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Cities of Hope Assessing Ways In Which Brazil Urban Areas Have Created Economic Opportunities for Young People Carlos Leite June 2013
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Cities of Hope Assessing Ways In Which Brazil Urban Areas Have Created Economic Opportunities for Young People Carlos Leite June 2013

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Cities of Hope Assessing Ways In Which Brazil Urban Areas Have Created Economic Opportunities for Young People Carlos Leite June 2013

Cities of Hope Assessing Ways In Which Brazil Urban Areas Have Created Economic Opportunities for Young People Carlos Leite June 2013

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  • 1. BOARD: L Dippenaar (chairman), A Bernstein (executive director), A Ball, E Bradley, C Coovadia, M Cutifani, B Figaji, F Hoosain, M Le Roux, S Maseko, I Mkhabela, M Msimang, W Nkuhlu, S Pityana, S Ridley, A Sangqu, E van As •INTERNATIONAL ASSOCIATE Prof P Berger 5 Eton Road, Parktown 2193, Johannesburg, South Africa ∙ PO Box 1936, Johannesburg 2000 Telephone: +27 (0)11 482-5140 • Fax: +27 (0)11 482-5089 • www.cde.org.za • info@cde.org.za •Reg No: 026-485-NPO Assessing the ways in which Brazil’s urban areas have created economic opportunities for young people. Professor Carlos Leite Co-authors: Carolina Bracco and Mariana Guerra Paper prepared for the Centre for Development and Enterprise, commissioned for Cities of Hope project, June 2013. This paper has only been edited lightly for clarity.
  • 2. 1 Assessing the ways in which Brazil’s urban areas have created economic opportunities for young people Carlos Leite1 Co-authors: Carolina Bracco, MSc., FAU.Mackenzie; Mariana Guerra, MSc., FAU.USP Sao Paulo, Brazil, June 2013 1 Carlos Leite is an Architect and Urbanist, with a Master and PhD in Urban Studies from the University of Sao Paulo and a Postdoc from California Polytechnic University in Sustainable Urban Economic Development. He is Professor at the School of Architecture and Planning, Mackenzie Presbyterian University and Visiting professor at Fundaçao Dom Cabral Business School. He has been Visiting Professor/Researcher in many different institutions as CalPoly, Parsons/NY, IaaC/Barcelona, Columbia and UC Berkeley and consultant (Inter-American Development Bank). He is author of Sustainable Cities, Smart Cities in Brazil in 2012. carlos@stuchileite.com
  • 3. 2 Summary 1 Urban Brazil: Emerging Economy, Emerging Opportunities for Young City Dwellers? 2 Brazilian Megacities and Economic Opportunities for Young People 2.1 Sao Paulo 2.2 Rio de Janeiro 2.3 Informal Territories in Reinvention: Spatial Externalities and Intangible Attributes Emerging on the Borders 3 Conclusions 4 References
  • 4. 3 1 Urban Brazil: Emerging Economy, Emerging Opportunities for Young City Dwellers? Despite Europe’s financial crisis and the slow recovery of the USA, the investments in the countries that compose the BRICS2 group (Brazil, Russia, India, China and South Africa) has been multiplied by 3 during the last 10 years, being only 6% of world’s total in 2000 and 20% in 2012. As a member of the BRICS the expectation of Brazil’s growth was high, but recent research shows that the country has the lowest growth performance of the group, increasingly so (falling from 2,7% to 0,8%) not only among the BRICS group but also among its neighbours Argentina (4,8%), Chile (5,6%), México (4,6%), Peru (6%) and Venezuela (5,6%). Brazil’s performance compared to other countries of the BRICS could be better especially because the country has been receiving global investments due to events such as 2014 World Cup and 2016 Olympic Games that will be hosted by Brazil. According to Luis Carlos Prado, professor of Economics at UFRJ3 , this scenario of decreasing growth will force Brazil to face some of its biggest issues such as development of education and infrastructure (highways, railways, airports and ports poorly maintained that disturb production flow and distribution of imports)4 . Nevertheless, according to the magazine ISTO É Dinheiro5 (“This is Money”), the domestic market is a secure vector to economic growth due to the credit expansion, the prospect of lower interest rates, the introduction