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Brazil: The Labor Challenge

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Brazil's economy may be booming, but cumbersome labor regulations make it difficult to hire people.

BY THIERRY OGIER

 

SAO PAULO -- The Brazilian economy is booming. Investments of all sorts have been pouring in. The fall in the jobless rate (5.3 percent at the end of last year and 6.7 percent on average during the year) was reached thanks to a record in new employment (2.5 million jobs last year, according to official figures). Some economists have even argued Brazil has been entering a new era of “full employment.”

 

Yet, new problems have emerged, such as the lack of a qualified labor force in various sectors of the economy. Moreover, old, structural problems have persisted over the years: the outdated labor legislation and the rigidity of labor relations in Brazil are far from being investor friendly. Such issues tend to be overlooked when business is booming, but they are still a drag to competitiveness, especially when other countries have already moved to flexibilize their labor markets.

 

The complex and rigid set of rules is ...



Keywords: CLT, Latin Labor Index, Lula, Renault

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