In Brazil, Number of Workers Earning Only One Minimum Wage Grows

RIO DE JANEIRO, BRAZIL – With the slow upturn in employment, which is primarily the result of low-paid jobs, and the still significant number of unemployed, the minimum wage has virtually become a ceiling for many workers.

Between the third quarter of 2014, the onset of the recession, and the same period last year, half a million workers started to earn at least the minimum wage. When comparing last year to 2015, at the peak of the crisis, this difference amounts to 1.8 million people.

In the quarter ended last September, there were 27.3 million people earning up to one minimum wage, one third of the total number of workers in the country. The data are from the Continuous National Household Sample Survey (PNAD), compiled by the consultancy company IDados.

The data show that much of this increase occurred due to the explosion of informal employment. Without the structure that jobs with a signed worker’s record book provide, informal workers are exposed to worse conditions and lower pay.

In the third quarter of 2019, there were 20.9 million informal workers earning up to the minimum wage of R$998 (US$234) per month  – compared to 6.2 million workers with a signed worker’s record book who earned this same income.

In January 2020, the minimum wage is R$1,045. The new floor, however, is not enough for the worker’s basic expenses, according to experts.

“The increase in informality has in fact led more workers in the market to earn less. People have lost the protection that the minimum wage represents and, for their livelihood, they have accepted any opportunity,” says Ana Tereza Pires, a researcher at IDados. In addition, the wage gap between dismissals and new hires has increased in the last months of last year, which suggests that the warming of the market has not yet regained its former vigor.

She recalls that the crisis has also increased the number of workers with more schooling who have gone into informality or accepted a lower wage in the formal market. From 2014 to 2019, there was a sharp growth among workers who have completed high school or higher education earning up to a minimum wage. They filled positions that were previously intended for less qualified people.

Community assistant Valdelice Lima, 44, is an example of this. She graduated in business administration in 2010. Today, she works for Rio’s city government earning approximately a minimum wage – nearly half of what she once earned: “There are three of us at home. We are spending only on what is essential”.

More unequal

Since the onset of the crisis, more people have started earning up to a minimum wage in the Southeast (with 859,400 more people in this situation) and North regions, with an increase of 306,100 . Although the number of workers in the Northeast earning this wage has dropped, approximately 55 percent of the workers there are paid up to a minimum wage.

For the technical director of Dieese, Clemente Ganz Lúcio, although more people have returned to the formal market in 2019, informal jobs will still grow. “Without a commitment to the country’s growth and integration policies, an engineer will continue to drive for Uber”.