Source: O Estado de S. Paulo, 22/04/2008

After the release of Fiesp data, last week, which we commented on Sunday, reporting the creation of 28 thousand new jobs in the São Paulo industry in March - a record number in six years -, we had the information from the General Register of Employees and Unemployed (Caged), from the Ministry of Labor.

This research showed that the offer of formal jobs, throughout Brazil, broke a record in March, with the creation of 206,5 new formal jobs. In the first quarter of the year, 554,4 thousand formal jobs were created and, when comparing the two periods, 2007 and 2008, these are the best results since 1992, when the Caged surveys started.

The March result was 41% higher than the same month last year, and in the 12-month period ended last March, 1,77 million new formal jobs were created, in absolute numbers.

In March, the industry created, in the whole country, 40,4 thousand jobs, a result practically equal to that of the same month last year. However, in the first quarter, the sector accumulated 146,2 thousand new formal jobs.

The sector that most created formal jobs in March was the civil construction sector, with 33,4 thousand new vacancies, compared to 16,7 thousand in the same month last year, which justified the comment of the Minister of Labor, Carlos Lupi, that "This sector is booming".

There does not seem to be any doubt that the labor market in Brazil is going through one of its best phases, since systematic surveys began to be made.

But the formal economy data does not say everything.

Last week, Fundação Getúlio Vargas (FGV) presented its indicator on the so-called underground economy - commissioned by the Brazilian Institute of Ethics in Competition (Etco) - which grew 8,7% last year, compared to 5,4% % of formal GDP. Etco's president, André Franco Montoro Filho, clarifies that the purpose is to have an indicator that allows to determine the factors that stimulate the informal economy, in order to outline policies that reduce informality.

Most of the growth of the informal economy, according to the FGV study, has been stimulated by the increase in the tax burden, that is, in part it is a by-product of the formal economy. Even so, it contributes to the increase in employment and growth in demand.