{"id":90145,"date":"2024-07-22T14:40:46","date_gmt":"2024-07-22T17:40:46","guid":{"rendered":"https:\/\/murray.adv.br\/?p=90145"},"modified":"2024-07-22T14:40:48","modified_gmt":"2024-07-22T17:40:48","slug":"tight-job-market-hides-high-informality","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/tight-job-market-hides-high-informality\/","title":{"rendered":"Tight job market hides high informality"},"content":{"rendered":"\n
Formal employment drives up employment rate; informal jobs continue to expand, with 40% of the total<\/strong><\/em><\/h6>\n\n\n\n

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07\/22\/2024 <\/p>\n\n\n\n

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\"Lucas<\/figure>\n<\/div>\n\n\n

Lucas Assis \u2014 Foto: Claudio Belli\/Valor<\/em><\/p>\n\n\n\n

The Brazilian job market has shown a clear trajectory of expansion in the last two years, after the pandemic crisis hit the market, which had not yet recovered from the 2015-2016 recession. Month after month, new records are seen in the number of formally employed workers and the mass of income, among other indicators. Other components are returning to levels not seen for a decade, such as the number of unemployed workers, that were not seen for a decade, such as the number of unemployed workers, which is below 8 million for the first time since 2015. However, the country\u2019s positive employment figures still include a high level of informality.<\/p>\n\n\n\n

Nearly 40% of employed Brazilian workers are in the informal sector. This share has reduced recently but, as the total number of unregistered jobs grows along with formal work, the volume of people in informal work positions continues to expand.<\/p>\n\n\n\n

Over the more than eight years of the Continuous National Household Sample Survey (PNAD Cont\u00ednua<\/strong>) informality rate series\u2014an indicator measured since the fourth quarter of 2015\u2014, only in four moving quarters the share of informal workers remained below 38%. The highest number ever was 41%, indicating a 4.5 percentage point range between the minimum (36.5%) and the maximum.<\/p>\n\n\n\n

All quarters measured below 38% were in 2020, the first year of the pandemic, when informal workers were expelled from the job market due to social distancing measures. The share of formal workers among employed people increased but that happened through the composition effect.<\/p>\n\n\n\n

\u201cThe informality of a relevant part of jobs is a characteristic of the Brazilian job market and represents an important source of inequality,\u201d said Lucas Assis<\/strong>, the economist at Tend\u00eancias Consultoria<\/strong> in charge of monitoring the job market. \u201cAs a result, there is a large number of workers with no access to social benefits, such as social security and paid leave, including maternity leave or sick pay,\u201d he said.<\/p>\n\n\n\n

The informal segment has a less stable employment relationship and does not include labor rights\u2014such as sick pay and retirement\u2014and historically offers lower compensation. Reducing informality and increasing the level of formalization of the job market is part of the United Nations Sustainable Development Goals (SDGs), under the eighth topic, \u201cEconomic Growth and Decent Workdecent work.\u201d The informality rate is used as a reference for monitoring this SDG.<\/p>\n\n\n\n

While Brazil is below the world average (58%) and at the average of the least developed countries (89.1%), it is well above the level seen in European and North American countries, of 11.4%, according to 2023 data from the UN Statistics Division. More than 2 billion people are currently working in informal jobs worldwide.<\/p>\n\n\n\n

In Brazil, the PNAD Cont\u00ednua indicated 39.13 million informal workers in the quarter ended in May, which is the most recent data. When measuring the informal segment, the Brazilian Institute of Geography and Statistics (IBGE) includes private sector employees without an employment registration book, domestic workers with no registration, employers and self-employed workers with no corporate taxpayer ID number, and contributing family workers receiving no compensation.<\/p>\n\n\n\n

Adriana Beringuy, IBGE\u2019s coordinator of household sample surveys, emphasizes the high share of informality in the Brazilian job market, despite the role of the formal sector in recent growth.<\/p>\n\n\n\n

\u201cThe increase in the number of employed workers driven by formal workers doesn\u2019t mean the number of informal workers has been falling. It has only been losing share but remains a very important line of the employed population,\u201d Mr. Assis said, about the new PNAD Cont\u00ednua. \u201cThe increase of the employed population is happening through the formal employment but also the informal employment.\u201d<\/p>\n\n\n\n

