Lack of government transparency promotes 'statistical blackout' on unemployment amid pandemic.

Thais Carranca, Brazil of Fact -  Amid the economic crisis generated by the coronavirus pandemic, the main unemployment and income indicators in the country are suspended or facing problems that could compromise their publication. The situation is so delicate that economists interviewed by Repórter Brasil say we are "in the dark" and facing a possible "statistical blackout," which compromises even the development of public policies to minimize the effects of the economic crisis.

The General Registry of Employed and Unemployed Workers (Caged), an indicator of hiring and firing of workers with formal employment contracts, has not published data since January of this year — this information, which was released monthly, was officially suspended by the government on March 30, with no date set for its resumption.

A government-created portal containing unemployment insurance data, which also serves as a reference for the number of formally employed workers who have been laid off, has not been updated since December 2018. 

Finally, the IBGE's Continuous National Household Sample Survey (PNAD Contínua), which covers the formal and informal labor market and reveals the country's official unemployment rate, is being conducted by telephone due to the new disease and is facing data collection problems—the percentage of respondents has fallen from 90% to 60%. It is still uncertain whether the survey will achieve the necessary performance to be maintained during the pandemic, as Cimar Azeredo, deputy director of research at IBGE, told Repórter Brasil. 

“The biggest problem today is that we are without a compass,” says Manoel Pires, a researcher at the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre-FGV). “There has been a general worsening of federal government statistics in the last year and a half,” Pires considers. “This is due to disinvestment, lack of appreciation for information, and sometimes carelessness,” assesses the researcher, citing not only the lack of data regarding unemployment, but also the Bolsa Família program and inconsistencies in the country's balance of payments figures. 

“The indicators help us understand the extent to which the crisis is affecting people's employment and allow us to formulate protection and stimulus measures, not only now, but also when we emerge from isolation,” says Cosmo Donato, labor market analyst at LCA Consultores, regarding the importance of data for the formulation of public policies.

In this scenario, economists believe the government should start publishing unemployment insurance claims weekly, as is the case in the United States, where claims for assistance totaled 22 million in the last four weeks. 

At a time when some cities in the country are completing a month of social distancing and the closure of most businesses, the only data being released by the government in press conferences refers to the number of workers who have had their working hours and salaries reduced or their contracts temporarily suspended, as permitted by Provisional Measure 936, issued on April 1st. However, this data does not reflect the number of formally employed workers who have been laid off or the number of self-employed and informal workers who are without income and unable to work.

However, on the 13th, the Special Secretary for Social Security and Labor of the Ministry of Economy, Bruno Bianco, said that the government would start publishing the number of these workers on a website nicknamed "employment meter". The promise was that it would be launched last week, but that didn't happen.

By Thursday (16), agreements for reduced working hours and salaries exceeded 2 million, according to the Ministry of Economy, and 37,8 million CPF numbers had been approved by the Ministry of Citizenship to receive the emergency aid of R$ 600, according to Dataprev. The unemployment rate for the first quarter is expected to be released by IBGE on April 30.

When contacted, the Ministry of Economy did not say when it will resume publishing data on unemployment insurance claims, nor when it will begin systematically publishing, on publicly accessible websites, figures relating to the suspension or reduction of contracts, in addition to updated information on emergency aid applications.

"Given the urgency to address the crisis caused by COVID-19, the priority is the timely provision of the necessary solutions for the payment of emergency benefits and unemployment insurance," the ministry said in a statement. The statement also added that, "without prejudice to transparency, this information will be released in due course."

Repórter Brasil also questioned why the Unemployment Insurance Program Information Panel website, launched by the government in 2018, has not been updated since December of that year. "The updating of the Unemployment Insurance Program Information Panel was discontinued because the number of accesses to the system did not justify its maintenance, which would depend on people being employed and budgetary resources," it stated. The ministry did not respond to criticisms, made by economists, regarding the government's lack of transparency. 

Caged suspended

Despite the government's silence, news of workers losing their jobs or suffering reductions in working hours and income is proliferating across the country. Anne Elizzi Maria da Silva, 20, from Recife, was fired on April 6th via video call from her job as a telemarketing operator for a car rental company. Anna Patrícia Almeida, 48, was fired at the end of March from a school in Rio's South Zone where she worked as a secretary's assistant, after refusing to work in person during the quarantine, fearing she would infect her 85-year-old mother with whom she lives. Saimon Dickel Schmidt, 18, was fired on the 14th from his first job in the medical and statistical filing system of a hospital in Sapiranga, in the interior of Rio Grande do Sul.

