Wages Rise Much More than Productivity in Brazil

10/07/2013 - 08h35

Although economic growth is stagnant, workers' wages, especially among those with lower income and qualification, are growing quickly in Brazil.

Data of Pnad 2012 (National Household Sample Survey) show that per capita income grew 8% last year. Workers' income - wages - led the rise. They were responsible for 74% of the increase.

It is occurring in the low G.D.P. year, in which the economy has grown 0.9%.

That means that the rise of Brazilian wages doesn't correspond to an increase in productivity - companies are using their profit margin to pay higher salaries.

The National Confederation of Industry (CNI) says that, in factories, for example, real wages rose 169% between 2001 and 2012 -- productivity, however, only 1%. Flávio Castelo Branco, the executive manger of CNI, says that means losses and an increase in costs.

SHORTAGE

Poorer workers have had higher salary increases. In 2012, income grew 14% among the 10% workers with the lowest salaries and 20% among the 5% poorest.

Workers with no schooling, those who finished only elementary school and those from northeastern Brazil also had increases above average, respectively 10%, 9.4% and 11%.

The reason for that is a supply and demand issue. The demography of labor with little training is changing in Brazil.

Brazilians' average school years have been growing quickly. In 20 years, it has increased from six to nearly nine years.

Private institutions have made college education more accessible. In 2001, there were 3 million students, and in 2012, 7 million.

That has reduced the "stock" of workers with low qualification, especially in times of low unemployment, when there is no "spare" labor available.

Translated by THOMAS MUELLO

Read the article in the original language