of the social class “C” among the consumer market, increase of commodities’ exportation, exploration of pre-salt layer;, and attractiveness of investments due to 2014 World Cup and 2016 Olympic Games. A survey conducted between the end of November and the beginning of December of 2011 with 155 executives of 128 firms, done by consulting Robert Half for the magazine ISTO É DINHEIRO shows high levels of optimism among Brazilian entrepreneurs. Urban and Mmetropolitan Brazil According to the Brazilian Institute of Geography and Statistics (IBGE), the ten largest Brazilian metropolises are: Belém, Fortaleza, Recife, Salvador, Distrito Federal, Belo Horizonte, São Paulo, Rio de Janeiro, Curitiba e Porto Alegre (Figure 1). 2 http://www.itamaraty.gov.br/temas/mecanismos-inter-regionais/agrupamento-brics 3 http://oglobo.globo.com/economia/economia-do-Brazil-tem-pior-desempenho-entre-brics-5101277 4 http://congressoemfoco.uol.com.br/opiniao/forum/brics-qual-o-papel-do-Brazil-neste-grupo/ 5 Revista ISTO É DINHEIRO, nº ediçao: 743 - O país das oportunidades. Disponível em http://www.istoedinheiro.com.br/noticias/76101_O+OTIMISMO+DO+BRAZIL+QUE+PRODUZ
  • 5. 4 Figure 1: Brazil’s ten largest metropolises (2009). Source: Instituto de Pesquisa Econômica Aplicada (IPEA), 2013, p.11. <http://www.ipea.gov.br/portal/images/stories/PDFs/TDs/td_1813.pdf> Accessed: 20/04/2013 The main cities of these metropolises will host 2014 World Cup, together with the cities of Cuiabá, Manaus and Natal. With the upcoming event, the host cities have been receiving considerable investments for infrastructure improvements. It’s estimated that more than U$12,5 billion will be put into airports, football stadiums and new transportation systems. São Paulo and Rio de Janeiro receive the core of the investments, since they’ll host, respectively, the opening and the closure of the World Cup. The metropolises of São Paulo and Rio de Janeiro are referential among Brazilian economics, concentrating the largest populations and demographic densities of the whole country, and are also the cities in which people take more time to go from their houses to their work (Chart 1). Comment [ES1]: What is he trying to say – that they are decisive for Brazil’s economy?
  • 6. 5 Chart 1: Features of the largest metropolitan areas (2010) Metropolitan area Population Total area (Km²) Demograp hic density (in/Km²) GDP per capita (2008) Motorizati on rate Average travel time home- work (min) Sao Paulo 19.443.745 7.943,8 2.447,7 30.349,52 38,1 42,8 Rio de Janeiro 11.835.708 5.643,8 2.097,1 19.762,04 20,8 42,6 Belo Horizonte 4.883.970 14.415,9 338,8 19.540,41 29,6 34,4 Porto Alegre 3.978.470 9.800,2 406,0 23.225,00 31,2 27,7 Recife 3.870.004 2.768,5 1.397,9 13.592,95 15,3 34,9 Fortaleza 3.615.767 5.783,6 625,2 11.715,26 14,7 31,7 Salvador 3.573.973 4.375,1 816,9 17.721,18 16,0 33,9 Curitiba 3.223.836 15.418,5 209,1 22.953,67 41,6 32,1 Distrito Federal 2.570.160 5.801,9 443,0 45.873,47 37,3 34,8 Belém 2.101.883 1.819,3 1.155,3 9.228,27 11,2 31,5 Source: Instituto de Pesquisa Econômica Aplicada (IPEA), 2013, p.12. <http://www.ipea.gov.br/portal/images/stories/PDFs/TDs/td_1813.pdf> Accessed: 20/04/2013 According to IBGE (Brazilian Institute of Geography and Statistics), Brazil has an area of 8.5 million 20 108 515 692,272 km². The National Survey by Sample Household (PNAD) of 2011 (National Survey by Sample Household) shows the existence of a population of 195,2 million people and a demographic density of 22,9in/km². The Brazilian population is not equally distributed, with for instancein Brazilian territory (Chart 1). the Amazonas State, for instance, with an area that corresponds to 18,4% of national territory, hasving a demographic density of 2,3in/km²,; whereas Distrito federal, with an area that represents less than 0,1% of national territory, had a demographic density of 462,1 in/km² (Chart 1). North Region and Middle West concentrate, respectively, 8,5% and 7,5% of Brazilian population, whereas the Southeast region concentrates 42%, with a population of 82,1 million. Sao Paulo (21,6%) and Minas Gerais (10,2%) are the federation unities with the largest populations. Comment [ES2]: This should be 8.5 million (as per World Bank report of 2010 – hence the confusion perhaps?)
