Opinion – Vinicius Torres Freire: Average salary has not been so low since 2012 and will stay that way in 2022

Earnings from work, “salaries”, have not been so low since 2012 – since there is a comparable record in IBGE statistics. In 2022 they will remain so low, apart from miracles. It will be a decade of poverty.

One reason for this poverty is the fact that new jobs are bad: low-skilled, low-paid, insecure. This picture worsened in the 2015-2016 recession, but it was already there, indicate studies by economists. In the epidemic, the situation must have worsened.

We have chronic problems. A symptom of the evil is the average growth of 1.4% in the economy a year after the recession, in 2017, 2018 and 2019. In 2021, the country will recover what it lost in 2020, but not what stopped growing in year one of the epidemic (even at that rate of almost nothing, 1.4% a year). In 2022, the forecast is for growth of less than 1.4%, if there is any progress.

In this environment, any recovery in the average income of “wages” is very unlikely. Inflation should stay at 5% next year. In other words, just in order not to lose out on inflation (so as not to retreat again, in real terms), the average income from work would have to grow that 5% next year. In 2021, until October, the drop was 2% compared to 2020 (in the income usually received, in nominal terms, without discounting inflation). Discounting the cost, the loss was 11%, according to data released this Tuesday (28) by the IBGE.

In other words, it is very difficult that in 2022 the stagnation of wages does not turn 10 years old. At best, GDP will barely move and the unemployment rate will be similar. Even in this year of 2021, with better starting perspectives, there was a very unexpected growth frustration. The economy did not react well to the reopening and vaccination. Yes, soaring inflation, the shock of the March-July slaughter and government-caused disorder have ended up ruining the rest of hope. But that doesn’t seem to have been the only problem.

Since the recession, the proportion of people working in private companies with a formal contract has fallen. Since then, it has remained at a low level (it went from 40% of the total employed in 2014 to 36% in 2018 and so on). The number of “self-employed” workers increased (which can be anything, from the self-employed most remedied with CNPJ to the totally precarious street vendor).

The tendency towards precariousness or the use of work variants “on account” may be reinforced by changes caused by the epidemic (automation, home office, etc.). It’s a hypothesis, we still don’t know. Less uncertain is that these self-employed workers aren’t bunches of sophisticated consultants or service providers. The vast majority are, frankly, beaks.

“Own-account workers with CNPJ” earn 38% more, on average, than wage earners with CLT; those “self-employed without CNPJ” earn 38% less. But the formalized “account” workers, those with CNPJ, are only a quarter of the total mass of “account” workers.

In short, next year will be difficult for work again, but not just because of the economic situation. The decline in job quality has been going on since before the recession, it worsened after 2015-2016 and, by the most general indications, from 2019 onwards it remained the same, poor, still subject to rains and thunderstorms from the trend towards automation and other processes of more skilled labor downsizing.

If in 2023 we don’t have a government willing and able to make a big and quick turnaround, far beyond what stereotypes of the left and right imagine, we will be very shattered.