November 9, 2021

09:11

Marcela Leiros – from Cenarium Magazine

MANAUS – Informality or “freelance” among the Occupied Population (OP) in Brazil have grown vertiginously in the last two years, a portrait of an economic crisis instigated by the Covid-19 pandemic. Between the second quarter of 2019 and the second quarter of this year, the number of Brazilians working without a signed employment contract increased by more than 2 million. The loss of jobs and the high inflation – forecasted to rise from 9.17% to 9.33% in 2021 – lead the population to seek alternatives to align financial gains with the rising prices of basic products for survival.

By definition of the Brazilian Institute of Geography and Statistics (IBGE), a person is “employed” when he or she is engaged in a professional activity (formal or informal, paid or unpaid) for at least one full hour, in the reference week of the survey. The “informal” workers, on the other hand, are those who work without any ties registered in their work card or equivalent documentation. Currently, in Brazil, this group amounts to more than 25 million people or 28.3% of the employed.

Despite deprived of benefits such as fixed pay and paid vacation, many workers have chosen to become “informal” in search of better financial conditions and the possibility of keeping their own work schedule. This was the decision made by the day laborer Aguileia Augusta de Souza, who worked for two and a half years with a signed contract at a car dealership in Manaus. Before, the gross salary was R$ 1,100. Today, working at least four days a week, she earns between R$1,600 and R$1,800 monthly.

“I used to earn very little and it didn’t even cover my expenses. I have a son with Attention Deficit Hyperactivity Disorder (ADHD) who needs regular medical attention. Now I can pay my bills and food on time”, says Aguileia, emphasizing that “informality is paying more than formality.

As for the benefits lost in informality, such as the contribution to the National Institute of Social Security (INSS) and future retirement for length of service, Aguileia explains that she is already trying to register as an optional taxpayer.

Precarization

The increase in informality worries specialists due to the relationship with the precariousness of labor relations. The automation of processes and services, the economic situation, and the Covid-19 pandemic all contribute to the increase in unemployment and, consequently, the rise in informality and underemployment.

“It is natural to understand that the urgency in the search for income often leads to accepting any working conditions, especially working informally”, points out economist and vice president of the Federal Council of Economics (Cofecon), Denise Kassama.

“Domestic employees and freelancers often even prefer informality in order not to have their wages discounted. In a horizon where the creation of formal jobs does not grow in the same proportion as the increase in the economically active population, the tendency will be the increase of these informal relationships, where the worker often needs to work longer hours to guarantee a minimum necessary income”, he adds.

Unemployment

On October 27th this year, the Continuous National Household Sample Survey (PNADC) corresponding to August revealed that unemployment reached 13.2% in the mobile quarter ended that month (against 13.4% in the mobile quarter ended in July).

According to IDados, the result can be seen as positive, since it was below the median expectation of analysts (13.5%) and the projections of the consulting company itself (13.4%). The data from PNADC was also positive for the participation rate, which has been registering continuous increase since the second quarter of this year, and reached the level of 58.6% in the quarter ended in August.

This level, however, is still well below that observed in the pre-pandemic (61.7%, in the quarter ending in January 2020). The PNADC figures also revealed a strong growth of 4.0% in the Occupied Population (OP), in the change in the mobile quarter ended August compared to the mobile quarter ended in May.

For the year 2022, IDados reiterates “a picture of high uncertainties both in the inflationary field and in the political-electoral framework”, which may lead to a higher level of interest rates and a reduction in the level of activity and employment, compromising the recovery path of the labor market.