BRASÍLIA, October 16th, 2015 - In the past 15 years,
employment and earnings have grown significantly in Brazil, and the
labor market was the key driver for the sharp decreases in poverty and
inequality. To maintain social and economic development, and sustain the
accomplishments of the last decade, two goals should be at the center
of labor market policy: raising labor productivity and connecting the
poor to more and better jobs, says the World Bank report Sustaining Employment and Wage Gains in Brazil, launched yesterday, in Brasília, and today in São Paulo.
“The pace of job creation in Brazil has been faster than in most
countries over the past decade, and inequality reduction was
remarkable,” said Martin Raiser, World Bank director for Brazil.
“To sustain these gains in the face of less accommodating economic
conditions, Brazil will need to make its labor force more productive,
and to make sure the poor also benefit they will need to be better
connected with productive jobs.”
With the deceleration of China and the fall in commodity prices, the
external environment for Brazil has changed fundamentally from that
prevailing during the last decade. Slower growth is likely to exert
downward pressure on employment and wages. To succeed in these adverse
circumstances, labor market policies need to focus on investing in those
skills demanded by employers and on improving the match between labor
demand and supply.
Brazil has successes on which to build...
The report shows, for
instance, that employment and training policies in Brazil strengthened
the qualifications, employability and productivity of beneficiaries.
Moreover, Brazil’s focus on promoting employability and income-earning
opportunities for the poorest segments of the population delivers
important insights into ways to address the multidimensional
employability challenges of the disadvantaged.
“Brazil’s successes to date suggest incremental reforms may yield significant further benefits,” explained Senior Economist Joana Silva, one of the report’s lead authors. “For
example, strengthening information systems and tracking final labor
market outcomes could help improve the effectiveness of active labor
market policies. The adoption of a placement-focused management approach
in SINE- Brazil’s National Employment System; redesigning the
“Apprentice Law” to incentivize firms to offer better opportunities for
youth; and the adaptation of training and employment programs to the
varying profiles of targeted groups are some of the policies that can
contribute to raise labor productivity and connect the poor to better
jobs.”
The report commends Brazil for the dramatic expansion of access to
government funded training programs, particularly for the poor and less
skilled. In this area, too, additional steps could pay important
dividends. Enhancing the collaboration with the private sector in the
design of job relevant curricula, supporting more opportunities for
learning in the workplace and improvements in monitoring and information
systems to guide learning institutions, students and prospective
employers are among the measures suggested by the report.
“Brazil has made a tremendous progress in the expansion of
technical education and in increasing the access of the poor to training
opportunities,” said Senior Economist Rita Almeida, co-lead author of the report. “The
measures we propose aim to ensure that Brazil’s poor can continue to
transform their newly acquired skills into productive employment
opportunities and remain connected to the labor market.”
While highlighting Brazil’s successes and emphasizing the incremental
nature of the proposed reforms, the report cautions that labor market
policies and investment in skills alone will not suffice to address the
recent rise in unemployment. Improvements in the business climate and
the restoration of investor and consumer confidence are equally critical
to ensure a return to growth and job creation.
