Brazil Has Lost 1.1 Million Formal Jobs in Two Months of Pandemic

RIO DE JANEIRO, BRAZIL – Heavily impacted by the crisis triggered by the coronavirus pandemic, the Brazilian labor market lost 1.1 million formal jobs in March and April this year, according to data from the General Registry of Employees and Unemployed (CAGED) released on Wednesday.

Brazil started implementing the required isolation measures to contain the spread of Covid-19 during this time, leading to the temporary shutdown of service sectors.

Job cuts began in March, with the loss of 240,702 jobs, but intensified in April, when 860,503 jobs were cut. This was the worst result in April since 1992, when the CAGED historical records began, being the largest dismissal recorded for this period in 29 years.

In January and February, before the public health crisis, the country had created a net 338,000 jobs. In total, Brazil closed 763,000 formal jobs between the start of the year and last month. The four-month performance ended the period with 38.046 million formal jobs, the lowest level since 2011 (36.824 million).

The economic sector that suffered the most from the pandemic was services: 362,300 jobs were lost last month alone. Commerce closed a net 230,200 formal jobs in April, while industry lost 195,900 formal jobs in the same period. São Paulo accounted for 336,755 jobs lost.

This is CAGED’s first data report since the start of the pandemic. The Ministry of Economy justified the data blackout on account of the lack of information on hiring and dismissals by companies. And it urged companies to rectify and resubmit the data. The last CAGED release before this one by the government was for last December.

However, data on unemployment insurance claims showed that the labor market was suffering as a result of the impact of the Coronavirus crisis. The government estimated that 200,000 Brazilians dismissed during the pandemic -between late March and April- had not yet claimed the benefit due to difficulties.

In a note, the Ministry of Economy stated that the result would have been worse without the Government’s benefit payment program for people with reduced working hours or suspended work contracts. The estimate is that 8.1 million jobs were preserved through the initiative.

“It’s a tough number that reflects the reality of the pandemic we’re experiencing, but there is something positive in it. It shows that Brazil, unlike other countries, is managing to preserve jobs and income,” said Bruno Bianco, special secretary of Social Security and Labor at the Ministry of Economy.

Source: El País