Brazil’s Economy Minister confirms 2 new job recovery programs

RIO DE JANEIRO, BRAZIL – Economy Minister Paulo Guedes announced that in the coming weeks there will be 2 additional measures aimed at boosting the job market.

The statement was made to the press on Thursday, July 1, after the General Register of Employment and Unemployment (CAGED) disclosed the May creation of 280,700 formal jobs.

The first of the additional measures consists of a job training program directed at youths aged 18 to 28, the “most vulnerable age group in the population” for which the unemployment rate is as high as 40%.

“These are young people who have not had any job training” and who today have “no opportunity to study,” said Guedes.

The goal is to offer new ways of hiring young people in the labor market to allow them to gain experience and increase their employability opportunities. The measure intends to increase Brazilian productivity in formal activities through the qualification of young people, who often resort to informal jobs due to lack of opportunities.

Welfare Secretary Bruno Bianco said at the press conference that the model is still under study, but that “most likely” it will be a conjunction of the BIP (Productive Inclusion Bonus) with the BIQ (Qualification Incentive Grant).”

“The minister is quite accurately saying that the BIP will be paid this year by the government and the BIQ will be borne by the employee. It will be a combination of scholarships and bonuses that will comprise the worker’s salary,” Bianco said.

The second measure concerns “possibly turning the policy of wage flexibility permanent with unemployment insurance, which is another step that the secretary is working on with us,” Guedes said.

The plan is to change the way unemployment insurance works and, rather than offering unemployment benefits to lay off people, provide assistance to encourage companies to hire employees for a longer period of time, as occurred with the Emergency Job Maintenance Program (BEm).

“The unemployment insurance policy today privileges unemployment and the company that fires rewards the worker that remains unemployed,” Luís Felipe Batista de Oliveira, program director of the Special Secretariat of Social Security and Labor said.

“Last year and this year we had a shining example of favoring employability,” Batista said, praising the BEm. “Just as a reminder, last year our projections showed 12 million workers, which represent 30% of all the people who are employed under CLT (Consolidation of Brazilian Labor Laws) in Brazil.”

Economy Minister Paulo Guedes also stated that he expects that within the next 3 or 4 months, given the progress of mass vaccination and a safe return of activities, “the revival of sectors that were very weakened, such as retail, events, tourism, services, and all sectors that were affected during the pandemic.”

The economic reopening continues to propitiate the recovery of formal jobs in Brazil. CAGED data released yesterday morning, Thursday, July 1, show that the balance of hires over dismissals between May 2020 and May 2021 stood at 280,666, higher than Bloomberg economists’ forecasts, who expected the creation of 150,000 jobs.

In April, the adjusted balance stood at 176,981 job openings and 116,423 the month before.

Although the data is positive, it is worth noting that it is restricted to the formal market and has a different methodology from the one used by the Brazilian Institute of Geography and Statistics (IBGE).

The IBGE’s press release on Wednesday, June 30, showed that the number of unemployed in the country reached 14.8 million people and remains at a record high.

Compared to the same period last year, the formal market figures this year are much better. In May 2021, the CAGED posted its worst month on record and the balance between hires and dismissals was negative in 860,500 jobs.

Source: Veja