Good morning! We’re covering today disagreements within the government about a job-creation program and its effects on productivity levels. The future of Brazil-Argentina relations. And gambling in Brazil. (This newsletter is for platinum subscribers only. Become one now!)
Government job-creation program could curb productivity levels: report
One month ago, Economy Minister Paulo Guedes launched a program to tackle youth unemployment. The main provision of the plan would allow companies to pay fewer benefits and social contributions when hiring youngsters in their first professional position. The Ministry estimated that the program would create 1.8 million jobs. But an internal government report has now cast doubts about its effectiveness. The main concerns are:
- Not cost-effective. The job-creating program will cost around BRL 1,929 per worker—which is more than the average estimated salary of BRL 1,200.
- Productivity. The new rules could encourage companies to simply replace older employees for younger, cheaper ones—which could hinder productivity levels. Not to mention that workers aged 30 or above, when many already have children, would have an additional hurdle in their job hunt.
- Effectiveness. Back on November 12, The Brazilian Report said “there is little evidence to support that by lowering employers’ dues, they will hire...