Small businesses account for most pandemic wage cuts

Small businesses made up 75.3 percent of all agreements made in 2021 under the federal program to allow companies to cut or suspend employee’s wages during the pandemic. The data comes from the Economy Ministry.

Nearly 53 percent of all deals came in the services sector — the backbone of the Brazilian economy. Roughly 40 percent of deals concerned the suspension of contracts — while 28 percent were for reducing working hours and cutting wages by 70 percent.

The government maintains that the program helps avoid massive wage cuts as the country registers record unemployment rates. The most recent data from the Brazilian Institute of Geography and Statistics shows that 14.7 percent of the workforce is currently out of a job, representing 14.8 million Brazilians.

In January 2020, the unemployment rate sat at 11.2 percent.

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