Unemployment drops and income goes up in October

The unemployment rate in Brazil has once again decreased. In the three months through to October, it has dropped to 8.3 percent — the lowest since the quarter ending in May 2015. At the end of Q3, the rate sat at 8.7 percent.

Roughly 9 million people are still looking for a job in Brazil. While that is almost equivalent to the entire population of Portugal, it is the lowest figure since July 2015. Meanwhile, employed workers add up to 99.7 million, the highest number on record.

“This moment of employment growth has been underway since the second half of 2021. And with the proximity of the last months of the year, a period in which there is historically an increase in job creation, this trend will continue,” said Adriana Beringuy, coordinator of work and income surveys at IBGE, Brazil’s national statistics agency.

The holiday season usually brings good numbers for retail and services, boosting temporary hires. And this year, with the World Cup taking place up until the week before Christmas, expectations for these sectors are even better. 

A survey carried out by the National Confederation of Commerce (CNC) shows that 85 percent of retailers indicated that they will hire more employees in the last month of the year, the highest proportion since 2011.

The IBGE data also shows that despite remaining high, the informality rate fell once again, to 39.1 percent, and that there was an increase in employees with a formal contract, especially in the private sector, which reached 36.6 million people. That is important because informal labor pays less and offers few (if any) labor protections.

The increase in the total workforce of the proportion of workers with a formal contract, who tend to have jobs with better wages than informal workers, also explains the improvement in earnings perceived in the rolling quarter. 

The average real income grew by 2.9 percent in the three months to October compared with the previous rolling quarter, reaching BRL 2,754 (USD 519). The average was notably pulled up by the earnings of employees with a formal contract (3.1 percent increase) and self-employed workers (3.3 percent).

The improvement in the income of formal workers seems contradictory with the data presented this Tuesday by the Labor Ministry, which show that the average admission income of workers with a formal contract has dropped for the second month in a row.

It are actually not.

The Brazilian Report has shown that even if the labor market is improving, jobs Brazil is creating are paying less and less since many people, after the pandemic started, have accepted to work for less — especially for a formal job, which has a series of benefits that informal or self-employed jobs do not have.

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