Source: Dourados Agora - MS, 03/05/2009

Structural problems in the Brazilian economy may be aggravated in the context of the international financial crisis. The crisis, which has already led to a loss of jobs and income, has the potential to cause an increase in the use of labor without formal contracting. “In a recession, informality tends to increase precisely because companies want to reduce the cost of labor and workers want to avoid losing wages”, explains economist José Márcio Camargo, professor at PUC-Rio.

Based on more recent data, a survey by the Getúlio Vargas Foundation released last year found that informality also grew at the time of the expansion of the Brazilian economy, before the crisis that started in the second half. According to FGV, the informal economy grew 4,7% until June last year and 8,7% in 2007.

For Camargo, the Brazilian labor legislation generates “a huge incentive to informality”. He exemplifies his reasoning by citing retirement. “As the worker is entitled to a pension at the age of 60 of a minimum wage, regardless of having contributed to social security, there is a huge incentive for entrepreneurs and workers to negotiate this wedge with a higher income and a lower cost of living. labor."

"There is a huge wedge between the salary that the worker receives and the cost of work for the entrepreneur, that wedge is taxes and more social security", he says.

The economist Fernando Botelho, a researcher at the Foundation Institute of Economic Research (Fipe) of the University of São Paulo), ponders that "when the economy grows, the availability of credit increases and the conditions for companies to formally contract". But he estimates that if the government had insisted on the reform agenda during the first term (2003-2006), the country would be less vulnerable.

According to Botelho, it was the credit reform, for example, that made it possible to increase the financing of homeownership, which generated a demand for real estate and makes the construction sector still preserved in the crisis.
In addition to informality, economists fear an increase in child labor. In the event of a recession, the most vulnerable sectors of society may be particularly hard hit. Camargo, from PUC-Rio, explains that the supply of child labor is related to the poverty of families, “the child who works is from a poor family”.

“A substantial part of the poor Brazilian families need the resources, the income generated from their children's work to have a minimally reasonable standard of living. What happens is that there is an incentive for families to put their children in the labor market to improve their standard of living in the present to the detriment of the standard of living of these children in the future when they become adults ”, he laments.

Despite the negative scenario, the two economists do not fear that there may be an increase in cases of work in a situation similar to slavery because of the crisis. They point out that slave labor is a component of marginal sectors of the economy and occurs in rural regions, on the agricultural frontier, using extremely unqualified labor. Botelho adds that slave labor was under pressure at the opposite moment of the crisis, when the world demand for commodities (soy, meat, iron ore) grew in recent years. (Radiobras)