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A study by Ibre-FGV indicates that the increase in Bolsa Família benefits impacted the supply of less-skilled workers. Business owners report difficulties filling vacancies and advocate for program adjustments to encourage formalization.
The combination of low unemployment rate, recent expansion of Family Bag and changing workforce profiles have reignited the debate about the lack of labor in commerce and services.
According to the report published by the newspaper Trade Journal, signed by journalist Karina Lignelli, a survey by Ibre-FGV indicates that the benefit, currently with average value of R$ 671,54, would have reduced the supply of less qualified workers and encouraged them to remain in the informal sector, especially among young people.
For businesspeople and economists interviewed by the publication, the tight market scenario would be conducive to adjustments in the design of assistance programs.
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Full employment puts pressure on hiring
With unemployment at 5,6% in August, the market operates close to what economists call full employment.
In this context, companies report increasing difficulty in filling operational positions in supermarkets, bakeries, agriculture and other labor-intensive activities.
According to the calculation of Trade Journal, some candidates refuse formal ties so as not to lose the aid.
In regions with a high concentration of beneficiaries, there are reports of situations where “there are more people receiving Family Bag than employees with signed employment contracts”, according to the chief economist of the Commercial Association of São Paulo (ACSP), Marcel Solimeo.
What does the Ibre-FGV study say?
The research conducted by Daniel Duke, from Ibre-FGV, relates the expansion of the benefit to the participation behavior in the labor market.
The value of the program, which was R$ 190 in 2019, rose to about R$400 after the pandemic, it reached R$ 600 in 2022 and began to represent 35% of median labor income, compared to 15% previously.
The number of families served would have jumped from 14 million to 21 million, while the annual budget approached $ 170 billion.
According to the newspaper, the participation rate did not return to pre-pandemic levels and the expansion of the benefit helped explain the mismatch.
Between men aged 17 to 30, the labor supply would have fallen more intensely, as well as the search for formal positions.
Duque sums up the dynamics by stating that “those who respond most to the Bolsa Família income increase are men, who are more likely to be in formal employment and have fewer time constraints imposed by their families.”
He also observes a threshold effect: newly eligible groups would have reduced labor participation by 11% compared to almost identical families who were left out due to a small difference in income — which translates, in the researcher's calculations, into the idea that “for every two families that receive Bolsa Família, one leaves the workforce.”
Incentives and the “protection rule”
From June onwards, the protection rule: families that exceed the per capita income of R$218 can remain for up to 12 months in the program, receiving 50% of the value.
The government's intention was to smooth the transition to formal employment and reduce the fear of abruptly losing the benefit.
In practice, however, businesspeople report that the incentive is still insufficient to retain candidates, especially in positions of low wages and long working hours.
To Solimeo, the ideal is to maintain an effective “exit door”, with periodic evaluations, training and assistance with relocation: “the citizen takes off in his professional life”, he told Trade Journal.
Lack of labor in commerce and services
In commerce and services, the complaint is common: there's difficulty filling entry-level positions, high turnover, and increased competition from self-employed workers.
The assessment of part of the business community, reported in the report, is that the cost of formal employment — driven by CLT charges — makes hiring less attractive, while the program's guaranteed income, combined with side jobs and apps, supports more flexible choices.
The newspaper also pointed out that there is concern about the fiscal framework: high spending would push interest rates up and make credit more expensive, affecting investment and productivity.
Voices from academia and the business sector
To Antonio Lanzana, economist and professor at FEA-USP, smaller companies are the most affected, as they depend on low-skilled workers.
He recognizes that many potential employees avoid formal ties so as not to lose the benefit or prefer informal activities, which creates misalignment in the formal market. Still, he considers that transfers don't explain everything.
There unfavorable demographics, with loss of the young contingent; growth above potential in part of the post-pandemic period, exhausting idleness; and attraction to apps and flexible work, which compete with traditional employment.
“I don’t see any movement in the business sector to review this type of benefit, but there is criticism that there is excessive public spending — which forces the Central Bank to maintain high interest rates that harm business management,” said Lanzana in an interview with Trade Journal.
Productivity, qualification and income
Another recurring point in the debate is the low productivity. Businessmen and economists argue that sustainable gains would come from investments in education and health, And professional qualification.
There was real increase in average pay in recent quarters and expansion of mass of income, driven by both work and transfers.
The side effect would be that companies would have greater difficulty recruiting, especially for entry-level roles, under pressure from uncompetitive salaries in view of the family income package.
The role of freezing and political risk
Duque emphasizes that, after the strong expansion until 2023, the program did not advance between 2024 and 2025, which relativizes his explanation for the most recent labor shortage.
He notes that the government has avoided readjust the benefit amount by inflation to contain distortions, a decision that, over time, reduces purchasing power assistance and can make formal employment more attractive.
The researcher also points out the political cost of reforms: the value fixed and standardized the benefit gained popularity and became sensitive to changes, unlike the old model per capita, which varied according to family composition and had better results in combating poverty, but was difficult to communicate, as highlighted by Trade Journal.
Proposals on the table: redesign and conditions
Among the suggestions aired in the business world are adjustments to the reference value e reinforcement of conditions linked to education and productivity.
There are those who advocate targeted transfers to mothers with small children and young who left school to supplement their income, as a way of mitigate negative effects on the labor market without weakening social protection.
Another recurring proposal is to expand training e labor intermediation, with measurable goals, to ensure that the “exit door” is concrete and not just rhetoric.
Structural factors continue to weigh
Even critics of the current design acknowledge that the Family Bag it's just a piece of the puzzle. drop in birth rate and population aging compress the youth base, essential for labor-intensive sectors.
A preference for flexible occupations grew, and the cost of formal employment remains high.
No progress in basic education, technical graduation e business environment, experts assess that companies will continue to compete for a limited number of workers, with or without assistance.
In your view, what should matter more in the short term: benefit adjustments to calibrate incentives or measures to make formal employment cheaper and accelerate qualifications, without losing sight of protecting the most vulnerable?
It's true, people no longer want the humiliation of these low-wage jobs with long, exhausting hours... offer more and the workforce will appear.
Would you work hard, 8 to 12 hours, without relevant benefits, for R$2.500,00 ****?
That's not all, companies are secretly demanding a Covid vaccine, even though some have already stopped production due to side effects.
Those who spend more than they collect will have to offer government bonds with attractive rates of return. For businesses, high interest rates make money more expensive. More expensive credit and an absurd tax burden scare away investors, who end up taking their assets elsewhere. The biggest problem lies in the mismanagement of this current government, which has an economy minister who isn't even an economist. The recipe for failure is ready.