Number of formal jobs falls by half in 2020 after review by Caged

After undergoing revisions, the balance of formal jobs created in Brazil, in 2020, fell by almost half compared to the number initially released by the federal government. This is what the statistics of Caged (General Register of Employed and Unemployed) indicate.

The balance measures the difference between hiring and firing in the labor market with a formal contract.

According to data released in January by the Ministry of Economy, the indicator had been positive at 142,690 jobs last year.

The number resulted from the difference between 15,166,221 admissions and 15,023,531 dismissals.

The positive data was widely celebrated by the government, as the pandemic hit economic activity in full in 2020. The point is that the difference was much thinner after the revisions, even if it remains in the positive field.

After the registration of new information, the balance of last year shrank 46.8%, to 75,883 jobs created. The result decreased due to the increase in the records of layoffs.

The number of cuts was 2.2% higher than initially released, jumping to 15,361,234. Hirings increased by 1.8% to 15,437,117.

Companies that have missed the deadline for reporting information can send the data to the government outside the period in question.

Delays are usually commonplace, but the magnitude of the revision calls attention, analyzes economist Daniel Duque, from FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation).

In 2020, a year marked by the arrival of the pandemic, companies went through a period of crisis, and the numbers may have been “understated” at first, concludes the researcher.

“Over the past year, many companies have closed, especially after the first wave of the pandemic, others have hibernated or halted operations. So, making the hiring and firing list for Caged became the last task on the list of obligations.”

In addition to the usual delay and the situation aggravated by the pandemic, there was the impact of adapting to the new Caged methodology, which came into force in 2020, says professor of economics Sergio Firpo, from Insper.

With the change, the survey also started to be fed by information from eSocial, the bookkeeping system that unified several employers’ obligations.

“Companies have adapted to the change in methodology over time,” says Firpo.

“With the revisions, the balance is closer to what would be expected. The layoffs were not greater because there were government programs to maintain jobs,” he adds.

For researcher Bruno Ottoni, from IDados consultancy, data revisions were expected due to the methodological change and the effects of the pandemic, which paralyzed company activities.

“The government has started to collect data from a new platform [eSocial], but not all companies were well informed about this issue. In addition, many have been paralyzed over the past year. So, the government couldn’t even talk to them,” he points out.

In January, when releasing data for 2020, Minister Paulo Guedes (Economy) celebrated the positive balance of more than 100,000 jobs created, even with the downturn in economic activity caused by Covid-19.

“On the one hand, emergency aid made the largest direct transfer of income. And, on the other hand, the jobs program preserved 11 million jobs,” Guedes said at the time.

Caged only provides information on the formal labor market. Therefore, it differs from the IBGE (Brazilian Institute of Geography and Statistics) unemployment survey.

The Continuous Pnad (National Continuous Household Sample Survey), carried out by the institute, assesses both the formal and informal sectors.

Throughout the pandemic, the two surveys pointed to scenarios considered opposites. While Caged showed the generation of jobs with a portfolio, Pnad indicated rising unemployment.

The difference, according to analysts, is related to the fact that informal workers were more harmed soon after the arrival of the pandemic. Freelancers without CNPJ, for example, were unable to sell products on the streets and at events due to restrictions.

In July, Guedes said that the IBGE was “in the age of the chipped stone”, in a criticism of the methodology of Pnad Contínua. Due to the restrictions in the pandemic, the institute started using telephone interviews to calculate labor market numbers.

For the Minister of Economy, data from Caged showed that Brazil was creating jobs “very quickly”. Guedes’ criticisms of IBGE were hit by analysts at the time.

In 2021, Brazil accumulates a balance of 2.5 million jobs created with a formal contract, from January to September, according to Caged.

PNAD Continuous signaled 13.2% unemployment rate in the quarter until August. The number of unemployed was estimated at 13.7 million in the country.

In the view of Bruno Ottoni, from IDados, the revisions in the 2020 Caged balance should not cause a major reversal in expectations for the growth of the formal sector in 2021 and 2022. consideration.

But, according to the analyst, IBGE statistics show that the job market as a whole still has difficulties.

In a statement, the Ministry of Labor and Welfare, recreated in July, attributes the fall in the balance of jobs at Caged, in 2020, to the revisions caused by declarations made by companies after the deadline.

“We emphasize that, even with the aforementioned review, the balance of the 2020 Caged remains positive, despite the worst moment of the Covid-19 pandemic”, points out the folder.

According to specialists, the methodological change in Caged, in 2020, makes comparison with previous years unfeasible.

“Data entry after the deadline happens when companies declare the admission and dismissal information after the competence in which the movement took place”, reports the Ministry of Labor and Welfare.

“The possibility of making this type of declaration already existed in the old Caged, with a slightly greater occurrence at this time due to the transition process to the declaration via eSocial, which occurred for a significant number of companies throughout 2021”, he adds.

The folder also states that the announced data “are real and comply with the information declared by the companies, and may be adjusted for 2020 until the end of 2021”.

In the view of specialists, the accumulated balance this year tends to undergo a lower revision than in 2020. In addition to the smaller impact of the pandemic on business routine, companies would be more used to declarations via eSocial.

“I imagine that, if there is a review in 2021, it will be much smaller than in 2020”, projects Sergio Firpo, from Insper.