Unemployment in Brazil

If unemployment and capitalism are inseparable, the current rates of unemployment are alarming and affecting the entire society. On one side are people who cannot get jobs and on the other side are the ones who fear losing their jobs. The consequences of unemployment for the individual are associated with factors such as the duration of unemployment, and also the age of the unemployed. In Brazil, the legal age to begin working in the labor market was raised from 14 to 16 years of age a few years ago. This change relates to unemployment’s problems and the issues associated with it. Companies tried to replace workers with adolescents and young adults, which limits the labor market for people over 40 years (or even younger than that). On the other hand, the priority to get an education has become stronger among young people. At the same time, the age limit for retirement has increased. For example, there is the crisis of pension systems in Brazil and worldwide, as the author Paul Krugman (1999) states, “For countries like Brazil and Korea, it must seem like a nightmare: after all they’ve done, they’re going through the 1990’s crisis all over again.”(247).
Unemployment has common consequences, such as depression, low self-esteem, decreased job security for low-income people, etc. The psychologist Sandra Caselato found that many people do not accept that they are experiencing psychological problems. She also noticed the demand of suicide as the only way founded to avoid problems, and it’s becoming increasingly common. According to the psychologist, the reasons that lead people to think about suicide are diverse, but for Sandra, a professional psychologist can help the patient find another solution to avoid these extreme cases.
Rich countries tend to point out three major cases of unemployment: new technology, cheap importation of goods and the immigration of cheap labor. This diagnosis results in three dangerous policies: the technology control, the protectionism, and containment measures of migration. The British weekly magazine The Economist defends the idea that the argument is based on a fundamental flaw of thinking: suppose that output is constant (zero growth) and therefore, the stock of work to be distributed is fixed. This assumption contradicts the facts: in the United States, productivity, employment, and product have grown since 1880 and unemployment was stable. The three defendants were guilty only in a world where all needs and desires have been satisfied, which does not exists (THE ECONOMIST, 1995)
One of the consequences of unemployment that is not always published concerns the motivation to go out and find a new job. A significant portion of the unemployed end up feeling demoralized after several unsuccessful attempts. There are several types of unemployment: one of them is “Technological Unemployment” BRAGA (1999), which is when the workers do not have the technical requirements needed for education or jobs, such as migrants from rural to urban areas and a portion of low-income population in large cities. In these cities, there are firms that adopt technologies and administrative methods that require a minimum education. The other part relates to the professions and specialties overtaken by technological change, making them useless for the professional production today. This type of unemployment stood out a lot with the technological changes of the last two decades throughout the world, and is affecting Brazil. There is also the “Normal Unemployment”, which occurs in the transition from one type of job to another. People who lose their jobs do not always immediately find another one. There is a difficulty in adapting until the replacement occurs.
In Brazil, the data from the Federation of Industries of Sao Paulo (FIESP) are presented as alarming, except for two short periods, from July 1991 to January 1995, the closing cash balance are high and negative (-120,000 to – 60,000 in January 1991 and August 1995). But the overall statistics of unemployment published by DIEESE show that this numbers do not grow, on the contrary, they can even decrease. The series of monthly rates of unemployment in the big city of Sao Paulo overlaps two tendencies: an economic cycle of 10 – 12 years, with unemployment falling from March 1985 to December 1989, increasing from January 1990 to March 1993, and then declining since then. There is a tendency for the unemployment rate to remain around 10%. It is worth to point out a recent surprising phenomenon: the Institute of Applied Economic Research (IPEA) indicates that the income stopped focusing. Even though the fact should be credited to the end of inflation and not to improving the economy, continues to confirme the thesis that, in Latin America, globalization means greater inequality. In general, globalization generates, in developing countries, new opportunities but also great challenges. On the positive side, international integration carries wider markets for trade, greater diversification of assets, more private capital inflows and greater access to technology. However, new opportunities are accompanied by new challenges in the area of economic management. The new possibilities favor the ones who are more agile, and the volatility of capital flows complicates the economic policies of developing countries. The success of macroeconomic policies brings greater rewards; for example, more advances in technology cause unemployment to decrease as opposed to undercapitalized nations. (THE STATE OF SAO PAULO, 1996)
Colbert, a finance minister of Louis XIV, said to an inventor who brought him a new weaving machine: “I am searching a way to occupy the population in order that each one can live with dignity of their work and do not take the population the little occupation that they have. Take your machine to another country, where there are arms to work on it.”(SAUVY 1980). History has confirmed the fears of the minister. The idleness of human resources does not seem greater today than in the seventeenth century.
