Unemployment grows in the North and Northeast after reduction of emergency aid – 10/16/2020 – Market

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The number of Brazilians without a job in search of a job increased by 700,000 between the third and fourth weeks of September, totaling 14 million unemployed in the country.

This increase coincides with the period in which the reduction of emergency aid began from R $ 600 to R $ 300 and was pulled by the North and Northeast regions, exactly where there is a greater number of aid beneficiaries.

The data are from Pnad Covid and were released on Friday (16).

Together, there was an increase of 12.3% in the contingent of unemployed in these North and Northeast regions – almost seven times more than that observed in the South, Southeast and Midwest. Altogether, these three regions recorded an increase of 1.8% in the unemployment rate.

In total, the unemployment rate reached 14%;

Although the number is the largest contingent in the historical series of the survey, which started in May this year to monitor the market in the Covid-19 pandemic, IBGE technicians consider that there was “stability” in comparison with the previous week, which was 13 , 3 million unemployed, with an unemployment rate of 13.7%.

According to the research coordinator, Maria Lucia Vieira, the data only suggest that more people are putting pressure on the market in search of work, amid the easing of social distance measures and the resumption of economic activities, but without a major impact on the final result.

“We have been observing, in the last four weeks, positive variations, although not significant in the employed population. In the fourth week of September the variation was negative, but without any effect on the unemployment rate”, said Maria Lucia Vieira.

Rodolpho Tobler, an economist at Ibre (FGV), explains that the 700,000 increase in the number of unemployed is considered stable due to the weekly character of the IBGE survey, which works with a margin of error. Even so, he pointed out that growth has been a trend, especially in the regions most benefited by the aid.

“In the North, the IBGE considers an increase, even with the margin of error. This trend has also been noticed in the Northeast,” said the economist.

He assesses that the flexibility in the quarantine also contributes to people returning to work and looking for a job – and, thus, to be considered unemployed, according to the IBGE methodology -, but that in September the boost in the unemployment rate is largely due to the reduction aid in half.

“It makes sense for these two regions to get the result, since most of the people in these regions received aid, and without it the budget tightens. The R $ 600 may seem little to some, but it helps others to pay their bills on a daily basis, the cut brings the need for people to look for jobs, “explained Tobler.

According to him, before, Brazilians who received full aid had a subsidy that allowed them to stay at home, without the emergency need to look for a job. “When the benefit falls by half, people start looking for work again, this should be a trend in the coming months”.

However, even with the gradual return of people to the search for an occupation, this demand should not be converted into jobs, since the service sector, one of the most employed, still has difficulties to return to the pre-crisis level.

“Returning is not simple. Companies are still unable to absorb these people. Returning has not been easy, especially for informal people. People will look for jobs and not necessarily get it at the first moment”, pointed out the FGV-Ibre economist.

The payment of the sixth installment of emergency aid (the first with a reduction to R $ 300) began on September 17 for beneficiaries of Bolsa Família. Mothers responsible for supporting the house still have the right to a double quota, now R $ 600 – before, it reached R $ 1,200.

Of the 16 states in the North and Northeast, nine have 60% of households on the list of beneficiaries of emergency aid. In the remaining seven states, more than 50% of households receive the benefit.

This level of income impairment in relation to aid does not occur in other regions. For comparison, in the South these percentages fall to less than 30% (in the case of Santa Catarina and Rio Grande do Sul) and 36.2% (Paraná ).

In absolute numbers, the unemployed in the North went from 974 thousand in the third week of September to 1.3 million in the following week. In the previous weeks, the scenario was one of stability or even decline.

In the Northeast, the increase was from 300 thousand – from 3.6 million to 3.9 million – an increase considered stable by IBGE.

At the same time, the labor force participation rate in both regions increased, signaling that people are looking for work again. In the North, the percentage was 54.5% to 55.2%. In the Northeast, from 48.1% to 49%. There was also a marginal increase in the Midwest. However, in the Southeast and South what we saw was a retraction.

The emergency aid, initially, would have three installments of R $ 600, paid as of April. At the end of June, the government announced an extension for two more payments, totaling five installments of R $ 600. At the beginning of September, another extension was confirmed, this time for another four installments until the end of the year, totaling nine payments.

MP (Provisional Measure) nº 1,000 / 2020 also reduced the monthly benefit amount, from R $ 600 to R $ 300, and created tougher rules for the permanence of beneficiaries (with the exception of those receiving Bolsa Família).

Pnad Covid was created to calculate the effects of the pandemic on the labor market and cannot be statistically comparable to Pnad Contínua, which calculates official employment data in the country. In the last release, of the quarter ended in July, the unemployment rate hit a record and reached 13.8%, with 13.1 million in line for a job.

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