Average unemployment rate declines in 2021, but remains above pre-pandemic

With the impact of the reopening of the economy, the average unemployment rate in Brazil dropped to 13.2% in 2021, reported this Thursday (24) the IBGE (Brazilian Institute of Geography and Statistics).

Despite the low compared to 2020, when the average rate rose to 13.8% with the effects of the pandemic, the indicator is still above the pre-coronavirus – it was 12% in 2019.

According to the IBGE, the average number of unemployed people was estimated at 13.9 million in 2021, a contingent that was relatively stable compared to the previous year. The number of people employed with some type of work grew by 5% between 2020 and 2021, reaching 91.3 million people in 2021.

The data are part of the Continuous Pnad (Continuous National Household Sample Survey). The historical series started in 2012.

The coordinator of Work and Income at the IBGE, Adriana Beringuy, states that the average unemployment rate of 13.2%, the second highest in the series, reflects the situation of the labor market at a time when employment has resumed growth after a year of heavy losses.

“Many people over the two years lost their jobs and several of them stopped looking for work at the beginning of 2020 because of the pandemic. Then there was a resumption of this search, even though the economic scenario was very unfavorable, that is, there was no high response in the generation of occupation”, he says.

“In 2021, with the advancement of vaccination and the improvement in the scenario, there was an increase in the number of workers, but a high contingent of people in search of occupation still persists”, he adds.

Quarterly rate drops to 11.1%

The survey also includes a quarterly cut. In this case, the unemployment rate dropped to 11.1% in the fourth quarter of 2021. The data was in line with financial market projections. Analysts consulted by the Reuters agency projected a rate of 11.2% in the period.

The indicator was at 12.6% in the third quarter. Between October and December 2020, it was 14.2%.

With the new reduction, the number of unemployed was estimated at 12 million in the fourth quarter of 2021. It decreased by 10.7% (minus 1.4 million people) compared to the quarter ended in September and fell by 16.7% (minus 2, 4 million people) compared to the same quarter of 2020.

The employed population, estimated at 95.7 million people in the last quarter of last year, grew 3% (2.8 million people) compared to the previous quarter and rose 9.8% (8.5 million people) compared to to the same quarter of 2020.

According to official statistics, a person is unemployed when he has no job and is looking for new opportunities. The IBGE survey considers both the formal and informal markets.

In 2021, the drop in unemployment occurred amid the reopening of economic activities, which stimulated a return to work. The creation of jobs, however, has been accompanied by a fall in average income.

The usual real income, estimated at R$ 2,447 in the fourth quarter, dropped 3.6% compared to the previous quarter and dropped 10.7% compared to the same quarter of 2020. It was the lowest income in the historical series, which started in 2012. annual average was BRL 2,587, down 7% for 2020 (or less BRL 195).

In part, the lower yield reflects escalating inflation in Brazil. Other factors that help explain the situation are the opening of jobs with lower wages and the return of informal workers to the market, according to analysts.

“At the beginning of the pandemic, those who suffered the most were the workers with lower qualifications. Now, they return to the market, but wages are lower. This pulls the average income down”, says economics professor Sergio Firpo, from Insper.

“Inflation hit hard on basic items for the population’s consumption. Between being without receiving or earning less, part of the people is entering the market with a lower income. They need to pay their bills in the short term”, says the economist. Bruno Imaizumi, from LCA Consultores.

Diarist Andreia Pereira de Moura, 44, felt the effects of the crisis in the job market. With the arrival of the pandemic, the resident of Belford Roxo (RJ), in Baixada Fluminense, was out of work throughout 2020.

At the time, he began to depend on emergency aid and the help of his mother, who is retired, to be able to pay the bills.

With the advance of vaccination against Covid-19 and the lower level of restrictions on activities, Andreia reports that she returned to work in 2021, but earning less than in the pre-pandemic period.

Demand for cleaning services is still less than half of what it was before Covid-19, according to the worker.

“I lost a lot of work with the pandemic. It was horrible. The situation even eased, but it remains difficult”, he says.

Andreia, who is informal, wants to find a job in a new area. She would like to move into professions such as school lunch or babysitting, although she avoids closing the door on other opportunities.

“We can’t choose.”

According to analysts, the reaction of the labor market in 2022 is threatened by the underperformance of the economy as a whole.

Economists and financial institutions project GDP (Gross Domestic Product) with a variation close to 0% this year, under the effect of persistent inflation, higher interest rates and electoral uncertainties.