In 2003, the number of companies at work in Brazil reached 4.7 million, of which 3.2 million were formed only by the owner and 1.5 million (31.7%) had registered employees. In 1996, active companies amounted to 2.9 million and those with employees to 992 thousand (34.1%). The data are part of the Statistics for the Central Register of Enterprises, by IBGE, which focused on the analysis of companies with employees in 2003. It was observed that , between 1996 and 2003, Industry remained as the main economic activity, but reduced its contribution in terms of jobs and salaries. The participation of industry in employment expanded by 6.4 percentage points considering companies with up to 29 employed persons. The average salary fell by 11%, from R$590.00 to R$ 525.29.

In seven years, number of employees in companies grows by 28.3%

The Central Register of Enterprises is based on the economic surveys of IBGE in the fields of industry, trade, services and construction, and on the Annual Listing of Social Information (RAIS) of the Ministry of Work. In 2003, it showed there were 5.2 million companies legally at work and registered in the National Directory of Legal Entities (CNPJ) in 2003. Out of this total, 90.2% (4.7 million) were companies, 0.3% were organizations under public administration and 9.5% were non-profit organizations. Together, these employed 35.7 million people, of which 28.5 million (79.8%) were salaried and 7.2 million (or 20.2%) were business partners or owners.

Salaries paid in 2003 amounted to R$ 341 billion and the average monthly salary was equivalent to 4 minimum salaries in effect then. Among the 28.5 million salaried persons, almost 67% (or 19 million) worked in companies, whereas 33.1% were in either public administration or non-profit organizations. In comparison with 1996, when the total of employees in companies was 14.8 million, the increase was 28.3%. It is observed that, between 1996 and 2003, the participation of public administration was reduced by 1 percentage point, from 26.2% to 25.2%.

Trade has more companies, Industry more employees and Financial Mediation pays better

Both in 1996 and in 2003, considering the number of companies, the main activity was Trade (48.4 % and 52.2% of the total), followed by Manufacturing Industry (16.8% and 14.9% of the total) and Real Estate Activities, Rents and Services rendered to enterprises (9.1% and 8.8% of the total).

In terms of salaried persons, the major participation is that of Industry, in both periods analyzed (32.6% and 29.9%). Trade (21.9% in 1996 and 25.8% in 2003) was the activity with most development (3.9 percentage points) in terms of salaried persons, influenced, above all, by Retail Trade, which grew from 14.1% to 17.4%.

Another activity with significant expansion (2.6 percentage points) in employment was Real Estate Activities, Rents and Services rendered to enterprises, which increased from 10.4% to 13% and whose main highlight was Services rendered to enterprises (from 8.5% to 10.9%). Together, the three main activities were responsible for almost 65% of the total number of employed persons in 1996, and for 68.7% in 2003.

Despite being the main employing activity, Industry reduced is participation in terms of number of employees by 2.7 percentage points between 1996 and 2003. The fifth most important activity in employment, Construction, is the second in with more losses in terms of employed persons in the period analyzed, going from 6.2% to 5.4%.

As for salaries paid, the importance of Industry is seen again. Although its relative participation has been reduced by 2.8 percentage points between 1996 and 2003 (from 38.4% to 35.6% of salaries), it remains as the principal activity, concentrating more than a third of the total salaries paid in the periods considered. Trade, the second activity in terms of salaries, increased its participation by 2.6 percentage points (from 13.8% to 16.4%). However, its contribution to the total number of salaries still represented less than half of that given by Industry. 

In companies, the average monthly salary paid in nominal terms was, R$590.00 in 1996 and R$ 859.00 in 2003. In real terms it was R$ 525.2 in 2003, which represents a reduction of 11%. In terms of quantity of minimum salaries, there was reduction from 5.5 to 3.7 between 1996 and 2003.

