However there seems to be a reversion of this trend

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Unformatted text preview: mber 2008. Most of the decline in formal jobs took place because of the sudden reduction in hiring rather than firing, especially in States like Sao Paulo 110 The number of underemployed workers ‐‐ as measured by those working an insufficient number of hours – increased by 11 percent between January 2008 and January 2009, or an additional 60,000 underemployed workers, suggesting other margins of adjustment to the crisis. This rising underemployment is better observed in Sao Paulo, Rio de Janeiro and Belo Horizonte. Still, underemployment as measured here, represent only 700,000 workers compared to more than 21 million workers in the PME population. 111 Data from Pesquisa Mensual de Emprego (PME). 112 Informal workers are defined as those without Employment Card (sem Carteira de Trabalho assinada). Other analyses could include those self‐employed (conta propia). 113 Formal workers are defined as those with Employment Card (com Carteira de Trabalho assinada). 114 Caged stands for Cadastro Geral de Empregados e Desempregados and excludes informal sector workers. 85 and Minas Gerais.115 In 2008, the average monthly number of workers hired and fired in Sao Paulo was around 425 and 358 thousand respectively, but in December the number of hired workers dropped to only 271 thousand, causing a major drop in formal jobs. By March 2009, the formal job losses seem to have halted overall, and in fact may have reverted in some states, but not including the industrial sector in Sao Paulo. In April 2009, unemployment figures in Sao Paulo finally dropped, representing 38 thousand less unemployed in urban Sao Paulo. Brazil Labor Market Indicators (2006‐2009) Figure 1 Figure 2 Unemployment rate Activity rate (Recife, Salvador, Belo Horizonte, Rio de Janeiro, Sao Paulo, Porto Alegre) 58 58 10.40 Percentage of the acitve population Percentage of the working age population 12 57 57 56 10.10 10 9.00 8.60 8 56 2009 Activity rate 2009 Real income of private sector workers Net job creation/destruction 1,400 Real income for private sector workers (R$ of March 2009) 800 700 600 500 400 300 200 100 0 -100 1,300 1,200 1,100 1,000 900 800 700 2009 Jul 2008 Months Months salaried workers Jul 2006 2009 Jul 2008 Jul 2007 Jul 2006 2007 600 -200 Jul Thousand of workerse Figure 4 900 115 Jul months 12 per. Mov. Avg. (Activity rate) Figure 3 • 2008 Jul Jul Months 2007 6 2006 Jul 2008 Jul 2007 Jul 2006 55 Private sector workers with social security non-salaried workers Private sector workers without social security In addition, informal workers are facing declining real wages in recent months. Average real wages in urban areas have increased during 2008, and real wages in January 2009 were almost 6 percent higher than those in 2008. These higher real wages hide important differences across types of employees, since those informal workers (sem Carteira) saw their wages decline during the 2008 year and in January 2009 by 8 and 3 percent, respectively. This pattern is also identified as a stylized fact by Bosch and Maloney (2009). 86 R...
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