Business Coronavirus

Brazil’s unemployment rises as isolation goes down

Brazil’s expected “job apocalypse” has yet to occur. But as people leave isolation, unemployment rates are shooting up

Back in April, our Explaining Brazil podcast discussed the risks of a “job apocalypse” in Brazil. While data supporting that analysis has appeared — in June, more than half of Brazilian workers were out of a job — the full effects of the coronavirus crisis on the job market will only be felt in the coming months, as Brazilians continue to leave self-confinement in droves and pursue new jobs. 

Unemployment figures [restricted]only account for people who are actively looking for a job. And due to health concerns and a depressed economy, millions out of work did not even bother to look for a position that — in all likelihood — would not exist in the first place. Now, as Brazil’s coronavirus curves appear to show a slowdown in the spread of the disease, the scenario has shifted. Between July and August alone, 1.3 million people joined the workforce and unemployment rates climbed to 13.6 percent.

When compared to May — when quarantine restrictions were at their strictest — the rate of workers out of a job jumped by almost 28 percent.

Meanwhile, just one-fifth of the Brazilian population (42.5 million people) stayed home last month, according to the August edition of the National Household Sample Survey – Covid-19, published by Brazil’s official statistics agency IBGE. In July, 49.1 million were in isolation.

Brazil’s informal workers were hit the hardest by the pandemic, as the in-person economy all but shut down for the best part of three months. Street vendors and self-employed people were deprived of most of their income overnight. 

On top of that, a survey by credit reporting agency Boa Vista SCPC shows that bankruptcy requests jumped 71 percent in June 2020 when compared to the same period last year. And courts are bracing themselves for an even bigger wave of businesses going under.

Key takeaways from Brazil’s latest unemployment survey

  • Isolation. Less than 8 percent of Brazilians with college degrees self-isolated in August — a rate that jumps to 35 percent those with lower levels of education. This can be explained by the fact that most of the job cuts that happened in recent months affected less-skilled workers — while people in higher positions have largely returned to their normal working routines.
  • Informality. Little by little, street markets are reappearing and as most economic activities resume, informal workers may find making a living less challenging than before. “Informal jobs are the first to be cut — but also the first to bounce back,” said IBGE’s deputy director Cimar Azeredo, when disclosing the data.
  • Gender. Women make up 51 percent of Brazilians of working age. In August, however, they accounted for just 41 percent of employed workers and 43 percent in the overall workforce (that is, when informal jobs are factored in as well). Women also make up over one-third of Brazil’s informal workers.
  • Race. Fifty-nine percent of Brazilian informal workers are black or multiracial, though these groups make up 55 percent of the total population. As we have shown, informal jobs are usually more precarious, and provide workers with little to no social protections and labor rights, while also paying lower wages. States with high human development indexes have consistently low informality rates.[/restricted]

By Aline Gatto Boueri

Aline Gatto Boueri is a data journalist. She has had her work published by Gênero e Número, Universa UOL, Marie Claire, Projeto Colabora, among others.