Only Half of Formal Jobs Lost in Crisis Have Been Recovered in Recent Years in Brazil

RIO DE JANEIRO, BRAZIL – Despite the positive employment figures recorded at the end of the year, the labor market is still far from recovering the vacancies lost during the economic crisis. And even stronger economic growth in 2020 may be insufficient to recover all these jobs, according to experts.

According to data from the Ministry of the Economy’s General Registry of Employees and Unemployed (CAGED), a total of 2.87 million jobs were lost between 2015 and 2017.

With the slow upturn in activity in recent years, 1.49 million jobs were reopened in 2018 and 2019 (by November). In other words, 1.38 million new jobs would still be required in order to regain the balance of vacancies that were plagued by the crisis.

Although the CAGED registered a positive balance in 2014, for many sectors the crisis has already closed vacancies since that year.

The industrial sector was by far the hardest hit, with the loss of 1.12 million formal jobs between 2014 and 2017. In the last two years, 126,700 jobs were recovered in factories or only 11.3 percent of the total lost during the crisis.

In construction, the recession affected 991,600 jobs with signed workers’ registration book between 2014 and 2017, to only 134,400 vacancies reopened last year and this year. A recovery rate of only 13.5 percent.

The situation is different in trade and services, which experienced a retraction in the balance of workers only in 2015 and 2016, beginning the upturn earlier, as of 2017.

In the case of trade, of the 410,200 vacancies during the crisis, 227,800 have already been reopened, representing 67.7 percent of the total. In services, the 946,700 openings in the last three years were more than enough to offset the 660,500 jobs lost in the two worst years of the crisis.

For José Pastore, an economist and professor at the University of São Paulo (USP), the latest results of the generation of formal jobs were encouraging.

However, he believes that the rebuilding of the total stock of labor before the crisis will still be slow, even if Brazil grows again at an annual rate of 2.5 percent from 2020.

“The creation of almost 100,000 jobs in November has cheered the market because it was almost double what was expected, but in December there is usually a large closing of vacancies. So we should close 2018 and 2019 with a recovery rate of less than half of the jobs lost in the crisis,” he says.

The economist believes it will take approximately three years for the country to recover its 2014 labor inventory.

In addition, he points to a change in the link between GDP growth and the labor market.

“There is a structural shift in job generation, with the increase in computerization, robotization and, mainly, App work. Part of the current idleness in means of production will not be retaken by formal workers,” he concludes.

Source: InfoMoney

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