Liana Carleial, economics professor at the Federal University of Paran\u00e1 (UFPR), says the informality rate is now just a reference, as the poor conditions of the market as a whole are bringing workers in the formal sector closer to those holding informal jobs.<\/p>\n\n\n\n

\u201cThe informal category is now just a reference; it means nothing else than that. Formal workers work 12 hours and in poor conditions. It makes more sense to talk about having or not social rights,\u201d the professor argues when considering what makes the two categories of workers different from each other.<\/p>\n\n\n\n

Among informal workers, one group deserves attention: the 25.5 million self-employed people, or 25.1% of the 101.3 million employed people. Ms. Carleial criticizes the increase in entrepreneurship, which she says acts to hide the low share of salaried workers in Brazil. \u201cLess than 50% of workers are salaried. There is a large number of self-employed workers, representing 25% of all employed workers,\u201d she said.<\/p>\n\n\n\n

Ms. Carleial cites France as a successful story of job market conditions. She notes that 87.3% of workers there are salaried, of whom more than 70% have indefinite-term contracts.<\/p>\n\n\n\n

\u201cWe can see Brazil\u2019s situation is poor in different ways. In France, nearly 90% of workers are salaried, which is a successful story. It is a solid, salaried society. That\u2019s not our case,\u201d she noted.<\/p>\n\n\n\n

One of the differences between formal and informal workers is income. It tends to be the highest among formal workers. Lucas Assis says the transition from informal to formal employment increases the probability of improving income from work, both in absolute and relative terms.<\/p>\n\n\n\n

However, the economist points out that income gains with formalization do not benefit all workers equally. \u201cThe shift to formal employment has greater potential for improving income from work for the richest,\u201d he noted.<\/p>\n\n\n\n

Like other indicators in the country, the informality rate presents inequalities, with worse rates for the poorest. Lucas Assis highlights differences by region, level of education, color, or race. Informality predominates in the North and Northeast regions, decreases according to the level of education, and varies according to color or race, whether men or women.<\/p>\n\n\n\n

In the first quarter of 2024, when the informality rate in Brazil was 38.9%, this share was 70.9% among workers with no education and 63.2% among those with incomplete primary education. At the other end, the rate was 19.1% for those with a higher education degree and 29.8% for those with incomplete higher education.<\/p>\n\n\n\n

In the analysis by color or race, the share of informal workers was 33.6% for white employed workers, below 41% for Black people, and 43.5% for mixed-race people. Regional data also show inequalities and range between 30.5% in the South and 52% in the North region. The other rates are 51.3% in the Northeast; 34.1% in the Southeast; and 34.6% in the Central-West.<\/p>\n\n\n\n

\u201cThe Brazilian productive structure still has elements and labor relations typical of underdeveloped economies, such as the large number of workers in domestic services, mostly women,\u201d Mr. Assis said. \u201cThe construction segment, also characterized by low income and high informality, predominantly employs men.\u201d<\/p>\n\n\n\n

*Por Lucianne Carneiro\u00a0\u2014 Rio de Janeiro<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Formal employment drives up employment rate; informal jobs continue to expand, with 40% of the total 07\/22\/2024 Lucas Assis \u2014 Foto: Claudio Belli\/Valor The Brazilian job market has shown a clear trajectory of expansion in the last two years, after the pandemic crisis hit the market, which had not yet recovered from the 2015-2016 recession. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25312,10089],"class_list":["post-90145","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-high-informality","tag-job-market"],"yoast_head":"\nTight job market hides high informality - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/tight-job-market-hides-high-informality\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Tight job market hides high informality - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Formal employment drives up employment rate; informal jobs continue to expand, with 40% of the total 07\/22\/2024 Lucas Assis \u2014 Foto: Claudio Belli\/Valor The Brazilian job market has shown a clear trajectory of expansion in the last two years, after the pandemic crisis hit the market, which had not yet recovered from the 2015-2016 recession. 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