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Brazil—Mind the Gap—Employee Perspectives

by Luisa de Azevedo & Adriana Fontes

September 2010—Wage differences by race and gender could be pushing lower-educated Brazilians into a precarious informal economy, according to a new study by the Sloan Center on Aging & Work.

Currently, the unemployment rate in Brazil for females is 10%, double the rate for males. The unemployment rate for black people is also higher than for white people at 8% and 6%, respectively. Older employees’ unemployment rates vary from 2% to 3% depending on gender and color.

However, these relatively low unemployment figures mask the fact that over one third (about 34%) of Brazilian employees are working without the coverage of labor laws. The level of engagement in the informal, unregulated economy is higher among younger employees (37%), followed by older employees (35%), leading to insecurity or outright exploitation with no employment contracts to establish transparent terms of work.

Yet, as risky as the informal economy may be, low-educated Brazilians may see it as the only means of overcoming widespread wage differences. Inequalities in wage include:

  • Earnings of employees without any formal instruction are 13% below the minimum wage;
  • Even employees that have completed secondary education still earn less than the Brazilian minimum wage, on average;
  • Black employees earn 63% of what white employees earn; and
  • Females are paid, on average, three quarters of males’ salary.

In Brazil, part-time employment is generally associated with precarious work rather than a deliberate choice to work less hours. The connection to sub-par occupations can be illustrated by the fact that 22.5% of informal employees have part-time jobs, while just 5% of formal employees have part-time occupations.

No surprise, then that fully 45% of younger Brazilian employees and 40% of older employees agree/strongly agree that their job is stressful, and nearly half of Brazilian workers aged 49 and under feel they have excessive work demands.

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