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Many developing countries suffer from unemployment. This causes the citizens to experience hard times during their stay in the country because they lack necessities which facilitate their stay. Due to the unemployment factor, many developing countries adopted the Unemployment Insurance (UI) program (OECD, 2011).
There are job protections such as firing costs where there are compensations in case of firing or retrenchment. In developing countries such as Brazil, unemployment comes from the workers being unprotected by the various organizations which ought to take care of their interests. In Brazil, the informal workers acre as high as seventy percent when compared to the employment. The informal workers do not have the right protection from the state or organization mandated to protect them by the state (Economy Watch, 2010).
In countries such as Brazil where there is significant informal sectors, fluctuations of business cycle and interventions in the labor markets have effects on the rate of unemployment. This results from the large reallocation of employees between the unregulated and the regulated jobs. Brazil is an example of such a cyclical pattern of labor market where workers are not protected from daily challenges of unemployment (Bosch & Esteban-Pretel, 2009).
Unemployment in Brazil rose considerably in the later part of the 1990s when compared to the rest of the years. From 1995 to1999, they rate of unemployment was about ten percent. Due to the rising rate of unemployment during this time, there was increases social unrest in the country where youths openly protested the lopsided distribution of resources in the country resulting to a retrogressing economy. The youths protested so as to gain their independence during their tenures or acquire more opportunities in the country. By 1998, the rates of unemployment rose to the highest where the protests were at their maximum. For the first six months of the year 1998, the rate of unemployment was around 7.8 percent but, the labor unions could not accept the findings. This was the official figure which was politicized so as to appeal to the international community but the labor union claimed that the rte was almost double that of the official rate (Bosch & Esteban-Pretel, 2009).
With minor fluctuations in 2000, the rates of unemployment were stable having the average employment rate after 2000 at ten percent. In 2003, the rate went up to 6.4 percent, which was an, indication that there was some work done to reduce the rates for that level or increase employment opportunities. In 2004, the rate of unemployment rose up to 12.3 percent followed by a minor fall in the year 2005 where the rates reduced to 11.5 percent.
In 2003, unemployment in Sao Paolo metropolitan area was at twenty percent. The city is the largest in Brazil and the major economy driver in the country. About two million people were not employed in Sao Paolo at this time (OECD, 2011). Most of the people are hired in the Brazilian metropolitan areas during the holidays because there is a lot of work. Towards the end of the holiday, many people lose their jobs, which results to, the sharp rise of unemployment rates after the holiday moments are over. By 2006, the estimated working population in Brazil was about one hundred and twenty five million people. The estimated working population by 2020 will be about one hindered and forty eight million workers. In 2006, urban unemployment was about ten percent, which dropped into, nine percent by 2007. The service sector in the country employs the highest numbers of people in the country. Sixty five percent of the workers are in the service sector (Economy Watch, 2010).
Agriculture sector accounts for over twenty percent of the working population. There are diversified agricultural activities because the nation invests in the agricultural sector. The biofuel farming and practice has helped to solve the cases of unemployment. The industrial sector in the country employs only fifteen percent in the country. Women workers were at forty two percent by 206 of the total working population in the country. There has been a downtrend of women unemployment over the years which increase the numbers of unemployed people in the country (Economy Watch, 2010).
Another cause of high level of unemployment in Brazil is the high number of population in the country. It is second in population from the United States of America. Unemployment is the acute problem that affects workers in Brazil. It departs from the assumption that the level of unemployment is a result of many factors such as the pace of economy and the labor markets contraction hence influencing the market’s mode of functioning. This contributes to the number and sizes of jobs created in the country. During the period that the Brazilian economy was under recession, there was no increase in the rates of unemployment in the country (Bosch & Esteban-Pretel, 2009).
In Brazil, the youngsters are in the risk of lacking employment because it is very hard r them to secure employment. Unemployment rate for the youths dropped from 38.2 percent to 28.8 percent in 2003. This is a great challenge because they are the people who need to be orientated in the job market. Brazil contrasted many countries because when other countries adopted policies of subsidizing companies so as to reduce workers temporally, Brazilians workers were guaranteed continuity of working (Proni, 2009).
In the recent evolution of unemployment in Brazil, there are several reasons why the crisis never reached a prominent elevation of rate of unemployment. The economy of the country was less vulnerable from the collapse of the financial system in the United States. The Brazilian government obtained surpluses in the budget of the federal union. This allowed the reduction of the public debt so that the level of unemployment did not hurt the economy of the country.
Brazil is the only economy which does not have a traditional system where the employers are fined because of giving the unemployed an unfair dismissal. This bred a spirit of impunity and contempt towards the employees who meet the end of their careers in an impromptu style (Proni, 2009).
The Lula government acted in the right manner that avoided recession to go deep hence affecting the state’s economy. The ministry of finance reduced tax in some branches of economy specifically in household appliances and cars sales. This was done to maintain an income for the families during the time of crescent unemployment. There was maintenance of programs that necessitated transfer of income to the poorest people which helped them to sustain themselves in the wave of unemployment (Proni, 2009).