Born in Pernambuco state to sharecropping parents, Luiz Inácio da Silva (“Lula” was a nickname that he later added to his legal name) worked as a shoe-shine boy, street vendor, and factory worker to help supplement the family income. During the recession that followed the military coup of 1964 in Brazil, he found employment with the Villares Metalworks in São Bernardo do Campo, an industrial suburb of São Paulo. At Villares he joined the Metalworkers' Union, and in 1972 he left the factory to work for the union full-time, heading its legal section until 1975 when he was elected union president. That post brought him national attention as he launched a movement for wage increases in opposition to the military regime's economic policy. The campaign was highlighted by a series of strikes from 1978 to 1980 and culminated in Lula's arrest and indictment for violations of the National Security Law. Although he was convicted and sentenced to a prison term of three and a half years, the Military Supreme Court released him the following year.
A founding member of the Workers' Party (Portuguese: Partido dos Trabalhadores), Lula first ran for political office as his party's candidate for governor of the state of São Paulo in 1982, finishing fourth. He later led national efforts in favour of direct elections for president, organizing mass demonstrations in state capitals in 1983 and 1984. Buoyed by popularity and charisma, Lula was elected to the national Chamber of Deputies in 1986 as a federal deputy from São Paulo. Lula was the Workers' Party's presidential candidate in 1989, but he lost to Fernando Collor de Mello. Lula continued as his party's presidential candidate in the elections of 1994 and 1998, both times finishing second to Fernando Henrique Cardoso. In the 2002 presidential election he adopted a more pragmatic platform; although he remained committed to encouraging grassroots participation in the political process, he also courted business leaders and promised to work with the International Monetary Fund to meet fiscal targets. Lula decisively defeated José Serra, the government-backed candidate, by winning 61.5 percent of the vote.
After taking office in January 2003, Lula sought to improve the economy, enact social reforms, and end government corruption. In 2006, as the end of his first term approached, the economy was growing, and Brazil's poverty rate had fallen significantly. However, many Brazilians felt that Lula had not done enough to improve the quality of public education or to reduce crime. Moreover, Lula's vow to fight government corruption had come into question in 2005, when members of his party were accused of bribery and illegal campaign financing. The president was not implicated, but the scandal hurt his popularity. In the first round of the 2006 presidential election, Lula failed to capture enough votes to win outright. Nevertheless, in the second round he easily defeated his opponent, Geraldo Alckmin of the Brazilian Social Democracy Party.
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