Short history of unemployment in Brazil, from 1900 to today

The history of unemployment in Brazil is a topic that has evolved significantly over time, changing as the country's politics went through democratic and dictatorial periods. It is always important to remember that the job market in Brazil, since the beginning of the 20th century, was built on a foundation that, until 1888, was based on slavery, it is also important to emphasize that the black population was massively excluded from the job market after the abolition of slavery.

Therefore, the emergence of the job market in Brazil took place within a context of profound social inequality and the total helplessness of black people by the government.

The Brazilian job market was born, therefore, within an environment of exclusion towards a significant part of the workforce (the black population) and several public policies aimed at financing immigration (mostly Europeans).

Between 1851 and 1900, approximately 2 million immigrants entered Brazil. This number represented half of the Brazilians who were out of the job market during this period. Thus, the exclusion is evident. Brazilians themselves, especially the black population freed after the end of slavery, could have met a significant part of this demand for labor.

Here is an overview of the key periods and trends in Brazil's unemployment history:

Early Years (1900s-1950s): In the early 20th century, Brazil experienced significant economic changes, transitioning from an agrarian-based system to industrialization. Unemployment rates during this period were relatively low due to strong demand for labor in expanding industries such as mining, agriculture, and manufacturing.

Industrialization and Urbanization (1960s-1970s): The 1960s and 1970s marked a period of rapid industrialization and urbanization in Brazil. While this led to economic growth and job creation in urban areas, it also resulted in structural unemployment as traditional agricultural jobs declined. The government implemented policies promoting industrialization and infrastructure development, influencing employment patterns.

Economic Instability (1980s): The 1980s were characterized by economic instability in Brazil, marked by high inflation, debt crises, and recession. These challenges contributed to rising unemployment rates as businesses struggled, leading to layoffs and reduced hiring.

Stabilization and Reforms (1990s): In the early 1990s, Brazil implemented economic stabilization measures, including the Plano Real in 1994, which aimed to control inflation and stabilize the economy. While these reforms initially led to improvements in economic stability, they also resulted in short-term job losses and adjustments in various sectors.

Periods of Growth and Recession (2000s-2010s): Throughout the 2000s and early 2010s, Brazil experienced periods of economic growth driven by factors such as commodity exports, domestic consumption, and government policies. However, there were also periods of recession and economic slowdown, leading to fluctuations in unemployment rates.

Recent Years (2010s-2020s): In the latter part of the 2010s and into the 2020s, Brazil faced economic challenges, including political instability, fiscal deficits, and the impact of global events such as the COVID-19 pandemic. These factors contributed to fluctuations in unemployment rates, with periods of job creation followed by increases in unemployment due to economic downturns.

Throughout Brazil's history, various factors have influenced unemployment rates, including economic policies, global economic conditions, technological advancements, demographic changes, and social factors. Government interventions, such as employment programs, social welfare initiatives, and labor market regulations, have also played a role in shaping labor market dynamics and positively addressing unemployment challenges.

Unemployment in Brazil exceeds 13% after about 9 million workers had been laid off during the COVID-19 pandemic

The unemployment rate in Brazil rose to 13.3%, an increase of 1.1 percentage point (p.p.) compared to the quarter ended in March 2020. As a result, the number of unemployed workers was 12.8 million. The data are from the National Continuous Household Sample Survey (Continuous Pnad), carried out by IBGE (Brazilian Institute of Geography and Statistics).

The number of discouraged reached 5.7 million people, the largest contingent in the historical series. They are people with the potential to work, but who simply gave up looking for a formal job. The majority of them are working in informal jobs or are unoccupied.

According to the newspaper Folha de S. Paulo, "commerce was the sector most affected, with the closing of 2.1 million jobs. In civil construction, there were 1.1 million fewer. Among domestic workers, there were 1 , 3 million layoffs".

With two months of deflation and growth in the number of unemployed, Brazil under Bolsonaro`s government is heading for an economic scenario even more serious than the current one

The Broad National Consumer Price Index (IPCA), considered the official indicator of inflation in Brazil, fell 0.38% in May. This is the second consecutive decline in the index, which recorded a 0.31% decrease in April, according to the Brazilian Institute of Geography and Statistics (IBGE).