  • 7. 6 The way in which tThe population is also unevenly concentrated in the metropolitan areas is also irregular. Whereas Rio de Janeiro’s metropolitan area concentrates 73,7% of the population of the entire state as opposed to and Sao Paulo’s metropolitan area concentrates 48%, Belo Horizonte and Salvador’s metropolitan areas concentrate only about a quarter of the population of its states. Charts 2/3: Ranking of the population of the metropolitan areas of Brazil (2010) and list of the ten cities with the highest population. Ranking of the population of the metropolitan areas of Brazil – 2010 List of the ten cities with the highest population Metropolitan State Population Rank in % of the population County Population Areas 2010 2010 of the in 2010 corresponding state Source: IBGE (PNAD 2011) Until the 1940s the country presented high levels of fertility and mortality. With the decrease of mortality levels, Brazil’s population growth rose to almost 3% per year during the 50s. During the 60s, fertility levels began to drop very slowly, which was the beginning of a slowdown in the population growth which continued to drop during the following decades. Comparing to 2000 census, Brazilian population has grown 12,3%, with a corresponding annual growth of 1,17% (Graphic 1): Regiões Metropolitanas 2010 Estado População (n° hab.) Posição em 2010 %da população do estado correspondente São Paulo SP 19.672.582 1 48% Rio de Janeiro RJ 11.711.233 2 74% Belo Horizonte MG 5.413.627 3 28% Porto Alegre RS 3.960.068 4 37% Recife PE 3.688.428 5 34% Fortaleza CE 3.610.379 6 43% Salvador BA 3.574.804 7 25% Curitiba PR 3.168.980 8 30% Campinas SP 2.798.477 9 7% Manaus AM 2.210.825 10 63% RANKINGDAS POPULAÇÕES REGIÕES METROPOLITANAS DO BRASIL- 2010 População em 2010 11.244.369 6.323.037 2.676.606 2.562.963 2.447.409 2.375.444 1.802.525 1.746.896 1.536.934 1.409.93910 - Porto Alegre LISTA DOS DEZ MUNICÍPIOS COM MAIOR POPULAÇÃO Município 1 - São Paulo 2 - Rio de Janeiro 3 - Salvador 4 - Brasília 5 - Fotaleza 7 - Manaus 8 - Curitiba 9 - Recife 6 - Belo Horizonte
  • 8. 7 Graphic 1: Geometric average annual growth. Brazil 1872/2010. Source: Recenseamento do Brazil 1872 – 1920. Rio de Janeiro: Directoria Geral de Estatística, 1872 – 1930; e IBGE, Censo DemoGraphic 1940/2010. The growth hasn’t been uniform in the Great Regions of the Federation either. The highest rates were observed in the North and Middle West regions, where the immigration, due to the attraction brought by the agribusiness, contributed to a differential growth. The ten Federation Units that have the higher population growth in relative terms are in this region. Northwest and Southeast regions showed a similar population growth, slightly higher that 1% per year. In the Southeast region, there was decreasing growth rate. The South region, that since 1970 census had an annual growth of about 1,4%, had the lowest growth, being influenced by the low rates observed in the states of Rio Grande do Sul and Paraná, of 0,49% and 0,89%, respectively. The country registered, in 2011, an urbanization rate of 85%. The Northeast region has the lowest urbanization rate: 73,7%. Maranhão (60,2%) and Piauí (66,5%) are the least urbanised . At the other side, Rio de Janeiro (97,4%) and São Paulo (96,8%) concentrate almost all of their population in urban areas. The decreasing rural population reduced by about 2 million people between trend remained constant between 2000 and 2010, . This reduction, of about 2 million people, can be mainly due to attributed to rural to urban migration. Within the country, the Southeast region lost the most significant proportion of its rural population (6,9 millions to 5,7 millions). The South region lost more than 600 000 people of the rural population, dropping to an rural population of only 4,1 millions in 2010. The Northeast region, that still concentrates almost half of Brazilian rural population (14,3 million), saw its Formatted: Font: (Default) +Headings (Calibri), 12 pt
