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Factors Contributing to the “Discouraged Worker” (Desalento) Phenomenon In Brazil

Factors Contributing to the “Discouraged Worker” (Desalento) Phenomenon In Brazil

November 26, 2024

Moara Canova

It is projected that the number of individuals aged 60 and above in Latin American countries will have tripled by 2050. As population levels fall overall, this increased proportion of older people is likely to reduce the workforce, the rate of economic activity, and increase pressures on government finances (Travassos et al 2020).

However, this number does not tell the whole story. In Latin American countries, including Brazil, social and economic inequalities (Lima and Durán, 2021), repeated economic recessions, and above all the Covid pandemic have driven the “discouraged workers” phenomenon, where people of working age have lost confidence they will find work.

As Brazil has no compulsory retirement age, the total population aged 14 years and older (around 82% of the population) constitute the country’s labour force. This group includes the “active” population, comprising individuals engaged in formal and informal employment (101.8 million or 57.9%) and those who are unemployed but actively seeking employment and view their unemployment as temporary (7.541 million or 4.2%).

However, approximately 67 million individuals are classified as outside the workforce. This category encompasses those who are not actively seeking employment, such as housewives, school-age adolescents, retirees, and other individuals who are neither interested nor able to work.

Further, the category of potential labour force includes a subcategory of discouraged workers, in Portuguese called desalento.

This category includes people who are both willing and able to work but who ceased their job search due to the belief that they would not secure employment. The factors contributing to their discouragement include lack of available local work, inability to find suitable jobs, age discrimination (either being perceived as too young or too old), or lack of professional experience or qualifications. This category encompasses some of the beneficiaries of cash transfer programmes (IBGE 2024).

The pandemic saw a substantial decline in employment, both formal and informal. The informal workers, often trapped in precarious circumstances, have been more frequently excluded from the labour market, exacerbating the phenomenon of discouraged workers. Conversely, the more advantaged (privileged) group categories experienced fewer job losses and found new work sooner (Razafindrakoto, Roubaud and Saludjian, 2023).

During the pandemic, the percentage of discouraged workers rose from 4.1% in 2019 to 5.6% in 2020, slightly falling to 5.5% in the first quarter of 2021 (IBGE, 2024). In 2024, the Institute of Applied Economic Research (IPEA) announced that the unemployment rate had decreased and that the rate of discouraged workers had fallen to below the 2019 level. However, the rate of discouraged workers remained mostly constant since 2015.

Currently, the category of discouraged workers encompasses approximately 3.1 million individuals or 2.9% of the Brazilian labour force. They include the most vulnerable people in Brazil, in particular, female, non-white, rural, less educated, and impoverished (Bouvier et al, 2022). A significant proportion of discouraged workers are middle-aged women. Melo and Thomé (2018) posit that the largest concentration of female labour is in paid occupations in the care and domestic services sector. Women who had lost their jobs during the pandemic found it difficult to return to the labour market, as many of them took primarily care responsibilities in their families (Neves, 2020).

Challenges posed by the pandemic highlighted the issue of precarisation. The post-pandemic recovery phase did not immediately improve the situation for disadvantaged groups. Despite the gradual return to employment, the positions of discouraged workers did not improve (Razafindrakoto, Roubaud and Saludjian, 2023).

The Brazilian government have been implementing public policies and interventions, which can stimulate the return of those workers to the labour force.

The Quota Law for People with Disabilities (number 8,213/1991) is now 29 years old. The legislation requires companies with 100 or more employees to reserve jobs for this demographic (Brasil, 1991). According to the Brazilian Institute of Geography and Statistics (IBGE), 45 million people in Brazil have some form of disability. This legislation is designed to address the issue of job insecurity experienced by individuals with disabilities (Brasil, 2022). Furthermore, the government has incorporated Law 14992/2024 into the existing legislation to enhance the recruitment of individuals with autism spectrum disorder (ASD) (Brasil, 2024).

The Minimum Wage Valuation Policy has been devised to facilitate a genuine increase in income that exceeds inflation. This policy contributes to the reduction of social inequalities, thereby encouraging individuals to seek formal employment. In a recent publication, the Ministry of Labour and Employment presented a work plan for the year 2023 (Neumark, 2024; Ministry of Labour and Employment, 2023).

The Workers’ School 4.0 (Escola do Trabalhador 4.0) was launched in 2021. It is a collaborative initiative between the Ministry of Labour and Employment, which has formed a partnership with state and municipal agencies and the technology company Microsoft. The programme provides complimentary online courses teaching fundamental digital literacy and more sophisticated IT competencies. A total of 5.5 million scholarships will be provided in the field of information technology (IT), with 1.5 million inscriptions to date. Since 2023, 70 collaborative agreements have been established with state governments, municipal authorities and civil society organisations to provide access to digital resources, including the internet, computers and monitors, in public spaces. The target audience for the training includes women of ages from young people to elderly people (Ministério do Trabalho e Emprego, 2024). As reported of Softex, a non-profit organisation that promotes technological innovation and manages the Escola do Trabalhador 4.0 in Brazil, by 2023, 40% of those trained were women with approximately 14% of all trained subsequently employed.

As this is a relatively new programme, we know little about its impact on the employability of the target audience. Nevertheless, the government of Brazil estimates that 8.5% of workers in vulnerable situations (consequently the discouraged ones) in Brazil could potentially benefit from the programme (Ministério do Trabalho e Emprego, 2024).

Furthermore, given that Brazil has approximately 7% of its workforce in teleworking roles, and that 39% of these individuals are between 40 and 59 years old, with 7.5% being over 60 (IBGE, 2023), it can be inferred that the Escola do Trabalhador 4.0 programme may contribute/stimulate to the professional training of those are currently facing professional discouragement in this age group.

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