Unemployment rate among the poorest is 36%, according to study – 09/09/2021 – Market

The unemployment rate of the poorest half of Brazilians rose nearly ten points during the pandemic, from 26.55% to 35.98%. Among the richest 10%, it went from 2.6% to 2.87%, points out a study by FGV Social released this Thursday (9).

The average individual income of Brazilians, including the informal and unemployed, fell by 9.4% compared to the end of 2019, before the pandemic.

The study compared data for the last quarter of 2019, before the outbreak of the virus in the country, with those for the second quarter of 2021. The calculation considers the poorest half of the population, in relative terms.

In the case of the poorest, however, this loss is even more dramatic, reaching 21.5% in the period — which reveals that inequality only increased during the health crisis. Meanwhile, the richest 10% had, on average, a drop of 7.16%, or less than a third of lower-income Brazilians.

Researchers from FGV Social point out that more than half (11.5 pp) of this fall in the income of the poorest is due to many having given up looking for a vacancy due to the high rate of unemployment, a situation known as despondency.

The unemployment rate was 14.1% in Brazil in the second quarter, according to the IBGE (Brazilian Institute of Geography and Statistics), when the country had 14.4 million unemployed.

Also according to FGV Social, those who lost most income were residents of the Northeast region (-11.4%). In contrast, in the South, this loss was 8.86%, for example. In addition, women, who had double shifts of childcare at home, had a 10.35% drop in income, compared to a reduction of 8.4% among men.

“The elderly aged 60 years and over also lost, especially because they had to withdraw from the labor market due to the greater weakness in relation to Covid-19 (-14.2% loss).”

According to the study, coordinated by Professor Marcelo Neri, the reduction in the income of those employed by the hour —due to the acceleration of inflation, unemployment and the reduction of working hours— is also among the causes of the loss of income among the poorest.

This Thursday, the IBGE pointed out that the country’s official inflation, according to the IPCA (Extended National Consumer Price Index), reached 0.87% in August, driven by the increase in gasoline.

The rate is the highest for the eighth month of the year since 2000, when the indicator reached 1.31%. The result occurred after an even stronger advance in July, of 0.96. In the 12-month period, the IPCA reached double digits, reaching the mark of 9.68%

Inflation is seen as a high toll for the poorest to recover the losses they incurred during the pandemic, and recent highs in inflation, together with still high unemployment, had distributive consequences.

In the 12 months ending July 2021, the inflation of the poor was 10.05%, 3 percentage points higher than the high-income inflation, according to estimates by Ipea (Institute of Applied Economic Research).

This means that the so-called discomfort index, composed of the simple sum of unemployment and inflation rates, not only rose, but rose much more among the poorest.