Still, according to IBGE, the services sector dropped 11.7% in April, compared to March. The results of the Monthly Service Survey, released today (17) by the IBGE, show that, in these three months of retraction, the sector accumulates a loss of 18.7%. Unemployment grew more than 10% in May alone.

According to José Paulo Kupfer, the "deflation of the IPCA in May deepens the deflation of April. Consumption of goods and, above all, services, down. Unemployment, loss of income, fear of contagion, and the 'precautionary savings', affect the activity, and keeps inflation below the floor."

Many economists are point out that with two consecutive months of deflation, the basic interest rate defined by the Brazilian Central Bank increases in real terms for the State's creditors. In this way, it ends up promoting a rent which, while benefiting a wealthy minority of the population, accelerates the country's economic recession further.

As Brazil moves quickly to scare the number of 50,000 killed by COVID-19, Brazilian companies continue to fail and breaking down and unemployment still rising. In this dramatic scenario, the Bolsonaro government meeting that went public shows only authoritarian delusions and bravado. The coronavirus crisis was not even mentioned in this meeting, which wasn't made any proposals to take Brazil out of the crisis.

Besides that, according to research conducted by the Page Group, more than 10 million Brazilians have already had reduced working hours and wages or have their contract suspended during the coronavirus pandemic. This made the country a leader in wage reduction in Latin America. In Brazil, 11.8% indicated the reduction in salary as a measure to face the crisis, while in Latin America it is adopted by 7.1%. The reduction in working hours, in turn, represents 7.8% of the responses against 4.2% in the region.

The scenario in which Brazil is heading should be marked by a deep drop in revenue, as a result of the slowdown in economic activity, high unemployment, and serious political crisis.

Informality advances in Brazil; low wages are now the norm in the country

High informality and low wages were the labor market scenario in Brazil in 2019. A survey by Pnad (National Household Sample Survey) indicated that unemployment fell, but with increasing informality and falling average incomes.

According to the Underground Economy Index, calculated by the Brazilian Institute of Economics of FGV (Fundação Getúlio Vargas), informality is still responsible for a significant portion of the Brazilian economy, having moved R$ 1.2 trillion in the 12 months between June 2018 and June 2019, equivalent to 17.3% of Brazilian GDP. This is the highest value in the last eight years. The growth in informality also increases the production of goods and services that are not declared to the government and the tax evasion of the country. In the 12 months between June 2018 to June 2019, the index advanced 0.1%.

This scenario is strengthened by the emergence of new forms of work, with applications that stimulate informality and expand the outsourcing of employment in Brazil.

According to the Institute of Applied Economic Research (Ipea), informal job vacancies are responsible for much of the small generation of jobs in recent years in Brazil. Currently, the country has over 11 million unemployed. Still, according to Ipea, these new informal jobs are behind the drop in productivity and the slow recovery of the Brazilian economy after the recession from 2014 to 2016.

Another problem produced by the high informality in Brazil is the reduction in the level of social security contributions, which worsens the country's fiscal issue. In addition, informality puts people in a situation where there is no fixed income, which limits their access to credit. In informal work, the worker also loses access to any kind of legal protection, does not receive vacation, meal vouchers or transportation allowance, benefits that formal work provides.

Currently, according to IBGE data, Brazil has 38.8 million informal workers. This total is 41% of the total employed persons in Brazil (93.8 million), that is, they represent 4 out of 10 Brazilian workers.

Inequality does not stop growing in Brazil and already reached 23.3 million people; unemployment reaches 12 million people

According to a study by FGV Social economist Marcelo Neri, Brazil faces the longest period of increasing inequality in its history. There are already 17 consecutive quarters of the increase in income concentration in the country. The survey also notes that the number of poor grew in the country and reached 23.3 million in 2017, the most recent data. These are people who live on less than 233 reais per month.

To make matters worse, more than 13 million Brazilians live in poverty or extreme poverty, according to data released this week by the Unified Registry of the Ministry of Citizenship.

