Brazil's Labor Reform Failed to Create Jobs and Its Defenders Blame The Economic Crisis

Defenders of labor reform say political instability and and minimal economic growth limited labor reform gains

Ranier Bragon
Brasília

Since its implementation just over a year and a half ago, Brazil's labor reform has failed to the spark job growth that its strongest defenders promised. Despite this, politicians who pushed for its approval in 2017 continue to defend its potential.

Henrique Meirelles, then the finance minister, has even claimed that labor reform has the potential to generate an even higher number of jobs than previously projected—6 million.

A strike against labor reform in Sao Paulo.(Foto: Dario Oliveira/Folhapress)

"Labor reform elevates the economy's productivity, but it cannot displace other macroeconomic factors like business and consumer confidence, fiscal situation and monetary policy. I believe that, with tax and social security reforms, the economy will return to a growth stage, and labor reform will produce, in a more clear form, the expected results," Meirelles said.

The ex-senator Romero Jucá, who sponsored the bill, said that when the economy starts to grow again, labor reform will give employers the confidence to hire people.

"We didn't have the increase (in jobs) that we expected. When this increase happens, and people must be hired, the employer will have a menu of options to employ people in the best way for his/her business. The reform is not negative nor anachronistic. It's still relevant, important but it's not something that acts alone. There must be economic growth, investment, and if not, production nor employment will increase," Jurá said.  

Translated by Kiratiana Freelon

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