Crisis: Brazil closes more than one million formal jobs in April and March 2020, according to Caged

Information released today by the New General Register of Employed and Unemployed (Caged), of the Minsitério do Trabalho do Brasil, points to a drastic drop in the number of hires in the country was the main responsible for the negative balance of formal jobs in the first four months of 2020 in Brazil. 1,1 million formal jobs were closed in Brazil in March and April 2020, according to figures from the General Register of Jobs and Unemployed (Caged) released today by the Ministry of Economy.

In April of 2019, Caged had a positive balance of 129,601 formal jobs, resulting from 1,374,628 admissions and 1,245,071 dismissals. In the same month in 2020, there were 598,596 hires and the number of dismissals reached 1,459,099, generating a negative result of 860,503 vacancies closed.

According to the newspaper O Globo, this result is, "by far, the worst data for job creation in Brazil since 1992, when the Caged historical series began. Before, the worst data had been recorded in 1992, when the country closed 142 thousand jobs in those two months".

These frightening figures show the impact of the pandemic, the current and profound national political crisis, and the complete lack of direction of the federal government, which has been going for two weeks without a Health Minister in the midst of a health crisis without precedent. Thus, the Brazilian labor market suffers one of the strongest strokes in the country's history.

Level of construction jobs in Brazil was practically stagnant in the first four months of 2019

The civil construction sector in Brazil generated 20 thousand jobs in the first four months of 2019. Data compiled by the FGV and the Civil Construction Industry Union based on Caged, the number of people employed in the civil construction sector in the period increased by 0,88% compared to the same period in 2018. The employers' union saw growth well below the expected resumption. The projection for GDP expansion in construction fell from 2.0% in early 2019 to 0.5% now.

However, if seasonal effects are disregarded, employment in the Brazilian construction industry would have registered growth of 0.08% in April (+1 954 jobs). At the end of this month, the sector employed 2,314,065 workers in Brazil. With this growth of only 0.08%, it seems that the country is far from the resumption of economic growth predicted by many analysts in early 2019.

As I have written here, this error is the result of the bet and support that many economic agents gave the Bolsonaro government. "In early 2019 financial institutions, according to this same bulletin Focus, forecasted a 2.6% growth in the Brazilian economy this year. However, this bet on the world of finance was mistakenly based on a very positive judgment of Jair Bolsonaro's ability to lead the country's economy".

Number of formal jobs increases in April in Brazil

According to the General Register of Employed and Unemployed (Caged), the Brazilian labor market has created 129,600 formal jobs and has the best April of the last 6 years. However, before April 2019, unemployment has increased in Brazil and vacancies, when they arise, are mostly for informal, precarious and low-wage occupations.

With more than 66,000 hirings, the services sector was the main driver of this performance in April.

Caged is not research on the job market. It is a record that companies are required to provide every month to the Ministry of Economy. The numbers sent to the government, therefore, contain the total number of hirings and dismissals of Brazilian companies.

However, hiring wages for April 2019 were lower than the salaries paid to those hired in April 2018.

The industry with the greatest difficulty in recovering is the industry, where jobs with better salaries are placed. So far the current government has not presented any measure aimed at job creation. The only government agenda so far has been the Pension Reform.