Unemployment continues to erode Brazilian society. According to IBGE, 3.3 million unemployed people have been looking for work for at least 2 years in the country. This number corresponds to 26.2% of the 12.8 million Brazilians who were unemployed in the second quarter of 2019.

Meanwhile, the latest Focus Report, released by the Brazilian Central Bank, predicts that the economy will grow a meager 0.81% in 2019. A very small number in the face of rising inequality and unemployment affecting Brazilian society.

According to IBGE, unemployment in Brazil falls 0.7% in the quarter ending in June of 2019, average worker income decreased, and the number of informal workers increased

According to data from the Brazilian Institute of Geography and Statistics (IBGE), the unemployment rate in the country was 12% in the quarter ending June 2019. Now, the total number of unemployed Brazilians is 12.8 million. The index fell 0.7% compared to the quarter between January and March and fell 0.4% compared to the same period last year. On the other hand, the number of self-employed workers hit a record of the historical series, which began in 2012, and reached 24.1 million. The number rose 1.6% from the previous quarter and 5% from the same period of 2018. Therefore, informality in Brazil remains very high by world standards.

The figure released by IBGE indicates that the number of discouraged and underutilized Brazilians has been attenuating the number of unemployed, which serves to mask the reality. If we add to this group the self-employed workers and those still receiving unemployment insurance even with this small increase in the number of employees in Brazil, the scenario remains practically stagnant.

The usual average income of the Brazilian population fell in the same period, reaching R$ 2,290, 1.3% less than in the previous quarter and without significant variation with the same period last year.

In the quarter ending June, Brazil had more than 28 million unemployed people and approximately 5 million despondent people, that is, those workers who gave up looking for work and therefore left unemployment statistics.

Long-term unemployment grows in Brazil

According to data released by the Institute of Applied Economic Research (Ipea), the number of Brazilians seeking employment for more than two years rose 42.4% between the first quarter of 2015 and the same period in 2019. Since then, the number of people in these conditions has reached 3.3 million. The situation affects women and the North and Northeast regions more intensely. According to Ipea's assessment, unemployment should only begin to subside as of next year.

According to the Valor newspaper, the percentage of long-term unemployed in the country increased from 17.4% in the first quarter of 2015 to 24.8% in the same period this year, reaching a level of 3.3 million people.

According to the G1 website, the study concludes that the Brazilian labor market, therefore, remains quite deteriorated, with large numbers of unemployed, discouraged and underemployed.

Brazil: the plague of unemployment

In Brazil, the scourge of unemployment, for many people,  has been replaced by that of depression. More and more Brazilians are becoming mentally ill. Since 2017, according to WHO, Brazil has the highest rate of anxiety disorder in the world. The country also has a population depression rate among the highest five on the planet.

Atualmente, o Brasil está passando por crises de depressão e ansiedade. A população brasileira é a mais ansiosa e estressada da América Latina, segundo a Organização Mundial de Saúde. 9,3% da população brasileira sofre de transtornos de ansiedade.

In the current economic crisis that affects Brazil, this situation only worsens. Compared with the rest of the world, the Brazilian people are the ones who rely less on returning to work. According to a survey by consultancy Michael Page disclosed by the newspaper O Estado de São Paulo, 60% of Brazilians expect to return to the market in three months. This percentage is lower than Turkish, Portuguese and Italian workers, for example - the global average is 64%. As for salary increase, Brazil is also less confident: it ranked 21st among 37 countries, with 59% positive responses, and below the global average (61%).

This sentiment occurs even after the unemployment rate in Brazil fell to 12.5% in the quarter ended in April of 2019, according to data from the Brazilian Institute of Geography and Statistics (IBGE). This is a slight decrease compared to the rate of 12.7% recorded in the quarter ended in March.

The problem is that this drop is very small when we think about the universe of unemployed people in Brazil. Currently, unemployment still reaches 13.2 million people in the country. Despite the decline, the underutilized population - a group that brings together the unemployed, those who are underemployed (less than 40 hours a week worked), the discouraged (who gave up looking for work) and those who might be employed, but do not work for different reasons – reached 28.4 million, a record number of the historical series started in 2012.

