Demographics and migration play an extremely important part in job markets worldwide.  Rafael De Filippis and Vitor Castro discuss the challenges for the future of work in Brazil.

Demographics and migration play an extremely important part in job markets worldwide. Migration, equality and issues relating to the age pyramid represent great challenges for the future of work, especially in developing countries like Brazil.

Discrimination

In 2015, female workers received 74.54% of the total wages earned by their male colleagues, according to the Brazilian Institute of Geography and Statistics (IBGE). When it comes to the pay gap on grounds of race, it seems that Brazil is doing even worse. Black workers got only 59.2% of the total amount paid to white workers in 2015. Although these percentages have been slowly improving from year on year in the last decade, these numbers demonstrate that there is still a lot of room for improvement.

According to a UN report on women earlier this year, some recent measures adopted by the Brazilian government are contributing to this improvement, such as the annual increase in minimum wages, social programs and the new legislation on domestic work. On the other hand, there is still much to be done – since few policies have been effective to reduce the discrepancies. In order to achieve equality in the future, the government will need to increase investment in social policies for women aimed at reducing poverty and social disparity. The lack of the right social conditions tends to be more burdensome to women, since they tend to be the ones in charge of household chores and taking care of children and elderly relatives, according to the UN.

With regard to the racial pay gap, the Brazilian government has been focusing on affirmative action in the last two decades. This has resulted in improvements in the quality of life of black workers, with increases in the access of services and rights, education and life expectancy. The creation of the Secretary of Politics on the Promotion of Racial Equality (Seppir), the enactment of the Statute of Racial Equality, the setting up of systems of racial quotas in universities and public service, and the yearly increase in minimum wages has been essential to this improvement. However, according to the Inter-Unions Department of Statistic and Socioeconomic Studies (Dieese) there is still much work to be done, since black workers are often allocated to positions of less prestige, involving physical deterioration and repetitive actions with little space for creativity. It is important that the Brazilian government continues to invest in affirmative policies in order to close the gap between races in Brazil, as per the conclusion of the Institute on Applied Economic Research in Brazil (Ipea).

Age Pyramid

The change in the age pyramid is another relevant issue in Brazil, but it does not generate much discussion or focus. Although this issue has been the focus of attention for some time in many European countries, it is only recently in Brazil that the population is becoming older, with decreases in the number of births and increases in the life expectancy rates. The numbers in Brazil are changing rapidly. In the last 60 years the number of people over 60 years old increased from 5% to 10%. In the next 40 years, projections say this will reach 30%. These rapid changes impact not only the labour market, but also social security.

According to a research carried out by PwC and Getulio Vargas Foundation (FGV), companies will have to put in place mechanisms to retain older professionals because of the difficulties in finding qualified professionals in the market as a result of the ageing population. This retention will also be necessary to balance social security expenses and the economy. However, 56% of the enterprises that were part of the research stated that have no program in place aiming at the hiring and retention of older professionals, and 56% stressed that age is still a relevant factor when they are recruiting professionals. The conclusion is that older professionals are still not seen as an alternative to the lack of qualified younger professionals in the market. Adapting to the new times with a change of mind-set is a challenge that companies will have to face in the not too distant future in Brazil.

Internal Migration

Although immigration is not such a hot topic in Brazil as it is the US and Europe, migration movements inside Brazil are still a relevant issue within labour markets. Currently, around 30% of the population in the city of São Paulo were born in the north and northeast regions of Brazil according to a study carried out by Ipea. This is due to the fact that most of the wealth and businesses of the country are concentrated in the southeast region, in the states of São Paulo and Rio de Janeiro, whereas many cities in other regions (especially in the north and northeast regions) have always suffered with high levels of unemployment and lack of basic services.

However, migration, together with the recent economic crisis, have ended up increasing the unemployment rates in the southeast region to 11.4%; very close to the 12.8% recorded in the first semester for the northeast region and higher than north region’s unemployment rates (10.5%). Also, these migrants often have the lowest attainment in education and receive the lowest wages in the region. They are also constantly victims of xenophobia and racism, due to the differences of culture, accent and physical attributes.

However, in the last few decades migration movements inside Brazil from the north and northeast regions have been decreasing as a result of the improvements to the Brazilian economy over the last few decades. The government has also created incentives to stimulate industrial growth in the northeast region and has also put in place public policies on urban and regional planning, which have ended up generating more jobs. Balancing migratory flows is very relevant to Brazil’s development and have an important reason why the government should keep investing in promoting it.