The new face of Brazilian poverty – 05/19/2023 – Market

At the beginning of this century, poverty in Brazil had a profile: we were a country where most of the vulnerable population was included in the labor market. The portrait of poverty was that of the working poor.

According to the National Household Sample Survey, in 2001, the occupancy rate of Brazilians among the 10% most vulnerable was 54%. The name of occupancy rate is given to the ratio between the working population and the economically active population.

At that time, the most vulnerable worked more than 40 hours a week, informally, in terrible working conditions, had low pay and little productivity. Probably the physical health conditions of these workers, due to the overload, were not the best.

The public policy challenge to reduce poverty was to make work decent: improve working conditions, fight informality, increase productivity and remuneration of a group of vulnerable people who were mostly inserted in the labor market.

Twenty years later, the picture of poverty in Brazil has changed. Among the poorest 10%, we went from an occupancy rate of 54% in 2001 to 29% in 2022, half of what we had 21 years ago. In other words, the poorest Brazilians are out of the job market.

The new profile of poverty is different. The portrait is of a group of people looking for work who have not been able to find a place for a few years. After years looking for work and returning home without success, the mental health conditions of this population have probably worsened.

According to the IBGE, among the poorest 10% who want to work, 64% are not fully employed. The most vulnerable want to go back to work and are not getting it.

The challenge for public policy now involves actively seeking out these people who have been excluded for some time and incorporating them back into the labor market.

Concomitant with this inclusion, public policy needs to return to the previous agenda of improving working conditions and productivity. We need to include and make the work of the poorest people dignified.

There are many untested hypotheses about the causes of the new picture of exclusion from the labor market. Increase in the reserve salary, increase in the minimum wage and technological changes are the main ones under study. All three have important advances in 2023, which is likely to accentuate the ongoing exclusion trend.

The problem needs a response the size of its severity, and the longer it goes on, the more difficult it becomes to be included in the work. According to article 6 of our Constitution, decent work is a social right as well as health, education, among others. Inclusion in work is a right and, therefore, an end in itself.

The transfer of income to the poorest in itself matters, but it is far from being enough: the poorest Brazilians not only have the right, but are saying that they want to work. We need to change this portrait.