Unemployment, in April, affects 13.2 million Brazilians

According to the IBGE, the number of underutilized reached a record of 28.4 million. Total of those who gave up looking for a job also set a record and reached 4.9 million.

Unemployment in Brazil was 12.5%, on average, in the quarter ended April 2019, according to data published by IBGE (Brazilian Institute of Geography and Statistics). The index rose compared to the previous quarter, from November 2018 to January 2019 (12%). However, in comparison with the same quarter of last year (12.9%), the result was low.

According to figures released by the IBGE, after 16 consecutive quarters of a fall, employment in the private sector with a backlog increased by 1.5% in the quarter ended in April 2019, compared to the same period in 2018.

With the Brazilian economy practically at a standstill, the labor market is throwing thousands of Brazilians into informality. The employed population even increased again in April, but a slice of the workers who work in the private sector with a work permit is practically stable.

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.

Brazilian government announces thousands of state layoffs

In the midst of one of the biggest crises in the history of the Brazilian labor market, the current government announced a severe cut of personnel in Brazilian state-owned companies. The measure is expected to reach more than 25,000 employees by the end of 2019, according to data from the companies and the Ministry of Economy compiled by the "G1" website.

The federal government has already approved seven programs of voluntary dismissal or incentive retirement in companies such as Correios and Embrapa. The official projection is that the downsizing will bring savings of about $ 2.3 billion annually to public coffers.

In the short term, reducing public service employment, particularly during the current time of severe financial crisis, adds workers directly to the Brazilian unemployment lists. It is a measure that reduces consumption and further affects the economy, amplifying the effects of a possible return to recession.

Currently, unemployment reaches 13.4 million Brazilians. Of these, 3 million have been for 2 years or more without formal employment.

The number of poor people in Brazil grows

According to the World Bank, the crisis that hit Brazil between 2014 and 2017 increased from 17.9% to 21% the percentage of Brazilians living with less than US$ 5.50 per day.

In addition, the poor economic performance of Brazil, Argentina, and Mexico, coupled with the very serious situation in Venezuela, led the World Bank to revise its expectation of Latin American economic growth in 2019 to 0.9%.

In Brazil, the picture of increasing misery pointed out by the World Bank is compounded by high unemployment rates.

A survey by the Center for Management and Strategic Studies (CGEE) of the Brazilian Ministry of Science, Technology, Innovation, and Communications pointed out that the number of Brazilians with unemployed PhDs reaches 25%. In the world, the unemployment rate of this group is around 2%. In Brazil, the unemployment rate among people with a master's degree reaches 35%.

In the semester closed in February 2019, unemployment in Brazil stood at 13.1%, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). With 27.9 million underutilized workers, the underutilization of the workforce has reached a record in the IBGE's history series.

Brazilian economy will only grow again in 2020, say businessmen

Brazil's business sector no longer believes that the country will grow again in 2019. According to José Carlos Martins, president of (CBIC (Brazilian Chamber of Construction Industry, in Portuguese, Câmara Brasileira da Indústria da Construção), the confrontations between the president of the Republic Jair Bolsonaro and the president of the Chamber of Deputies, Rodrigo Maia, are bad for the economy. According to Martins, "people take their foot off the accelerator, not to say they put their foot on the brake."

According to the Getúlio Vargas Foundation (FGV), the General Price Index - Market (IGP-M) increased 0.01% in January, a percentage higher than the one reached in December, when it varied -1.08%. As a result, the index accumulated a high of 6.74% in 12 months.

Meanwhile, the lack of capacity of Brazilian companies in the chemical sector, according to Fernando Figueiredo, chief executive of Abiquim (Brazilian Chemical Industry Association), stood at 23%. Simultaneously, the average idleness of Brazilian industry is 26%, according to FGV.

As the Brazilian economy continues to operate with a high level of idleness, the tendency is to maintain the high unemployment rate.

As the Brazilian economy continues to operate with a high rate of idleness, the tendency is the permanence of the high rate of unemployment in the country. Due to this environment of economic deceleration, the number of Brazilians without work reached a new record: 65 million people.

These 65 million are people of working age, but who are not working or looking for work. These are people who, after months of searching and frustration, give up looking for work.