• English
  • Português
  • Español
Crescimento com distribuição

Formal Employment


Even with the world crisis, Brazil continued to generate employment and improve worker income

Número de Empregos Formais

Formalizing labor contracts guarantees workers’ rights to millions of low-income employees

Ninety-five percent of formal jobs made available between 2000 and 2010 benefited those at the base of Brazil’s social pyramid, with compensation of up to 1.5 times the minimum wage, according to the Institute of Applied Economic Research (IPEA). This is precisely the social group that previously worked without a formal employment contract and, therefore, had no guarantee of labor rights, such as a 13 month’s wage, paid vacations, extra pay for working in unhealthy conditions, and maternal and paternal leave, among others.

This base of the pyramid is representative. We are talking about 24.5% of the wages in the country, according to 2009 data presented by research scholar Marcio Pochman in his book, New Middle Class? Work at the base of the Brazilian social pyramid (Published by Editora Boitempo). For each group of ten occupations opened up in the last decade to low-income workers, seven were in formal employment and for every vacancy in informal employment, three others were opened up for formal workers. Half of formal jobs created at the base of the pyramid are located in the Northeast, North and Center-West regions.

The boom in formal employment in the base of the pyramid helps to understand the major transformations that Brazilian society has been undergoing during the Lula and Dilma governments: social mobility and continuous reduction of income inequalities.

Stimulus for the mass consumption market and public and private investments in infrastructure projects and high-employment sectors makes all the difference

The success in stimulating the emergence of a domestic mass consumption market and investing in sectors with high employment multipliers can be seen by segments that opened up the most jobs between 2003 and 2012. In absolute terms, the first two places are trade and services, followed by transformation. In proportional terms, the civil construction industry was the sector that grew most over this period: 10.1% per year.

In the 2003-2012 period, over the course of the Lula and Dilma administrations, the construction sector grew the most total formal vacancies in proportional terms: they increased by 9.9% per year, followed by the mining industry (7.8%) and commerce (6.7% per year). In 2003 only 25.5% of workers in construction could count on a formal job contract - in 2012 the figure was 40.8%. In the trade sector, driven by income growth and consumption, formal employment went from 39.7% in 2003 to 53% in 2012, according to IBGE.

Civil construction proportionately was the sector that generated the most jobs in the last decade, driven by the My House, My Life program. Photo: Leila Mel/Araguaína city government

The construction work in the My House, My Life housing and Accelerated Growth infrastructure programs weighed in strongly by providing formal jobs throughout the entire construction chain. The My House, My Life program has already generated 1.3 million jobs in housing construction for 6 million Brazilians. In the Northeast and North, the two regions with the lowest per capita income, PAC projects such as the Transnordestina Railroad, São Francisco Project, new refineries and steel mills (NE) and the Santo Antônio and Jirau (North) hydroelectric plants have driven regional employment, growing in all regions of the country.

In 2013, the Southeast region generated 476,495 jobs (+ 2.24% in terms of formal jobs) and the South created 257,275 positions (+ 3.64%). The Northeast, in turn, saw the generation of 193,316 jobs (+ 3.02%), the Center-West contributed 127,767 (+ 4.23%); and the North another 62,318 places (+ 3.43%).

Social Security expenses under control

A ampliação dos empregos com carteira assinada fortaleceu o Regime Geral de Previdência Social (RGPS) que praticamente dobrou sua receita nos governos Dilma e Lula. Em 2012, a Previdência Social arrecadou R$ 293,3 bilhões, ante R$ 151,8 bilhões em 2002.

The strengthening of public Social Security has dethroned the myth it was going broke. And the government’s new social security and economic policy permits support of Social Security in rural regions.