Author: Geralda Doca and Aguinaldo Novo

Source: O Globo, 18/04/2008

BRASÍLIA and SÃO PAULO. The formal Brazilian labor market registered a positive balance of 206.556 jobs in March - a difference between hired and fired, breaking the record for the same period in 2007, when 146.141 formal jobs were created. As a result, the number of jobs generated in the first quarter of this year reached 554.440, also the best result in the series of the General Register of Employed and Unemployed (Caged) of the Ministry of Labor, which started in 1992. With the exception of the manufacturing industry, all sectors hit a record for the month of March.

 

In releasing the Caged data, Labor Minister Carlos Lupi criticized the Central Bank's decision, which raised interest rates by 0,5 percentage point to 11,75% per year on Wednesday, arguing that the industry has not yet touched the ceiling of its capacity - at least in terms of job creation.

 

Lupi said that the average increase in hiring in the sector, in which there is inflationary risk according to the monetary authority, was 0,57%, against the national average of 0,70%. The segment accounted for 40.389 jobs last month, just below the balance obtained in March 2007.

- It was an evaluation error.

It was hasty - he said.

 

'Underground' economy grows faster than the formal one Despite this, Lupi said that the increase in interest rates will only affect the labor market as of September and will not affect the goal of creating 1,8 million jobs in 2008.

 

If there are more increases, he evaluated, the performance will not be repeated next year: - It will be more difficult to repeat the good performance of the job in 2009.

 

With 89.072 jobs, the service sector continued to pull hires. Then, there is the transformation industry, civil construction, with 33.437 vacancies, commerce, with 19.594 and agriculture, with a balance of 15.442.

 

According to Caged, the best performance was in the state of São Paulo, with a balance of 90.582 workers with a formal contract.

 

In second place was Minas (33.021), followed by Paraná (25.085) and Rio, with 18.883. There was an increase in the level of formal employment in all regions, except the Northeast, which eliminated 14.633 jobs, due to the off-season in the sugar and alcohol complex.

 

The so-called underground economy, the sum of the production of goods and services that are not under official control, has also advanced. And more than the formal economy. According to the Underground Economy Index, calculated by the Getulio Vargas Foundation (FGV), at the request of the Brazilian Institute of Ethics in Competition (Etco), it grew 8,7% in 2007, above the 5,4% of the Gross Domestic Product ( GDP, sum of goods and services produced in the country) in the period.

 

The strong formal market regulation and high tax burden contributed to the result. In the index, FGV considers both the informal market and activities that are not declared to the government for the purpose of tax evasion.

 

Smuggling and drug trafficking are not considered.