The "compensation theory" is to study the impact of technology raises the long-term employment and may be formulated in the following proposition: the direct negative effect of the introduction of progress is offset by growth in indirect employment. International comparisons allow us to suggest that there is no necessary correlation between advanced technology and high unemployment. Economies more advanced in terms of technology have lower unemployment than countries almost totally undercapitalized.
There is a Brazilian institution named “Unemployment Insurance” that despite being an institution supported by workers as a social right in Brazil, the benefits received during unemployment are pointed out as another possible reason that push the unemployment rate to remain above the natural level. Moffitt and Nicholson (1982) developed a theoretical model in which the individual maximizes their utility as a function of two factors: income and unemployment. Unemployment brings benefits to the individual because it increases the time available for their hobbies and also to demand a more active and efficient search for a better job. For Nickell (1979) benefits received by the unemployed may increase unemployment in two ways: they may make unemployment more attractive, leading employees to change their situation of employed to unemployed, and they can increase the average time of been unemployed. Another reason for remaining unemployed is because the unemployment check may be higher and the unemployed become more demanding by not accepting any job offer that is offered to them.
One other problem that unemployment causes is the psychological instability that arises from the lack of financial resources and the social and psychological aspects of the individual to cope with the condition of being unemployed. It is up to the society to minimize the suffering caused by unemployment, and discuss new forms of social integration, especially for the less favored population who are excluded from our country because they are the ones who suffer the most from the unemployment crisis and live in a constant social risk situation. We need to debate about the construction of a new labor market and new ways of working. But we cannot forget the key role that politicians have to discuss the problems and promote alternatives. One that is very important is to get a social reform, which aims to citizenship for all along with education, health and work. Thus, before the elections we must examine the proposals of the candidate, and after the elections we must follow the development of the proposals; it is not enough just to vote, we must participate!
The conclusion of this paper, proposes some challenges that have marked the ethical reflection on unemployment in the country and the world. Regarding Brazil, perhaps the most striking conclusion that can be reached is that the country, even having shortage of capital for investments and investments in education, can generate results much more expressive. It is in this context a reflection on the ethics and management of resources for education that, according to government reports, they can and should be applied so as to meet the needs of citizens.
As cited earlier, three centuries ago, the Minister Colbert prohibited the installation of new weaving machines in France to maintain the level of employment. The country that practiced such a strategy today should be protected from international competition and the protectionism will lead to backwardness and isolation. The fact that the machine dispenses the man of unhealthy and repetitive tasks should not be viewed only on the negative side of unemployment; it also frees the worker for more creative tasks and provides more leisure time. In this sense, retraining programs for those who are likely to adapt can minimize unemployment adaption.
The institution of the minimum salaries is increasingly questioned as a tool for redistributing income and protecting the poor people. However, a World Bank study suggested that the minimum salaries in developing countries have not helped in terms of justice. Only the growth of per capita income can increase real salaries. All productive activity involves a risk of failure, which can be reduced but never eliminated completely. Who should take the risk? The government? The employer? The employee? The distinction is clearly functional, since it generates unemployment and bankruptcy that workers also pay taxes, should, however, put the issue in clear terms. The stability of employment and the irreducibility of salaries transform manpower in fixed costs.
The risk of joining the army of unemployment is one of the most common sources of stress in modern societies. But not always this fear arises spontaneously and is presented as a real risk. The Committee for Justice and Peace of Belgium highlights a paradox: the less people are at risk, the more they feel threatened. Although the current levels of unemployment in Brazil are equivalent to approximately ten years ago, there was an increased feeling of insecurity.
Every kind of tax will become more effective with regard to its institutional objective, when a person’s form of collection occurs as transparent as possible, especially those that focus on how much they will be paid. Instead of these contributions be paid by companies, the charges should be paid by the workers. From an accounting perspective, there would be no difference. Realizing the service purchased, the employee will charge its use. Remember, the informal work is an unfair competition to the formal sector. However, repression is impossible but also undesirable, since the informal sector constitutes an escape valve to structural unemployment.
In the previous industrial society, the work not only represented as a way of living; it was also the main factor of the individual's insertion into the community. Our society could no longer be a society where labor is the main factor of social integration. We still, however, to invent a civilization of free time.