The fall in the occupation of Brazilians who are among the poorest 10% indicates a change in the face of poverty in the country in the last 20 years and an additional challenge for the president-elect, Luiz Inácio Lula da Silva (PT).
In addition to increasing income transfers, the new government will need to discuss productive inclusion policies focused on a portion of the population that is increasingly excluded from the labor market, possibly because of low qualifications.
In 2001, 48% of the poorest had some form of work, albeit informal — which guaranteed them some type of income supplementing social benefits. In 2021, that percentage dropped to 18%.
In the same period, income from government transfers increased from R$31 to R$84 per person. Income from work also rose on average per employed worker, but fell from R$103 to R$57 when comparing the value per adult – precisely because there are a greater number of people without a job. The values are already updated for inflation.
The data were gathered by economist Laura Muller Machado, former secretary of Social Development of the Government of São Paulo and specialist in the area. According to her, there is a group of Brazilians “completely excluded” from the job market.
“The GDP [Produto Interno Bruto] It is rising. For now, we are proceeding without them. You need to include these people. They have the right to decent work. There’s a train that left, reactivated after the pandemic, and the last wagon was stopped. You have to couple this last car with the moving train”, says the researcher.
According to her, in the early 2000s, the poorest workers worked in appalling conditions, often with excessive working hours, without 13th salary, without FGTS (Guarantee Fund for Length of Service) and with low wages.
“So the problem was that the poorest were in informality, without any social protection. The solution was to improve working conditions and increase protection”, he says. “What’s the change now? The poorest left the job market, the most vulnerable half. So in addition to taking care of informality, they need to go back to work.”
The downward trend in the participation of the poorest in the market has been continuous since 2001, but has gained strength in the recent period, in the wake of the economic crisis and the Covid-19 pandemic.
In 2014, the income from work of the poorest 10% had reached R$164 per adult, but fell to R$57 in 2021 – a drop of 65.2% in the period, precisely because of the drop in the number of employed persons. This portion of the population was the most affected by the economic crisis.
The pandemic factor is evident in another comparison. In 2001, the level of occupation (which measures the total number of people working in relation to the population of working age) was 55.6% among people aged between 25 and 65. In 2019, the percentage was at 33% — a drop of 12.6 percentage points over a period of nearly two decades.
In 2021, after the crisis that imposed measures of social isolation and compromised the chance of work for the vulnerable, the employment level of the poorest 10% dropped to 22.7%, without any signs of recovery.
Low qualification can help explain this picture. A significant portion of the poorest 10% did not even complete elementary school, which compromises their employability.
As the minimum wage went through a period of appreciation (today it is at R$1,212), employers do not want to pay this floor to a professional with lower productivity in the performance of their functions – which can push them out of the market. “This worker is not super-productive, he becomes expensive since the minimum wage has gone up”, evaluates the researcher.
Another hypothesis is a cultural shift in demand for lower value-added services. Machado cites as an example the lower propensity of Brazilians today to have a domestic worker hired, working five or six days a week. There is a migration to informal modalities, such as hiring per day, accentuated by the pandemic.
A third possibility is the increase in the reserve wage, an economic concept that represents the minimum for which the worker accepts to give up idleness and accept a job. This increase in the reserve salary could be related to the expansion of income transfers.
All hypotheses, however, still depend on a more robust confirmation from new research, emphasizes the researcher.
Furthermore, the most recent data show that there has actually been a drop in income from transfers to the base of the pyramid. The average value per person went from R$112 in 2014 to R$84, considering the poorest 10%.
This picture may seem counterintuitive, given that the amount spent on emergency aid and Auxílio Brasil (which replaced the Bolsa Família program) reached record levels. Last year, the Jair Bolsonaro (PL) government spent more than BRL 400 billion between 2020 and 2021 with the two types of benefit.
According to Machado, the worsening in the focus of benefits may explain this worsening. That is, the money was distributed, but not to those who need it most.
“As a result, from 2014 to 2021, the per capita income of the most vulnerable fell from R$163 to R$94. Why did it fall? For three reasons. First, they are receiving less money from the income transfer. of the job market. And even the few who are working, which are only 18%, have a lower remuneration”, he says. “It’s a general deterioration, in all dimensions.”
For her, the new government will need to design policies that attack these problems. This involves the continuity of income transfers, but in a focused manner, including an active search — that is, tracking those who are entitled to the benefit, but have not yet received it.
“The first thing is to go after the poorest 10%, find them and all receive a transfer. This is urgent”, he says.
In addition, she defends the encouragement of professional requalification programs so that these people are able to re-enter the job market. It is important, however, to align the course with the worker’s life project and the economic vocation of the territory in which he lives, to avoid the repetition of problems in previous policies, which trained professionals misaligned with the needs of local production.
For Machado, the ideal model is to grant a kind of “course voucher”, encouraging companies to hire a professional who will have the qualification guaranteed by the State. “This is a worker who has more value, because the course is guaranteed, and the course will be related to the area of work”, he says. “We need smart exits.”
WORK AND INCOME OF THE POOR 10%
Income from transfers (average per adult)
- 2001 – BRL 31
- 2014 – BRL 112
- 2021 – BRL 84
Income from work (average per adult)
- 2001 – BRL 103
- 2014 – BRL 164
- 2021 – BRL 57
Occupancy rate
- 2001 – 48%
- 2014 – 36%
- 2021 – 18%
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