Brazil Unemployment Rate Increases While Wages Fall

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – With increasing inflation and decreasing industrial production, Brazil’s government has yet another negative economic indicator to worry about: the labor market. According to the IBGE (Brazilian Institute of Geography and Statistics) Brazil’s unemployment rate increased in March, going from 5.9 percent in February to 6.2 percent last month, the highest for the month since March 2011.

In addition to the rising unemployment rate, the IBGE’s Monthly Employment Survey (PME) also showed average wages declined by 2.8 percent from February to March, the steepest monthly decline since January of 2003.

According to the government entity, however, the increase in unemployment was not a surprise. “From January to March, there is usually and upward tendency in the unemployment rate. This tendency is seen at the beginning of the year, every year,” stated Maria Lucia Vieira, manager of the National Household Survey (PNAD) during the release of the data, Wednesday (April 29th).

Among the six main metropolitan regions of Brazil surveyed by the IBGE (Rio de Janeiro, São Paulo, Belo Horizonte, Recife, Salvador and Porto Alegre), Salvador was the region with the highest unemployment rate – twelve percent. Rio de Janeiro and Belo Horizonte were the regions with the lowest unemployment rates, 4.8 percent and 4.7 percent respectively.

The number of unemployed persons in these areas total approximately 1.5 million, while the number of employed persons was estimated at 22.8 million. Unemployed persons are categorized at the IBGE as people who are actively looking for work but unable to find a job.

The survey also showed that the average monthly wages for those workers in the six metropolitan areas decreased in March to R$2,134.60 from R$2,196.76 in February. The metropolitan region of Salvador registered the highest decline in average income in March, 6.8 percent in relation to February. “In addition to (rising) inflation we see a decline in nominal wages. Workers’ wages are receiving less,” concluded Vieira.