Labor: Fall in unemployment should lose pace – 01/19/2023 – Market

A significant slowdown in economic growth should occur in Brazil this year, which should lead to a loss of momentum in the fall in unemployment, points out a report published by the ILO (International Labor Organization).

After a relatively strong performance in the first half of 2022, GDP (Gross Domestic Product) slowed with weakening commodity prices and deteriorating global financial conditions.

The analysis is part of the annual report “Social and Employment Perspectives in the World – Trends 2023”.

The expectation is that the unemployment rate will be around 9% in 2023. In 2021, the average unemployment rate was 13.2%, according to the Pnad (National Household Sample Survey) Continuous, from the IBGE (Institute Brazilian Institute of Geography and Statistics), and 13.8% in 2020.

With uncertainties regarding inflation, which scares the consumer and persists since the pandemic, growth should start to slow down in countries in 2023.

The most recent Boletim Focus, from the Central Bank, indicated a lower forecast for this year’s GDP, of growth of 0.77% (compared to 0.78% in the previous week). For 2024, the perspective is for growth of 1.5%.

The ILO also points out that the creation of formal jobs has recovered in Latin America, but that real wage gains for workers have stalled.

“Already in June 2022, in countries in the region (such as Argentina, Brazil, Colombia, Mexico, Paraguay and Uruguay) formal employment was higher than in June 2020 [nos primeiros meses da pandemia no país].”

In the last two years, the increase in work with a formal contract was particularly strong in Brazil, 8%, points out the entity. “Throughout 2022, however, real gains stalled, given the horizon of uncertainty. Companies opted to adjust their workforce, increasing the number of hours, instead of hiring more.”

The ILO projects that employment will increase by just 1% this year, compared to 2022. The number of people without a job in the world is expected to be 208.2 million in 2023 – last year, it was 205.2 million.

For women and younger workers, the effects of the pandemic on the job market have been heavier. Globally, the participation rate of women in the labor market was 47.4% in 2022, compared to 72.3% for men – this means that for every economically inactive man, there are two women in this situation.

Young people (aged 15 to 24) face an unemployment rate three times that of the adult population. In addition, 23.5% of young people do not study, do not work and are not in training (neither-nor).

Experts have also drawn attention to the drop in average wages for workers after the pandemic – people are managing to return to the market, but earning less.

The organization also pointed out a total of 2 billion informal workers in the world last year, 214 million workers in extreme poverty (counting on less than US$ 1.90 or R$ 9.65 per person per day) and only 47% of the population has some type of social coverage.

The director general of the ILO, Gilbert Houngbo, also points out that by the end of 2022, the recovery of countries after the Covid-19 pandemic was still incomplete and that several of them also continued to be affected by the war in Ukraine.

“Advances in the labor market are still too slow, insufficient to fill the gaps left by the pandemic. Difficulty in accessing quality jobs, insufficient wages and inequality are some of the main challenges”, he adds.

According to the director, the ILO will promote a campaign for the creation of a global coalition to promote social justice and create policies that prepare for the future of work.