Unemployment Rate in Brazil - Research Paper Example

Unemployment Rate in Brazil s Affiliation Introduction Rate of unemployment is a measure of the number of persons that are unemployed as a proportion of labor force: the overall number of unemployed people plus employed people. Unemployment rate has been increasing in Brazil. It rose to 5.90 percent by February 2015 from a mere 5.30 percent in the previous month of the year 2015. The rate of unemployment in Brazil averaged to around 8.42% from 2001 to 2015. It reached its maximum rate of 13.10% in 2003 and a minimum rate of 4.

30 percent in 2013. According to Tradingeconomics.com, the graph of unemployment in Brazil has been experiencing a steady trend in 2014. Nonetheless, this was not true in 2015 as depicted in Figure 1 below. The country’s unemployment rate shoot to the uppermost level in January, causing pressure on Brazil`s president, Dilma Rousseff, since her government was now increasing taxes but reducing its spending. The unemployment rate in six major metropolitan regions in of Brazil rose to 5.3% by that time, compared with only 4.

3% by December of 2014. That was greater than economists’ projection of 5%. It was also the highest rate since September 2013. Brazil’s resilient labor market is one of the handful economic bright spots after eons of lukewarm growth and high rates of inflation. The country`s current president was re-elected partly because she campaigned on low unemployment as her strong selling points. However, the upsurge in unemployment is expected to hurt her approval rating, implying that she will have less support from the legislators for government projects.

The government is increasing taxes while reining in spending so as to lessen its budget deficit. The government has also proposed policies to unemployment as well as retirement benefits in order to help cut costs. However, the changes must be ratified by Congress, and augmented rates of unemployment could encourage legislators to challenge such measures. The country’s labor market has largely disobeyed economists’ projections that a slow economy would cause job cuts. Inflexible hiring and firing regulations, together with demographic changes, assisted to mitigate the impact.

Certain economists estimated that Brazil’s gross domestic product got unchanged last year, and they are even forecasting that the GDP will shrink by 0.5% in 2015. It’s not a secret that the rate of unemployment is swelling as a result of poor economy undertakings. The scenario is expected to worsen even more. The drop in labor market was occasioned by the decline in employed population – currently flat in yearly terms — and by a 3.9% decline in unemployed persons (-11.6% annual).  This combination dragged the rate of participation down to 55.

9 percent from the 56.1 percent in February this year, which is the lowest level ever since 2002. References Agenor, P. (2006). Adjustment Policies, Poverty and Unemployment. Oxford: John Wiley & Sons. Marshalle, M. I. (2006). Economics of unemployment. New York, NY: Nova Science Publ. Organisation for Economic Co-operation and Development. (2010). Tackling inequalities in Brazil, China, India and South Africa: The role of labour market and social policies. Paris: OECD. Berg, J., Ernst, C., & Auer, P. (2006). Meeting the employment challenge: Argentina, Brazil, and Mexico in the global economy.

Boulder, Colo: Lynne Rienner Publishers. Organisation, . E. C.-D. (2009). OECD Economic Surveys Brazil 2009. Paris: Organisation for Economic Co-operation and Development.