Informality reached a record in 2022, shows research – 03/06/2023 – Market

Brazil reached more than 20 million employees without a formal contract, the highest number since the PNAD Contínua survey began in 2012. The number represents 18.54% of the country’s workforce, the largest share ever recorded.

The contingent of people in the informal sector increased by 15.8% compared to 2021, when there were 17.3 million workers without a formal contract, including the public and private sectors and domestic workers. The average income of the workforce in the formal and informal markets, of BRL 2,813 at the end of 2022, has not yet recovered the pre-pandemic level — BRL 2,928 in 2019, according to data released by the IBGE (Brazilian Institute of Geography and Statistics) on the last day (28).

A higher unemployment rate and the deterioration of labor market conditions are harmful not only for those who are out of work, but also for those who have some paid activity, according to research carried out at FEA (Faculty of Economics, Administration and Accounting) from USP (University of São Paulo). This impact, however, is more concentrated among the poorest 40% of the population.

Guilherme Proença, a researcher at Made (Research Center for Macroeconomics of Inequalities), compared data on monthly income per individual and unemployment per municipality available in the 2000 and 2010 Censuses.

With this, it was possible to add data on the remuneration of informal workers, since the Caged (General Register of Employed and Unemployed) and Rais (Annual List of Social Information) cover only the labor market with a formal record.

FEA professor Naercio Menezes says that the study advances by including the informal worker in the account. “After the 2015 and 2016 crisis, in the second term of Dilma Rousseff (PT), the minimum wage protected the real income of those with a formal contract. Now, we have a new angle.”

Economists claim that the precariousness of the labor market reduces the capacity to negotiate better employment conditions only for the portion of the population with lower income, due to their dependence on wages to sustain themselves.

Financial condition, gender and race are some of the factors that may be relevant when employees negotiate the contract with the employer.

The CLT (Consolidation of Labor Laws), for example, defines as “hyper-sufficient” a worker with a higher education diploma and a salary equal to twice the maximum limit of Social Security benefits — equivalent, today, to R$ 15,014.98. The law understands that this employee, by being able to protect himself, can negotiate freely with the boss the details of the employment relationship, without mediation by unions.

Proença, who is studying a master’s degree on inequality in the labor market, intends to revisit the analysis when the IBGE releases the new Census, chosen because it is the only database that indicates unemployment by city.

The new edition of the Census, initially scheduled for 2020, was postponed for two consecutive years.

The labor market has changed a lot since the period covered by the survey, in which employment had fallen from 9.6% of the economically active population to 7.3%, according to data from the World Bank. The Gini index, an indicator of social inequality, had also fallen over these ten years.

According to the same database, the country ended the 2020s with unemployment at around 13.7% of the workforce and the lowest Gini index in history, after the Covid-19 pandemic and the payment of Emergency Assistance R$ 600. From 2021 onwards, there was a recovery of jobs.

In 2021 unemployment plagued 13.9 million Brazilians, on average, a number that dropped to 10 million in 2022, according to the IBGE. “The year 2021 was one of transition, leaving the worst moment in the historical series, under the impact of the pandemic and the isolation that occurred in 2020. 2022 marks the consolidation of the recovery process”, says Adriana Beringuy, coordinator of Work and Income at the IBGE , in collective.

Between 2020 and 2021, there was a drop in average income from BRL 2,928 to BRL 2,810, which has not yet been reversed, according to Pnad Contínua.

Brazil underwent a labor reform in 2017, which created intermittent work. The work per application has also intensified. The companies claim that the service is autonomous, which has been questioned by union centrals and workers in court.

Professor of sociology of work at Unicamp (State University of Campinas) Ricardo Antunes says that this “uberized” form of work transfers risks to workers, which masks their real income. “If the delivery man’s motorcycle breaks down, he is the one who has to bear the damage. This is not well quantified by data.”

There were also changes in domestic service, which became regulated by constitutional amendment in 2013. Domestic worker Maria Francisca Fonseca, 56, from Goiânia, says that the legislation has improved her employment conditions.

She had a portfolio record since 2001, but since the beginning of the pandemic in 2020 she has been working as a day laborer and has MEI (Individual Microentrepreneur). In this condition, she is out of the formal job market, but still contributes to Social Security and can receive benefits in the event of an accident or when she reaches the conditions to retire.