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Freelancing Option May Be 'Running Out', Says IBGE

06/30/2016 - 10h50

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BRUNO VILLAS BÔAS
FROM RIO

An escape valve for those who have lost their jobs in the economic crisis, freelancing may be "running out" as an option according to Cimar Azeredo, IBGE's Employment and Income Coordinator.

In the quarter that ended in May, there were 22.97 million people working independently for themselves, 1.3% less than three months earlier. This is equal to 314 fewer workers, the largest drop registered since the February to Abril 2014 period.

An obvious explanation for the shrinking numbers is that the crisis has hit self-employed businesses hard. Former employees that opened their own business using FGTS unemployment insurance may have simply closed.

The self-employed have very diverse professions: masons, ambulatory sales, accountants, dentists, journalists. According to IBGE's methodology, they have no employees or paid assistants.

"Self-employment has traditionally been a channel that absorbs people who lose their jobs. If 1.5 million people lost their formal jobs, self-employment would grow in the same proportion. This doesn't happen anymore. This time, things are more complicated" he said.

One of the potential consequences of this reduction in the escape valve is an increase in the number of people looking and waiting for a job. This will put even more pressure on the labor market.

According to data released by IBGE on Wednesday the 29th, the unemployment rate was at 11.4% in the quarter that ended in May of this year, slightly above what economists had expected (11.2%).

In the same period, there were 11.4 million people looking for work in the country without finding any, a record. That was 10.3% more than the previous quarter - or 1.1 million newly unemployed in the period.

Translated by LLOYD HARDER

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