In the period analyzed, the highest average salaries were found in Financial Mediation, Insurance, Complementary social security and Related services (R$1,627.00 and R$ 1,438.00), followed by Production and distribution of electricity, gas and water, with R$1,614.00 in 1996 and R$ 1,377.00 in 2003. Both in 1996 and in 2003, Fishing (R$ 313.00 and R$ 255.00 ) and Lodging and Feeding (R$254.00 in both years) paid the lowest salaries.

Manufacturing industry

, the fourth activity in terms of highest average salaries in1996, fell one position and is now the fifth in the ranking (from R$695.00 to R$ 626). The average salaries paid by Trade remained on the twelfth position in the period. Although significant, the difference between the highest and the lowest average salaries, by economic activity, decreased between 1996 and 2003, going from 6.4 to 6.1.

Big companies still offer more jobs and pay better, but even so lose market to smaller ones

Considering the size of companies, salaried persons and the total amount of salaries were concentrated in big companies (with 100 or more employed persons). In 2003, these were responsible for half of the formal employment and for almost 69% of the salaries paid by companies. However, between 1996 and 2003, there was reduction by 7.0 percentage points of participation of employed persons in big companies, from 56.9% to 49.9%, whereas in those companies with up to 29 employed persons, there was increase of 6.4 percentage points (from 27.7 to 34.1%).

In relation to salaries paid, the increase of the participation of companies with up to 29 employees was lower (5.6 percentage points) than the increase observed in relation to employment, from 13.0% to 18.0%. In companies with 100 or more employees, the concentration of salaries paid remained high (from 76.0% to 68%), despite the reduction of 7.6 percentage points. Although the concentration of higher salaries occurs in bigger companies, the difference between these and those with up to 29 employed persons decreased from 2.85 times in 1996 to 2.52 times in 2003.

On average 100 thousand companies with employees are created and 58 thousand are closed annually

The study of the demography of companies [1], which quantifies companies open and extinct, revealed that, between 1997 and 2003, there were, on average, 620 thousand new companies a year. Other 427 thousand were extinct, resulting in a real increase of 193 thousand companies.

In the group of companies with employees, the annual averages were 100 thousand births and 58 thousand deaths, resulting in a total of 42 thousand new companies. The annual average rate of birth, which measures the quantity of companies that appeared in relation to those already in existence, was 8.3%, whereas the rate of death (how many were extinct) was 5.0%. In the group with up to 99 employees, births surpassed deaths, whereas in companies with 100 or more employees, the opposite happened.

Trade

was the major responsible for the higher number volume of births (50,316) and deaths (27,647) of companies between 1997 and 2003 ,whereas Industry presented the lowest results: 13,074 companies were created and 9,209 extinct. The subsector of Services created 23, 561 companies and extinguished 13,973.

Reduction in the percent participation of RJ and SP in the number of establishments and jobs

According to regional data, it is observed that, although it concentrates the major number of establishments in the country, the Southeast region was the only one to reduce its national participation, changing from 57% in 1996 to 52.2% in 2003. This behavior reflects the reduction by 3.2 percentage points in São Paulo and 1.9 percentage point in Rio de Janeiro. The remaining regions increased their participation, and the major increase (1.8 percentage point) occurred in the Northeast, influenced, mainly, by the states of Bahia (0.7%) and Ceará (0.3%).

As for the regional distribution of salaried persons, there was fall of 3.5 percentage points in the occupation of the Southeast region (from 60.5% to 57%), as a consequence of the reduction of the percent participation of São Paulo in formal employment (from 36.5% to 33.7%), where industry has a very big importance, and in Rio de Janeiro (from 11.9% to 10.6%).

Minas Gerais and Espírito Santo, on the other hand, increased their participation both in terms of number of establishments and in terms of number of employees. With the reduction in Rio de Janeiro, and the growth of formal employment in Minas Gerais, both states presented the same rate of participation in terms of employed persons (10.6%).

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[1] This study does not include Public Administration and Non-Profit Organizations, only companies.