Unemployment in Brazil falls in the 4th quarter, but income is the lowest in the series

The country's labor market has been slowly reacting to the slowdown of the pandemic, but, according to the IBGE, 2022 will still not be a year of recovery

A Brazilian work card, a document that gathers all the labor information of Brazilian workers and which, in the coming years, will be digital.
A Brazilian work card, a document that gathers all the labor information of Brazilian workers. Photo: Shutterstock
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Brazil ended the fourth quarter of 2021 with a decline in the unemployment rate to the lowest level since the end of 2019, but still with 12 million unemployed and the lowest historical level of real income.

The Pnad Contínua survey showed that the unemployment rate reached 11.1% in the three months through December, from 12.6% in the third quarter and 11.6% in the quarter through November, according to the Brazilian Institute of Geography and Statistics (IBGE) this Thursday.

This result is the lowest since the fourth quarter of 2019, showing that the labor market has been recovering from the problems caused by the coronavirus pandemic, despite the seasonality of the end of the year.

READ ALSO: Inflation haunts Latin America’s growth in 2022

In the same period in 2020, the rate was 14.2%, and the result at the end of last year was just below the expectation in a Reuters poll of 11.2%.

The average annual rate was 13.2%, down from 13.8% in 2020 when the labor market felt the most significant impact of the coronavirus pandemic, but still, the second-highest in the historical series started in 2012.

Even so, the pre-Covid level has not yet been recovered, according to the IBGE, since in 2019, the average rate was 12%.

“In 2021, with the advancement of vaccination and the improvement in the scenario, there was an increase in the number of workers, but there is still a high contingent of people in search of occupation”, said IBGE coordinator Adriana Beringuy.

READ ALSO: Latin America on the recovery track: Peru and Colombia’s growth in 2021 are the highest in a century

“It is a year of recovery for some indicators, but it is not the year of overcoming losses, not least because the pandemic is not over, and its impacts, still ongoing, affect various economic activities and worker income,” she added.

High inflation has eroded real income despite signs of improvement in the labor market, with workers’ pay ending 2021 at the lowest level in the historical series.

BRL 2,447

was the Brazilian workers’ income in the three months through December, a drop of 3.6% compared to the previous quarter and 10.7% compared to the same period in 2020.

For the year, the average income received by people was BRL 2,587, a decrease of 7.0% compared to 2020.

12 million unemployed

In the fourth quarter, the number of unemployed people in Brazil was 12.011 million, a decrease of 10.7% concerning the three months until September and 16.7% over the previous year

“During this period, there is usually a reduction in unemployment due to the greater absorption of workers in activities such as commerce and accommodation and food. Added to this, there is a recovery process of occupation in progress since August of last year”, highlighted Beringuy.

READ ALSO: Brazil’s Central Bank says fiscal policy to control prices may have the opposite effect and spike inflation

The total number of employed persons increased 3% in the quarterly comparison, to 95.747 million, a record in the historical series, with an increase of 9.8% over the fourth quarter of 2020.

Record occupancy with record decline in income has to do with issues that marked 2021. There are more people in the market, but there are many informal workers, and we still had a sharp inflationary process in 2021. Workers who are entering the market, informal or formal, are earning less


Workers with a formal contract in the private sector grew by 2.9% over the third quarter, while those without a formal contract increased by 6.4%.

Among the activities, there was an increase in employment in commerce (3.4%, or 602,000 people), other services (11.8%, or more than 521,000 people), and information and communication (3.3%, or more than 367,000 people). As a result, the industry showed stability in the fourth quarter.

On average, the highest percentage growth came from construction, 13.8%, or 845,000 more people. Trade, significantly impacted by the pandemic, had a gain of 5.4% compared to 2020, an increase of 881 thousand people, but the contingent of workers was still below that of 2019.

The industry also failed to recover the losses of 2020 – there was an increase of 3.9% or 446,000 people working in the sector, but compared to 2019, the number of workers fell by 3.1%.

The year 2021 also saw a recovery in the occupation of the service sectors, also greatly affected by the measures to contain the pandemic, especially domestic services, with an increase of 6.7% or 327 thousand people.

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