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Unemployment Rises in Brazil

By Marcela Canavarro, Contributing Reporter

Minister of Labor Carlos Lupi, photo by Elza Fiúza/Agência Brasil.
Minister of Labor Carlos Lupi, photo by Elza Fiúza/Agência Brasil.

RIO DE JANEIRO – The unemployment rate increased in six of the biggest metropolitan areas in Brazil. The survey, released last week by Interunion Department of Statistic and Socioeconomic Studies (Dieese), refers to March and states that unemployment reached 15.1% of Economically Active Population – or 3 millions workers. In February, the percentage was 13.9%.

Unemployment has been increasing for the last three months in Brazil, when the world crisis effects led some sectors to cut expenses, including employees’ salaries.

The government reacted with macroeconomic adjustments such as taxes stimulus for cars sales (in December) and, recently, also for home utilities such as washing machines and refrigerators. Although retail sector had a positive result after that, with a 21% sales improvement, it has not changed the work force contraction yet.

In fact, retail sector registered the most drastic decline in employment levels, cutting 145,000 jobs, followed by industry, with a 30,000 decrease, accordingly to Dieese. It means, respectively, a 5.1% and 1.2% reduction compared to February.

Tax stimulus for home utilities is not enough to warm up the economy in a level to decelerate unemployment, affirmed Alexandre Loloian, Research Coordinator of State System of Data Analysis Foundation (Seade).

“It’s positive but with punctual effects and not enough to neutralize layoffs in other sectors”, he told to National NewsWire Agência Brasil.

All regions included in the survey registered an increasing unemployment level, comparing to February: it’s 10.4% higher in Sao Paulo, 12.5% in Porto Alegre, 6.3% in Recife, 3.6% in Salvador, 8.5% in Belo Horizonte and 8.6% in Distrito Federal.

Accordingly to Dieese Research Coordinator, Sérgio Mendonça, those numbers indicate that “capacity to create jobs is decelerating”. In fact, Belo Horizonte, Distrito Federal and Salvador registered a better position in March compared to same month in 2008, he told to Agência Brasil. But new jobs were not enough to compensate population growth in the same period – a movement that had had a positive result in the last years.

In Sao Paulo state, the most important industrial area in Brazil, 154,000 workers lost their jobs in 39 cities between February and March – completing a total of 1.5 million people unemployed. It’s the worst result since 1985, when the survey was released for the first time. At the same time, 61,000 workers got a new job in March, indicating that job market is under a slight adjustment.

Public investments have focused in the construction sector – traditionally important to improve employment rates and to warm up the economy. It seems it helped to decelerate job market downturn as construction sector hired 15,000 workers, which means 1.5% more than in February.

The survey considers that someone is unemployed after 30 days seeking job with no success.

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