Macroeconomic Model and Labor Market Features Mrio dos Santos Barbosa Special Advisory for International Affairs Ministry of Labor and Employment of Brazil Employment Policies and Labor Market Policies Employment Policies: macroeconomic policies that target demand, product and employment level expansion; Labor Market Policies: labor intermediation, professional training, unemployment benefits, labor inspection. Employment Policies Social Policies - Social spending multiplier: every 1 Real spent with the Brazilian Minimum Income Program (Programa Bolsa Famlia) is estimated to generate R$1,44 in the product SOCIAL SPENDING EVOLUTION FEDERAL BUDGET (as % of the GDP and in millions of 2012 reais) MINIMUM WAGE EVOLUTION SOCIAL SECURITY COVERAGE INDEX EVOLUTION ECONOMICALLY ACTIVE POPULATION 16 TO 59 YEARS OLD Macroeconomic model: economic growth with income redistribution Source: Pochmann, 2012: 15 PER CAPITA INCOME AND INEQUALITY INDEX (GINI) EVOLUTION BRAZIL Employment growth at the base of the pyramid Source: Pochmann, 2012: 19 Average salary according to RAIS (Social Information Anual Report) Average Salary according to the region of the country: The data shows generalized real gains, with less developed regions of the country showing larger gains The data shows generalized real gains, with less developed regions of the country showing larger gains North (3,80%); North (3,80%); Northeast (3,65%); Northeast (3,65%); South (3,51%); South (3,51%); Southeast (2,62%); Southeast (2,62%); Central-West (1,81%). Central-West (1,81%). Results: historical minima in the unemployment rate Source: IPEA, 2013: 07 Significant fall in the informality index in the 2000s Source: IPEA, 2013: 10 A new labour market emerges Source: RAIS. Elaborao SPI/MP We have broken taboos and concepts pre-established by certain economists, certain sociologists, certain historians. Some truths went out of the window. First, we proved that it was absolutely possible to grow while distributing income, that we didnt have to wait to distribute. Second, we proved that it was possible to raise wages without inflation. In the last ten years, organized workers have had a real raise: the minimum wage went up almost 74% and inflation remained under control. Third, during this decade we increased our foreign trade and our domestic market without having that lead to conflict. They used to say it wasnt possible to enlarge both foreign and domestic markets at the same time. Former President Luiz Incio Lula da Silva Thank you!