Average income reaches its lowest level in almost 10 years, says IBGE

The average income from work fell again in Brazil and reached the lowest value for the third quarter in the historical series of the IBGE (Brazilian Institute of Geography and Statistics). The records of the Pnad Contínua (Continuous National Household Sample Survey) began in 2012.

In the third quarter, the usual real income of the employed was estimated at R$ 2,459, according to data released on Tuesday (30) by the institute. In relation to the third quarter of last year (R$ 2,766), the drop was 11.1%, the biggest in the series.

Before this Tuesday’s release, the lowest value for the period from July to September had been registered in 2012. At the time, the income was R$2,462.

The indentation coincides with the return of informal workers to the market, points out the IBGE. This portion usually has a lower income, which helps to push the average to a lower level.

In the initial phase of the pandemic, informal people were hit hard by restrictions on economic and social activities. Now, with the advance of vaccination against Covid-19 and the reduction of measures to help the economy, they are back on the market.

The rise in inflation also weighs on the fall in average income. This is because IBGE takes into account the behavior of prices when calculating the indicator in the country.

In the analysis of all four standard calendar quarters, the lowest mark in the series was registered between January and March 2012. At the time, the value reached R$2,438, slightly lower than the most recent data.

“The level of occupation has been increasing through the greater insertion of informal workers in the market, with lower incomes. This causes the average to fall. In addition, we have an ongoing inflationary issue”, explained the IBGE work and income coordinator , Adriana Beringuy.

In the third quarter of 2021, the population occupied with some type of work was estimated at 93 million people in Brazil. The contingent represents an increase of 4% (3.6 million more) compared to the immediately previous quarter and an increase of 11.4% (9.5 million more) compared to the same quarter of 2020.

This movement helped to reduce the unemployment rate, to 12.6%.

According to the IBGE, of the 3.6 million more people in the employed population, compared to the second quarter of this year, around 54% (1.9 million) worked without a formal contract or CNPJ. In other words, informality accounted for more than half of the new vacancies.

“With the economic recovery and the end of emergency aid, this growth is expected [dos informais]. In general, they are people with less education and more difficulty in accessing the formal market,” says Sergio Firpo, professor of economics at Insper.

According to the IBGE, the informality rate reached 40.6% of the employed population in the third quarter. There are 37.7 million workers without a formal contract or CNPJ.

The highest rate was registered in the third quarter of 2019: 40.9%. With the pandemic, the indicator dropped to 36.5% in the second quarter of 2020.

The return of informal workers to the market takes place at a time when workers’ pockets are impacted by the rise of the IPCA (Broad National Consumer Price Index), the country’s official inflation indicator.​

In the 12-month period up to October, the most recent period with available data, the index rose by 10.67%. It is the biggest increase accumulated since January 2016 (10.71%).