SEATTLE, WA — Life for workers in Brazil has improved in some important areas, according to a recent report issued by the World Bank. Workers are more skilled and better paid, the report states. The minimum wage has almost doubled since 2002, a factor that has played a significant role in reducing poverty and inequality.
However, the report, entitled “Sustaining Employment and Wage Gains in Brazil,” also shows labor productivity growth has been low or stagnant over the past 15 years, and real salary gains went beyond labor productivity growth. A projected contraction in the economy by 2.6 percent in the next year has also stoked fears of rising unemployment.
In order to maintain families’ standard of living, four ideas put forward in the report suggest quick action needs to be taken to boost labor productivity and connect the poor to better, more productive jobs.
- Strengthen vocational training programs.
In order to increase the efficiency of PRONATEC, the government’s main technical education and vocational training program, the report recommends improving the monitoring and evaluation systems to determine training needs and estimate returns in terms of wage increases.
By increasing partnerships with the private sector, areas in which training is most needed can be identified and access to internships and jobs can be facilitated.
Moreover, the study also recommends that career guidance be provided to students to assist them with the transition from school to the labor market and increase more job opportunities.
- Strengthen public employment services to facilitate job searches and matches.
The National Employment System (SINE) in Brazil only has a job placement rate of 12 percent. The report finds that reform of the system is a lower cost policy that can boost workers’ employment capabilities.
Specifically, reforms should include: a job-placement focused structure, management, monitoring and evaluation of SINE; detailed profiles of the persons seeking employment; investment in information systems; active searches for jobs hiring a lot of unskilled workers; the development of indicators and targets related to final outcomes; and a more in-depth study of the impact of assistance programs for entrepreneurs in Brazil.
- Promote labor regulation reform that supports firms’ productivity and job attachment.
Based on the report, worker turnover is very high in Brazil compared with international standards, which discourages employers from investing in training. In 2013, 57 percent of workers left one job to accept another, higher-paying position.
The report recommends that Brazil amend current labor laws so as to encourage long-term contracts, increase hiring and productivity; create incentives for people who are employed sooner or for longer periods; and review and revamp the current Training Program Law.
- Improve Productive Inclusion Policies.
Although the majority of Brazilian poor have jobs, their income is low. Since 2011, PRONATEC has helped to increase the supply of training slots geared toward the poor in urban areas.
According to the study, strengthening and diversifying productive inclusion programs, including training opportunities through PRONATEC as well as microcredit initiatives and support for small-scale farming, will connect the poor to better jobs.
At the same time, challenges include providing training in not only technical skills, but also in leadership, motivation and teamwork; expanding access to worker support services; facilitating the transition of rural workers to non-agricultural jobs; and improving monitoring and evaluation systems for current productive inclusion programs.
These four ideas suggested by the World Bank would be beneficial for maintaining families’ standard of living and helping reduce inequality and poverty in Brazil.