6 YEARS OF THE REAL PLAN GROWTH AND SOCIAL DEVELOPMENT
IV – EMPLOYMENT AND SALARIES

EMPLOYMENT The behaviour of employment in 1999 surpassed the pessimistic expectations of the beginning of the year, deriving from the change in the foreign-exchange regime. Starting from the second half of that year, the level of employment indicated a reversion in the drop recorded in the previous years, a process that ended up by showing a vigorous increase at the end of the year. This increase was maintained in a significant manner in 2000. After closing 1999 with the addition of 418 thousand jobs, in the six-month period that ended in April, 2000, there was an increase of 864 thousand jobs as compared to the same month in 1999. This fact represents the highest level of job creation after Plano Real was launched, and it marks a new period, in which job generation occurs within a framework of price stability and fluctuating rate of exchange. It is worth highlighting, regarding this period, the contribution the of industry to the broadening of the job supply. With the resumption of production, both for domestic consumption and for export, industry created 155 thousand new jobs in the twelve-month period that ended in April, which confirms the positive and growing trend initiated in November, 1999. In spite of the increase in occupation, the unemployment rate shows a growing trend in the second half of 1999, due to the expansion of the Economically Active Population (EAP). This behaviour is a natural consequence of the recovery of the economy, a moment in which EAP typically increases below the supply of vacancies. However, the consistency in the raise of occupation changed the trend of the unemployment rate since the end of 1999. Such rate started declining in all sectors of activity and in all regions of Brazil. For example, in April, 2000, the rate, not seasonally adjusted, was of 7.31% as compared to 7.49% in the same month in 1999. SALARIES The average real income presented a 5.4% drop in 1999, due to the currency devaluation, to the upward trend in international oil prices and to the readjustment of public tariffs. However, the effort Government applied to maintain price stability was fundamental to prevent the cost of the basic basket from increasing too much. The positive behaviour of the basket, associated to the annual readjustments of minimum wages above inflation, have been gradually raising the purchasing power of lower-income wage earners. While in May, 1994, a minimal wage would buy 0.69 of the basic basket, in May, 2000, a minimal wage bought 1.15 basket, that is, there has been a 67% real increase.