Many young people are forced to make a choice between study and work. Generally speaking, in all of the metropolitan regions that have been analyzed, the number of poorer young people who succeed in reconciling work and study is much lower than the number of young people from families with greater resources.

Employment in Brazil in 2005: Challenges and perspectives

Paulo César Pedrini*

President Lula’s promise to create 10 million jobs during his presidency has not come to pass.  The economic and political logic employed by this government that has as its primary target a trade surplus (which constantly breaks new records), shows that the priority is not the creation of new jobs, and even less a solution to the immense social problems of Brazil.

The issue of employment in our country is very far from being resolved; unemployment, reforms of social security (already carried out), reforms of union and worker organizations (to be carried out in the near future) threaten basic rights that have been gained by the working class over time.

One serious problem that worsens all the time in our country is what is called “outsourcing“. Before saying too much more about it, we should understand what it represents, and its perverse effects on the workers of Brazil.

Outsourcing is a management strategy characterized by the transfer of some service or the production of some product to another company, or external institution by means of a contractual agreement between the parties. The main kinds of outsourcing are: deverticalization, contractual use of services, franchising, purchase of services, third party representation, subcontracting, and permitting. Outsourcing is not an isolated phenomenon, but a management strategy linked to various contexts - political, economic, social, technological, and organizational.

Focusing specifically on its effects on workers, outsourcing is promoted as a factor in increasing flexibility, in the elimination of direct economic costs to the contracting company such as hiring costs, firing costs, training costs, and the expense of benefits packages. In the area of working conditions, outsourcing has obvious effects: unlicensed subcontracting, licensed contracting but without benefits, decrease in wages, generally worsened working conditions, employment under great pressure, loss of regular wages with corresponding increase in overtime, and deterioration of health and security in the workplace, amongst other things.

The main effects of outsourcing in Brazil were reduction of the direct influence of workers, disempowerment of workers, lack of organization for strikes, elimination of union action and elimination of worker action.

From the perspective of workers, the consequences of outsourcing are very serious, accentuating the differentiation between the contractor, the client, and the service providers. Union representation is also affected by this process, since in the majority of cases outsourced workers fall outside the coverage of representative union organizations within the contracting business.

These types of contractual relations have been a major concern for the union movement worldwide, given the brutal reduction in standards of employment and the increase in workplace deregulation. Outsourcing is not only constantly increasing in the private sector, but is also increasing in the public sector. As time goes by, the government contracts out more and more of the work previously done by tenured employees to temporary staffing agencies, for example.

In the area of unemployment, the greatest victims continue to be our young people. This is the conclusion of the research project “Youth: Diversification and challenges in the urban job market” carried out by the Department of Statistics and Socio-Economic Studies (Dieese).

Similarly, in the area of unemployment amongst the youngest, the reality is even more difficult for the most impoverished. In the past year, the level of unemployment amongst the poorest reached 58.5% in São Paulo. By comparison, the unemployment level amongst yoth from more well-off families is 22.1%. This research project took as a reference point the poorest 25% and the richest 25% of the population, illustrating the enormous level of social inequality in Brazil.

Unemployment in the age group from 16 to 24 years of age is almost twice that of the general population.  According to research carried out by the insurance company Cardif, on a scale from 0 to 10, the degree of anxiety about unemployment amongst young people is 8.5. One of the factors that triggers this degree of anxiety is inexperience, and yet it is absurd to expect work experience from someone who is just entering the workforce.

There is an important point arising out of this research, and that is the position of young women. Women are finding it increasingly difficult to obtain work. In the metropolitan area of São Paulo for example, 81.5% of young men find employment but for young women this number reaches only 72.2%. Despite this, we observe a significant increase in the number of young women looking for work in greater São Paulo: this number was 56% in 2004 but today it has reached 72.2%.

A very worrying issue is the fact that many young people are forced to make a choice between study and work. The period between the ages of 16 and 24 is the time when young people normally finish their academic programs and enter the job market.

Here again we see that the problems are much worse for the most impoverished members of society. Generally speaking, in all of the metropolitan regions that have been analyzed, the number of poorer young people who succeed in reconciling work and study is much lower than the number of young people from families with greater resources. This difference can be expressed numerically: in the metropolitan area of São Paulo, 13.4% of young people from low income families versus 8.7% of young people from richer families.

An even more serious issue is the increased number of young people who are unable to study and to enter into the workforce. The numbers below show the range of activity amongst young people in São Paulo.

In 2005, the research on employment and unemployment (PED) carried out by the SEADE foundation shows that the rate of unemployment, estimated at 17.5% in April decreased to 17.1% in the economically active population (PEA).

            The rate of unemployment decreased in the city of São Paulo from 16.2% to 15.4%; in the ABC area (Santo Andre, São Bernardo do Campo and São Caetano), from 17.1% to 16.8%; and registered a slight increase in the São Paulo metropolitan area from 19.2% to 19.4%.

Despite this slight improvement in employment, the government still has a major problem to resolve. The pressure to implement “reforms” is affecting workers in different sectors.

The neo-liberal reforms proposed by the Lula administration can generate protests against the government.  It appears that the government is now proposing a mini-reform of the unions, which would be a way to reduce resistance among workers, and will require less time and political negotiation for approval. In whatever shape, we believe that these reforms are a great threat to the working class, which must continue to mobilize against violations of their rights.

* Paulo César Pedrini is a historian, completing a Masters in  Social and Political History at PUC-SP and is coordinator of the Worker’s Urban Pastoral Project (Pastoral Operária Metropolitana de São Paulo) in  São Paulo.