Brazilian government shrinks unemployment benefits

Brazilian government will stop providing unemployment benefits by June to hurdle economic difficulties that raise unemployment rate in Latin America

Photo by: Reuters (Archive)
Photo by: Reuters (Archive)

Laid-off outsourced workers, who were contracted to work for Petrobras, arrive to the Petrobras headquarter during a protest against recent layoffs in Rio de Janeiro, Brazil, August 24, 2015.

Updated Mar 25, 2016

The Brazilian government is set to cut off the unemployment benefits of more than 2 million Brazilians by June. The expiration of benefits will mostly frustrate the citizens because of the difficulty of finding new jobs in a short space of time after losing previous ones.

Brazilian President Dilma Rousseff reduced the scope of unemployment insurance last year to help curb government spending.

The current unemployment rate is 9 percent in the country. The number of jobless people losing unemployment benefits may become a more important source of discontent.

Brazilian Labour minister Miguel Rossetto said in an interview that the government is "very worried" and expects a few more months of job losses before a recovery in the second semester.

He said that an average of 492,000 benefits a month were running out between February and June, leaving many families to live without a crucial source of income.

More than 1.5 million jobs have already been lost since the downturn began in early 2014, and companies continue to dismiss a net 100,000 workers a month.

Almost 1 million Brazilians took to the streets this month in order to protest. Among the reasons for discontent is a corruption scandal at state oil company Petrobras that has curbed investment in Latin America's largest economy amid recession.

Some 270,000 government supporters also took to the streets in more than 50 cities Friday, according to police. Organisers said the turnout was at about 1.2 million.

The president is fighting impeachment proceedings, a painful recession and a firestorm over her decision to name Lula as her chief of staff.

Impeachment proceedings against Rousseff in Congress' lower house focus on allegations she manipulated government budget accounts to benefit her re-election in 2014. The lower house is expected to vote by mid-April on whether to send her for trial in the Senate.

Brazil saw a decade of economic prosperity and social progress between 2003 and 2013, in which over 26 million people broke the impasse of poverty and inequality, but recently faced the Petrobras corruption scandal and political turmoil.

TRTWorld and agencies