After hitting 14.6% in the previous quarter, the unemployment rate dropped to 13.9% in the fourth quarter. Even so, the average unemployment rate was 13.5% for 2020, the highest one since 2012. It corresponds to nearly 13.4 million people looking for a job in Brazil. The result for the year interrupts the drop in the employment started in 2018, when it stayed at 12.3%. In 2019, unemployment was 11.9%.

The data came from the Continuous National Household Sample Survey - Continuous PNAD, released today (26) by the IBGE.

"The labor market got worse last year, due to the Covid-19 pandemic. Social distancing measures to control the propagation of the virus temporarily paralyzed some economic activities, which also influenced on the decision of persons to look for a job. With the relaxation of those measures along the year, a larger contingent of people resumed the search for a job, pressing the labor market," explains Adriana Beringuy, an analyst of the survey.

Within a year, the employed population reduced by 7.3 million persons, reaching its lowest figure in the annual series. "We left the largest employed population in the time series in 2019, with 93.4 million people, to 86.1 million in 2020. It was a very sharp drop in a very short period, which significantly impacted the survey indicators. For the first time in the annual series, less than half of the population at working age was employed in Brazil. In 2020, the employment-population ratio was 49.4%," adds Beringuy.

The drop in the employment was widespread along all workers. Within a year, the number of those employed with a formal contract in the private sector – excluding domestic workers – registered a record reduction, less 2.6 million, a retreat of 7.8%, standing at 30.6 million people. The domestic workers (5.1 million) decreased by 19.2%, also the biggest retraction ever recorded.

The self-employed workers reduced by 1.5 million people, which added up to 22.7 million, a retraction of 6.2% over 2019. The number of those employed without a formal contract in the private sector (9.7 million) fell 16.5%, less 1.9 million people. Even the number of employers retreated 8.5%, standing at 4.0 million.

On the other hand, the informality rate changed from 41.1% in 2019 to 38.7% in 2020, which represents 33.3 million people without a formal contract – either employed in the private sector or domestic workers –, without a CNPJ – either employers or self-employed workers – or unpaid workers. Beringuy reminds that the informal workers were the first to be affected by the pandemic last year.

Another highlight was the record rise in the total number of underutilized persons, who are those unemployed, time-related underemployed or persons in the potential workforce. In the year, this contingent reached 31.2 million, the largest in the time series, an increase of 13.1% with more 3.6 million people.

Those discouraged – who gave up to look for a job due to the structural conditions of the market – reached 5.5 million people in 2020, a rise of 16.1% over the previous year. It is also the largest contingent in the annual series of the Continuous PNAD.

"With the economic impact of the pandemic, many people stopped to look for a job either for not finding it in the locality where they live or feared to expose to the virus. Along the year of 2020, we noticed that the population in the potential workforce grew due to the context. This process caused by the pandemic coupled with the structural difficulties to insert in the labor market may have reinforced the feeling of discouragement," stated the survey analyst.

In a year of widespread losses in the employment, the exception among the activities was public administration, which rose 1%, with more 172 thousand workers, leveraged by the segments of health and education. In contrast, construction closed 2020 with a loss of 12.5% in the employment, followed by trade (9.6%) and industry (8.0%). Services were also very affected, highlighted by housing and food (21.3%) and domestic services (19.0%). Other services reduced 13.8% and transportation, 9.4%. The lowest percentages were in agriculture (2.5%) and information and communication (2.6%), which also interrupted three consecutive years of increasing employment.

In 2020, the real average earnings of workers was R$2,543, a growth of 4.7% over 2019. On the other hand, the real wage bill, which is the total earnings of the workers, hit R$213.4 billion, a reduction of 3.6% over the previous year.

After hitting its highest level, unemployment drops in the fourth quarter

In the last quarter of 2020, the unemployment rate dropped to 13.9%, after hitting 14.6% in the third quarter ended in September, the highest level ever registered in the quarterly comparison. Despite of the retreat of 0.7 percentage points, Brazil still added up to 13.9 million people without a job. According to Beringuy, that reaction of the labor market was already expected.

"The retreat of the rate in the end of the year is a seasonal behavior, due to the traditional increase in the temporary jobs and in the trade sales. It is interesting to notice that the labor market reacted this way, even in a pandemic year," states the survey analyst.

The major highlights in the period were the increase of 10.8% in the contingent of those employed without a formal contract, which hit 10.0 million persons, and the total number of self-employed workers, which advanced 6.8% and added up to 23.3 million. In the same comparison with the previous quarter, those employed with a formal contract advanced 1.8%, hitting 29.9 million.

The percentage of informal workers also rose from 38.4% in the third quarter of 2020 to 39.5% in the fourth quarter. It comprises 34.0 million people, an increase of 2.4 million workers in the informality.

The result in the quarter was leveraged by the increase in the employment in nearly every activity group: agriculture (3.4%), industry (3.1%), construction (5.2%), trade (5.2%), housing and food (6.5%), information and communication (5.8%), other services (5.9%), domestic services (6.7%) and public administration (2.9%). Only transportation remained stable.