Formal employment data in 2021 also show underreporting of layoffs

The formal job market has created fewer vacancies than originally disclosed by the Jair Bolsonaro government in each month of 2021.

From January to October, the updated result of the Caged (General Register of Employed and Unemployed) points to 166 thousand fewer jobs created than previously registered.

The numbers presented this Tuesday (30) by the Ministry of Labor and Social Security had already shown a reversal in the balance of jobs in 2020, which went from a net balance of 75 thousand jobs created to 191 thousand jobs cut — putting an end to the speech government that there was growth even in the midst of the pandemic.

In the case of 2021, the adjustments made so far do not change the sign of the balance and, therefore, the country continues to create vacancies. But the update points to a monthly average of 18,500 fewer vacancies than originally released.

The numbers can still undergo further adjustments.

Bruno Dalcolmo, Executive Secretary for Labor and Social Security, stated that the adjustments have been made due to the incorporation of data delivered by companies after the deadline.

The update is traditional in Caged even before the Bolsonaro government, but it was intensified both by the companies’ difficulty in adapting to a change in methodology and by the difficulties imposed by the pandemic.

At the beginning of 2020, the government started to consider in the Caged data the numbers of the eSocial (Digital Bookkeeping System for Tax, Social Security and Labor Obligations) — by which companies must provide information to the government.

The adaptation process made companies report more data after the deadline, which the folder said it was trying to compensate using numbers from other sources.

“You have micro and small companies entering eSocial, which are not used to it, so it is natural that there is an adaptation process,” said Dalcolmo.

Despite the change of sign —from positive to negative— in 2020, the executive secretary argues that the changes are negligible compared to the volume of data.

Adjustments to Caged are recurrent and occur every month even before the methodology is changed. But in 2020 and 2021 there has been an inverse phenomenon to that observed before.

In 2017, 2018 and 2019, adjustments to the numbers improved the data. Now, updates make them worse.

The differences between the originally released numbers and the adjusted ones are generated by discrepancies in both admissions and dismissals, but the difference is greater in the latter case in 2021.

In admissions, the average monthly underreporting has been 5.5% in 2021. In dismissals, 7.7%.

Economist Daniel Duque, from FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation), stated that the discrepancy in the information occurred both because of the implementation of the new Caged methodology and because of the pandemic.

“That [mudança metodológica e pandemia] creates the perfect scenario to have underreporting of layoffs when you close your business. I don’t think the government is to blame, but the euphoria that was propagated turned out to be inconsistent with the reality of the labor market,” he said.

For Duque, the difference between the data from Caged and the IBGE (Brazilian Institute of Geography and Statistics) —which pointed to greater difficulties in the labor market—has now been clarified. “This riddle is finally explained,” he said.

In November 2020, faced with questions about the numbers, the technicians already stated that there was a difficulty in adapting companies to the new methodology.

“We see a change in the behavior of companies in this period due to the transition of systems, which results in companies communicating after the deadline more frequently,” stated Mariana Eugênio, general coordinator at the then Secretariat of Labor at the time.

But the view was that the differences were being corrected with other data sources, such as unemployment insurance.

“There is a pre-pandemic moment where we already observed, in the transition to the new Caged, that there was a delay in communication. This was resolved based on unemployment insurance data and, post-pandemic, Caged remains open to receive this information,” said Luís Felipe Batista de Oliveira at the time, an advisor to the then Secretariat of Labor.

In July 2021, given information on the level of unemployment in the country indicated by the IBGE, Minister Paulo Guedes (Economics) even said that the institute was “in the age of the chipped stone”, in a criticism of the methodology of the Pnad Contínua.

For the Minister of Economy, data from Caged showed that Brazil was creating jobs “very quickly”.