses on increasing health services and public expenditure on education in the context of public-sector decentralization. Quantity and quality of services varies across regions.
Poverty is widespread, and income inequality reaches one of the highest levels among urban industrial societies. Almost a third of the employed population earns minimum wage or less, while almost half of the economically active population is employed in the informal sector, without job security or benefits. Brazil's rural interior remains desperately poor, and peasant protests are common.
President Cardoso focuses on better management of public health programs and improved quality of education. The Real Plan brings a rise in overall income, but fails to bring with it a significant reduction in unemployment or poverty levels. Frustration with reforms contributes to Lula's resounding election victory and animates his platform of social justice and food security.
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