Discrepancies, in these first months of the year, between the numbers of the Caged (General Register of Employed and Unemployed), which captures the data of formal employment, and the results of the Pnad Continuous (National Survey by Sample of Continuous Households), which gathers information about the group of people of working age, are perhaps the best example of these difficulties in the interpretation of labor market indicators.
According to Pnad Contínua, the unemployment rate, in the quarter ended in January, of 14.2% of the workforce, released on Wednesday (31) by IBGE, is the highest, for the period, since the beginning of the current series, in 2012. For experts, the situation is expected to get even worse in February and, possibly, at least until the end of the first semester.
“Adjusting the unemployment series for a longer period in time, I found that the rate for the quarter, for quarters ending in January, is the highest in almost 30 years”, says economist Bruno Ottoni, researcher at the consultancy iDados. More worrisome, for him, is that, to normalize the market, vacancies remain to be opened for almost 6 million workers who left the market in the last 12 months. “As there are many people to return to the workforce, and the formal market is being insufficient to absorb it, the trend, at least in the coming months, is to increase unemployment and informality”, he concludes. Brass.
According to Caged, on Tuesday (30), in February, 410.8 thousand new jobs were created in the formal labor market, “record for the month in 30 years”, as celebrated by the Minister of Communications, Fábio Faria ( PSD-RN). For the Minister of Economy, Paulo Guedes, this result, which raises the generation of new vacancies to more than 600 thousand in the first two months of 2020, “we must admit that the formal labor market is recovering at a very high speed”, trumpeted Guedes .
Despite the glaring differences, none of these indicators is wrong or has been manipulated. They reveal, correctly, the information that the adopted methodology allows to capture. By focusing on the formal employment sub-market, the one in which employment contracts are governed by CLT (Consolidation of Labor Laws), Caged gives a partial picture of the labor market, while Pnad Contínua covers the market as a whole .
Pnad Contínua covers the group of people of working age, bringing together the employed – with a formal contract, self-employed, employers and informal workers – and unemployed. It also portrays the group of underutilized workers – who work less hours than they could – and the discouraged ones – those who, of working age, have stopped looking for an occupation.
In the Brazilian labor market, currently, about 60% of jobs are considered formal, while the remaining 40% are informal. But, as it is almost entirely restricted to jobs under contracts governed by the CLT (Consolidation of Labor Laws), Caged portrays the situation of no more than a third of the market. Formal employees outside Caged are civil servants, employers and self-employed workers.
Also, the IBGE unemployment rate does not give the true dimension of the current difficulties in the labor market, especially in times of pandemic, when there was a marked reduction in the number of people of working age in the workforce. Considering the participation rate prior to the pandemic, the unemployment rate today would be 21.2%. The number drops to more than 25% if the discouraged are included – those who are not even looking for occupation. In addition, the rate of underutilization of labor, which accounts for workers who could and would like to work more hours per week, amounts to almost a third of the workforce
To further complicate matters, Caged has recently undergone significant changes in the methodology for calculating data. Until 2019, companies were legally required to send to the Ministry of Labor – today the Department of Labor, of the Ministry of Economy – monthly forms with information on the admission and dismissal of employees, gathered in Rais (Annual List of Social Information). As of 2020, Caged began to be powered by eSocial’s computerized data. In addition, it became mandatory to inform the hiring of temporary workers.
The change, according to experts, is good and will give more consistency, confidence and credibility to the data provided. But, the series “broke”, what is clear today is different from what was collected before. Therefore, comparing the data from the new series with the data from the old series can lead to serious analysis errors.
This is evident in a survey by Ottoni. In a period that could be called transition, data from Caged were published both based on information from Rais (old series) and eSocial (new series). The difference found by Ottoni between the results of the two series was significant.
In the accumulated period from April to December 2019, a period in which the government published data from both series, the balance of hiring totaled 410.8 thousand new formal jobs, according to the old series, and 715.1 thousand, for the new series . The difference, of 304.3 thousand jobs created, caused the new series to increase by 74.1%, in comparison with the old series.
“The new series is generating larger balances”, says Ottoni, but the researcher points out that it is still too early to conclude that the new Caged is “boosting” the data. “In addition to being a series that is still very short, the instabilities and turbulences of this pandemic moment call for caution in the conclusions.” For Ottoni, everything considered, the set of information provided by Pnad Contínua allows a more consistent reading of the dynamics of the labor market than that offered by Caged.
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