Structural Unemployment in Brazil in the Neoliberal Era

Pedro Henrique Evangelista Duarte Pedro Henrique Evangelista Duarte

doi:10.13169/worlrevipoliecon.4.2.0192

Abstract

The Brazilian economy is historically characterized by an unequal economic and social structure. Over the years, given this economic and social structure, the Brazilian economy developed without solving its main problems. This has created barriers to both stable economic growth and improvements in the living conditions of the population. Even though the industrial sector between 1930 and 1970 increased its investment, growth and output rates, reinforcing its structure and proportion in the gross domestic product, unemployment and income inequality have remained as structural characteristics of the Brazilian economy. The crisis in the 1980s and the neoliberal policies in the 1990s strengthened these problems, especially through the increase in the unemployment rate and in the informal sector, and with the deregulation of the labor laws. The Brazilian government only started to pay attention to those problems from the Lula government onwards, implementing public policies to promote improvements in the labor market. However, high unemployment rates, low wages and income inequality still remain as structural problems in the Brazilian economy. Based on these aspects, the article will analyze structural unemployment in Brazil over the last ten years, pointing out and trying to understand the problems and trends. The discussion developed by Karl Marx in Capital concerning the relative surplus population and the reserve army will be the theoretical approach on which that analysis will be based.

Highlights

The Brazilian economy has, since its formation, structural characteristics that resulted in income inequality and poverty that eventually became intrinsic
Characterized by structural heterogeneity and by structural unemployment, which are the results of the uneven development of its productive sectors and the inability to include in the labor market all of the labor force of the economically active population, the Brazilian economy came to be challenged principally by those problems that, in different moments of its history, were intensified by the results of international crisis, by the inability of the government to solve them or by the implementation of policies that, even promising to overcome those problems, did little more than exacerbate them
That was the condition of the Brazilian economy at the beginning of 2000, when unemployment, poverty and income inequality were again considered to be the main problems faced by the government

Summary

Introduction

The Brazilian economy has, since its formation, structural characteristics that resulted in income inequality and poverty that eventually became intrinsic. If the crisis of the 1980s interrupted the process of industrial development that took place in the Brazilian economy during the period 1930–70, which transformed its economic and social structure but did not solve its longstanding problems, the neoliberal policies and globalization process in the 1990s led the economy to a situation with low inflation, and with external vulnerability, dependency on international capital, imbalance in the balance sheet and financial fragility Based on those conditions, it was clearly difficult to solve the problems concerning the labor market—which was modified into a system characterized by flexibility of labor relations and low wages, making the work conditions of the labor class even more precarious.

Relative Surplus Population and Structural Unemployment

The Neoliberal Policies in Brazil

Findings

Final Thoughts