Perry Anderson in the LRB:
From the start, Lula had been committed to helping the poor. Accommodation of the rich and powerful would be necessary, but misery had to be tackled more seriously than in the past. His first attempt, a Zero Hunger scheme to assure minimum sustenance to every Brazilian, was a mismanaged fiasco. In his second year, however, consolidating various pre-existent partial schemes and expanding their coverage, he launched the programme that is now indelibly associated with him, the Bolsa Família, a monthly cash transfer to mothers in the lowest income strata, against proof that they are sending their children to school and getting their health checked. The payments are very small – currently $12 per child, or an average $35 a month. But they are made directly by the federal government, cutting out local malversation, and now reach more than 12 million households, a quarter of the population. The effective cost of the programme is a trifle. But its political impact has been huge. This is not only because it has helped, however modestly, to reduce poverty and stimulate demand in the worst afflicted regions of the country. No less important has been the symbolic message it delivers: that the state cares for the lot of every Brazilian, no matter how wretched or downtrodden, as citizens with social rights in their country. Popular identification of Lula with this change became his most unshakeable political asset.
Materially, a succession of substantial increases in the minimum wage was to be of much greater significance. These began just as the corruption scandals were breaking. In 2005, the rise was double that of the previous year in real terms. In the election year of 2006, the rise was still greater. By 2010, the cumulative increase in the rate was 50 per cent. At about $300 a month, it remains well below the earnings of virtually any worker in formal employment. But since pensions are indexed to the minimum wage, its steady increase has directly benefited at least 18 million people – the Statute of the Elderly, passed under Lula, consolidating their gains. Indirectly, too, it has encouraged workers in the informal sector not covered by the official rate, who make up the majority of the Brazilian workforce, to use the minimum as a benchmark to improve what they can get from their employers. Reinforcing these effects was the introduction early on of crédito consignado: bank loans for household purchases to those who had never before had bank accounts, with repayment automatically deducted from monthly wages or pensions. Together, conditional cash transfers, higher minimum wages and novel access to credit set off a sustained rise in popular consumption, and an expansion of the domestic market that finally, after a long drought, created more jobs.