By NELSON MARCONI*
Employment has grown, however, as long as the Brazilian economy is not leveraged by more dynamic sectors, job creation will continue to be concentrated in lower-paying activities
The Brazilian economy is experiencing employment growth that includes an increase in the number of employed people with a formal contract. It's certainly good news, and employment has kept pace with income growth, which is also healthy. But what is the quality of the jobs that are being created? Are advances occurring in sectors that pay good wages and do work regimes point to more stable relationships and greater social protection?
To analyze this issue, let's compare the employment picture in three similar periods of different years: the first quarters of 2012, 2023 and 2024. Why these three periods? Due to data availability – microdata for the first quarter of 2024 are the most recent –; the possibility of comparing this period with the first quarter of 2023, which makes it possible to trace the evolution of the labor market during the first year of the Lula government (with some lag, which is desirable in this case); and the beginning of the Continuous PNAD historical series in the first quarter of 2012. By comparing corresponding periods, we reduce the effects derived from seasonal factors.
Let's start by evaluating the evolution of the longest period – 2012 to 2024 –, which will contribute to the subsequent analysis of the period 2023/2024. The data is found in table 1. There was a substantial change in employment relationships and the sectoral composition of the labor market during these 12 years. The contribution of formal jobs to the growth of total occupations was more significant than that observed for unregistered jobs. However, the group largely responsible for the increase in the number of employed people was the group of self-employed workers – they accounted for 43% of the variation observed in the period. And among them, the sector that grew the most was transport, confirming the publicized uberization of the job market. In addition to this sector, employment in other service activities, which include various personal services, also grew among the self-employed.
But it was not only among activities classified, according to theory, as non-routine manuals that the sharp growth of those employed under this work regime was observed. A similar movement was also observed between professional, scientific and technical activities. Therefore, the so-called pejotization process extended to several service sectors with different characteristics. As a result, the current scenario reveals a declining share of employment contracts with a lower degree of social protection, even if they are more flexible, which implies a drop in tax revenue from work, creating problems for the financing of social security itself.1
Following a global trend, during 2012 and 2024 there was a drop in employment in agriculture and an increase in the service sectors. Manual or routine activities such as transportation, personal services (other activities), commerce and accommodation and food contributed to 57% of employment growth over the analyzed period. Manufacturing, surprisingly, accounted for just -0,5% of the change in employment over this interval. The industrial workforce has a greater share of formal employees than most service sectors, and this characteristic remained throughout the period analyzed. This fact may have contributed to greater job stability in the sector.
Table 1: Percentage contribution to the difference in total occupations between 2024 and 2012
Table 1: Continued
On the other hand, the job market was not only filled with bad news during this period: also following the trend recorded in other countries, the contribution of the education and health sectors was positive, due to the growing role that these activities assumed in modern societies. , as well as professional and scientific activities, accompanying the modernization of some service areas.
This scenario – a combination between the more accentuated contribution to the evolution of occupations, of sectors that offer traditional services and others that offer more sophisticated services – has been the keynote of the labor markets of Western economies and characterizes the so-called polarization of employment. which also results in greater salary differentiation. Therefore, what happened in Brazil followed what prevailed in economies that deindustrialized.
Let's see in graph 1 the difference between salaries in modern and traditional sectors. There is also a difference between the salaries of the self-employed: those in activities that require greater skills fit well into this type of employment relationship, but workers in manual and operational tasks lose out when they leave the formal sector of the economy.
Well, and does this situation continue in the current situation? To a large extent, yes, and it helps to explain the growth in employment in the recent past, even in a situation in which the Brazilian economy is experiencing greater dynamism, given that it has maintained a low rate of growth for years, supported by the primary export sector, little intensive in labor and personal services, rather than relying on manufacturing and business services, as is the case in Asia.
The sectors that hired the most between the first quarters of 2023 and 2024 were transport, health and administrative activities, followed by manufacturing industry (again, welcome exception!!!) and commerce. When we analyze, in a more disaggregated way, the occupations created by sector associated with the type of employment (empty table 2), the highlights are precisely the occupations with a contract in the administrative and support areas, commerce and transport; those without a formal contract in domestic work and those self-employed in the transport sector (in the latter case, reinforcing the uberization process of the economy). Together they account for 42% of total employment growth between the two periods. We can see in graph 1 that the average salaries paid for occupations in administrative and support activities, with a formal contract and domestic workers, for example, are among the lowest in the Brazilian labor market. Ditto for commerce.
Graph 1: Sectoral average salary
Like the analysis for the broader period, there is also positive news: the contribution, albeit more modest, of the manufacturing industry to the generation of formal jobs, as well as occupations related to professional activities, information and communication and health. Even so, they do not constitute a variation that makes it possible to dictate the direction of employment in the country.
Thus, it seems that as long as the Brazilian economy is not leveraged by more dynamic sectors, job creation will continue to be concentrated in lower-paying activities; Nor will an increase in the level of employment be able to imply greater economic growth, because it will not generate a sufficient stimulus to demand to do so. Polarization in the job market will also continue.
Table 2: Percentage contribution to the difference in total occupations between 2024 and 2023
Table 2: Continued
Although we must celebrate the observed increase in employment, its direction towards occupations in which workers receive the best salaries will continue to depend on the resumption of production in sectors that generate greater added value and imply technological advances and production chains; however, with the level of real interest rates we practice, it will be very difficult for us to achieve a resumption of investments in sectors that could facilitate the necessary turnaround in our productive structure.[I]
*Nelson Marconi, Economist, he is executive coordinator of the Center for New Developmental Studies at Fundação Getulio Vargas (FGV-SP).
Note
[I] I prepared, together with Marco Brancher, a study on the impacts of pejotização on tax collection, which can be read at the website of website from the Center for New Developmental Studies: https://go.fgv.br/zbOjLB3hNFn.
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