Continuous PNAD

Unemployment reaches 12.6% in the quarter ended in April with record decrease in emplyoment

Section: Social Statistics | Umberlândia Cabral

May 28, 2020 09h00 AM | Last Updated: May 29, 2020 04h48 PM

#PraCegoVer A foto mostra alguns entregadores reunidos com suas bolsas de cor laranja, nas costas.
Of the 4.9 million workers that went out of the employed population, 3.7 million were in the informal market - Photo: Vinícius de Melo/Agência Brasília

The unemployment rate went from 11.2% to 12.6% in the quarter ended in April, reaching the figure of 12.8 million unemployed people. As a result, there are 898 thousand more people searching for a job, according to the Continuous National Household Sample Survey (Continuous PNAD), released today (28) by the IBGE.

An indication of the effects of the Covid 19 pandemic on the labor market is the fact that the employed population had a record drop of 5.2%, compared to the quarter ended in January. This represents a loss of 4.9 million jobs, which were reduced to 89.2 million.

Research analyst Ms. Adriana Beringuy explains that the effects were felt both among informal workers and workers with a formal contract. “Of the 4.9 million people who lost their josbs, 3.7 million were informal workers. Employment with a formal contract in the private sector had a record drop as well. We get to April with the smallest number of people with a formal contract: 32.2 million ”, she explains.

Among the informal workers, there are professionals without a formal contract (employees of the private sector and domestic workers), without CNPJ (employers and self-employed) or unpaid (contributing family workers).

Number of  workers in trade falls 1.2 million

The analyst also points out that the drop in the employed population was generalized, reaching seven of the ten groups of activities analyzed in the survey. Of the 4.9 million people who left the employed population, 1.2 million were in trade, 885 thousand in construction and 727 thousand in domestic services.

It was the biggest drop in domestic services since the beginning of the series, in 2012. According to Ms. Beringuy, the drop may be associated with measures of social isolation. “Several families may have dismissed their domestic workers because of the distancing issue. It is a very sharp drop ”, she analyzes.

With the record fall of the employed population, the real wage bill also had the greatest retraction in the time series. "It is a drop of 3.3%, which means that in one quarter the wage bill had a decrease of R$7.3 billion", comments the anlayst.

On the other hand, the average real earnings of the employed persons was estimated at R$2,425 in the quarter ended in April, being the highest in the time series. “This increase may be associated with the fact that informal workers, who earn less, were the group that most lost their occupation. Those who stayed were workers with relatively higher wages. Now there are less informal workers and the average income ends up being calculated based on those who remained in the labor market ”, she claims.

Workforce and the discouraged

The potential workforce, which includes people who were neither employed nor unemployed, but who had the potential to integrate the workforce, increased by 24%. There are 1.9 million more people in this situation.

“If, on the one hand, we had a very sharp drop in employment, there was also a record increase in the population out of the workforce, which was 7.9%. This caused an increase in the so-called potential workforce. Many people who are not employed, stopped looking for work, but they are there in the potential workforce, and, thus, contributed to this very important increase in the discouragement rate, which is growing again after a long stability”, adds the analyst.

The discouraged, a subgroup of people in the potential workforce, were estimated at 5 million, an increase of 7% over the last quarter. There are 328 thousand more people who are not employed but who, for some reason, are also not looking for a job. It is the largest number of discouraged people since the beginning of the time series.

“They are the people who, for example, do not look for a job anymore because: they do not have enough qualification; they are considered too young or too old; or did not have a  job offer in the region where they live. Therfore, discouragement has increased a lot ”, explains Ms. Beringuy.