All these stories would become numbers in the Caged, a registry of formal hiring and firing maintained by the Ministry of Economy. Companies are required to submit this data to the government every month. However, since the beginning of 2020, the Jair Bolsonaro administration has not released these registry numbers.

The problem arose with the migration of data submissions by companies from Caged's own system to eSocial, which unifies the submission of tax, social security, and labor information by the private sector to the government. With this change, at least 17 companies failed to report termination data in January and February, according to the Ministry of Economy. In response to the problem, the ministry announced on March 30th the suspension of the publication of Caged data indefinitely.

Regarding the situation, the Ministry of Economy informed Repórter Brasil that it “created a technical group to discuss the methodology for analyzing monthly formal employment data” and “the expectation is that the group will present a proposal for the release of monthly formal employment data by the end of May 2020”.

According to the ministry, "the pandemic scenario caused by Covid-19 has made it difficult for some companies to self-regulate" and have not properly filled in the data on new hires and terminations in eSocial.

over the phone

The Continuous National Household Sample Survey (PNAD Contínua) had its in-person data collection suspended in mid-March as a way to protect researchers from the risk of contamination and transmission of the coronavirus. In an attempt to maintain the survey, IBGE is conducting data collection by telephone, but the response rate is around 60% on average nationally, according to Cimar Azeredo, deputy director of research at IBGE, compared to 90% when data collection was done in person at households.

“The Continuous National Household Sample Survey (PNAD Contínua) was not designed to be conducted by telephone, as it has long questions and a large questionnaire,” Azeredo told Repórter Brasil, noting that other countries face similar problems. Furthermore, the director says, many people do not answer the institute's calls due to bad experiences with telemarketing services. And when they do answer, they are afraid to provide information, fearing scams.

IBGE is also facing problems obtaining data for all 211 households that make up the Continuous National Household Sample Survey (PNAD Contínua). According to the IBGE spokesperson, the greatest difficulty in contacting people occurs in rural areas.

“The closing of the month of March was very difficult and that is why it was postponed,” reports Azeredo. “We need the population to understand that being in a statistical blackout in the face of a pandemic is very bad, because the people who are currently organizing the fight against the epidemic need numbers.”

According to the director, it is not yet certain whether all items from the PNAD (National Household Sample Survey) will be released on April 30th. "The problem is not only the sample size, but how it is distributed [regionally in the country]. We have a Method and Quality Coordination team that will analyze this," says Azeredo.

According to the director, if the necessary quality is not achieved, the Continuous National Household Sample Survey (PNAD Contínua) may even be temporarily suspended. However, the institute is working to launch a new survey soon, called PNAD Covid, which will collect health and labor market data by telephone, possibly on a weekly basis. The new survey, however, does not yet have a defined start date.

“We needed a survey with a shorter timeframe, a small survey that could be done quickly by telephone,” says Azeredo. “It may even happen, if we assess that the Continuous National Household Sample Survey (PNAD Contínua) is not performing as expected, that it will be suspended for a period, until the end of social distancing. But this is not yet finalized; it will be a decision of the technical area, in accordance with the IBGE's management.”

Unemployment on the rise.

Cosmo Donato, from LCA Consultores, calculates that the unemployment rate measured by the Continuous National Household Sample Survey (PNAD Contínua) could reach 13,5% in December 2020, with 14,5 million unemployed, if the Gross Domestic Product (GDP) falls by 3,5% this year. This would be almost 3 million more unemployed than in December 2019, when the rate was 11%, with 11,6 million unemployed. In February of this year, the latest available data, the unemployment rate was 11,6%, with 12,3 million workers seeking employment, even before the coronavirus crisis.

“It’s very common in times of crisis to look at statistics that are more timely,” says Manoel Pires of Ibre-FGV. “It’s possible to quickly measure how many people are applying for unemployment benefits; this is a statistic that has never been publicly available in Brazil, and there’s no reason why it shouldn’t be,” he states.

The economist also argues that the government should systematically publish online the numbers of agreements for reduced working hours and salaries signed under Provisional Measure 936, as well as requests for the R$ 600 emergency aid from Caixa Econômica Federal.