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Brazil – Small businesses boost employment

02 May 2013

Small firms in Brazil helped generate nearly 40% of the 15 million new jobs created in the country between 2001 and 2011, according to a new government report. This found that 95% of these firms fully complied with all labour laws.

The report, ‘Voices of the New Middle Class’, was carried out by the Institute of Applied Economic Research (IPEA), a federal public foundation linked to the Strategic Affairs Secretariat of the Presidency.

It said that small businesses accounted for 39% of the wages paid in Brazil. This helped to reduce poverty in a country where almost 40 million people have escaped poverty in the past 12 years, said Marcelo Neri from the IPEA.

The report analysed developments of Brazil’s middle class and found that last year, 35% of people climbed the social ladder while 14% fell. This is despite gross domestic product (GDP) growing by just +0.9% in 2012, the worst figure since 2009 when GDP contracted -0.3%. The IPEA also found that small businesses have grown their income significantly in the past decade. 

According to official data, there were around six million micro and small businesses in Brazil last year which employ up to 99 workers.

The latest labour market data shows that Brazil reported a rise in formal jobs during March, following an increase in economic activity. But the number of jobs added grew at a slower pace compared to a year ago. Brazil’s economy created 112,450 jobs in March, a +0.3% rise from February.

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