  • 9. 8 rural population decreasing with just over 500 000. Finally, regions in the North and Middle West, saw an increase of 313 606 people and 31 379 people in its rural populations, adding up in 2010 to in 2010, 4,2 millions and 1,6 millions respectively. The North region concentrates the four states that had the highest growth rate of rural population during the period analysed –— Roraima, Amapá, Pará and Acre. In respect to migration, according to IBGE, major axes observed in the past are losing intensity and there is a tendency to return to areas of origin. The Southeast region has lost much of its attractiveness and the Northeast continues to lose inhabitants, but on a smaller rate than in the past decades. In Brazil, significant population shifts emerged, with Minas Gerais and Rio de Janeiro loosing attractiveness among migrants whereas especially in Northeast, medium-sized cities in the country are becoming more popular due to the increasing importance of commuting (to work and / or study), the depletion of agricultural expansion and migration to Paraná. This trend is confirmed by the 2010 Census which showed that cities with less than 500 000 inhabitants are the fastest growing in the country, possibly under the influence of migration, while also large cities continue to concentrate a significant portion of the population (approximately 30%). However, the percentage of municipalities that have had population losses is more significant among the smaller ones and more than 60.0% of those with less than 2000 inhabitants in 2010 showed negative growth rate during the referred period. According to research by IPEA (Institute of Applied Economic Research), 3.327 million Brazilians left their home states between 2003 and 2008. Of those, 45.6% were young people, aged between 18 and 29 years, and had an unemployment rate lower than that of non-migrants, and had a tendency to formality, but with a working over 45 hours per week. An analysis of the population distribution by age points to an aging trend of the age structure, mainly due to the decline in fertility rates. Graphic 2, depicting the percentage distribution of the resident population during the period 2001-2011, shows a narrowing base of the pyramid, where the low age population is found, and a extending of the top, represented by a population of more than 25. Reason of the dependency of young and old people The total dependency ratio measures the ratio between the number of people considered inactive (people under 15 or over 60 years old) and potentially active people (people aged 15 to 59 years). This indicator can be examined, too, in each of the age groups economically dependent, being then called dependency ratio of young and elderly dependency ratio. In Brazil, the total dependency ratio shows that there is a decrease of the economically dependent group compared to the group of people potentially active. In 2001, this indicator was
  • 10. 9 60.3 per economically dependent people for every 100 people in potentially active age, falling to 54.6 in 2011. The relative increase in potentially active age population can be a good economic opportunity for the country, provided that such people are inserted in the labour market, especially in high- skilled jobs. The data also reflect the strong aging process of the population: from 2001 to 2011, the proportion of people between 0 and 14 years for each 100 persons between 15 and 59 years of age decreased from 45.8 to 36.0. At the other extreme, the number of people between 60 years or older for every 100 people of working age potentially active increased from 14.5 to 18.6. The dependency ratio of the younger age cohorts follows the differences in population dynamics among the major regions. In 2011, the ratio in Northeast is still higher than that found in the Southeast region ten years before. To contextualise the dynamics of the Brazilian population in a worldwide context, let’s look at the dependency ratio of young and elderly for different regions and countries. In 2011, the total dependency ratio in the world was 63.3 dependents for every 100 people of working age, of which the young component was 42.7 and the older 20.6. The population composition of each country holds specific challenges in relation to the development of social policies (Graphic 2).
  • 11. 10 Graphic 2 - Dependency ratio of young and old people, according to the major areas and selected countries – 2011. Source: World population prospects: the 2010 revision. New York: United Nations, Department of Economic and Social Affairs, 2011. <http://esa.un.org/unpd/wpp/index.htm>. Accessed:: out. 2012. Economic growth and reduction of social inequality rates In the 2000s, Brazil had an overall increase in the contributions to the economy driven by the growth of internal market; investments in social and physical infrastructure; and favourable external factors. The challenge has been, therefore, reconciling economic growth with social inclusion and sustainability. Dependency ratio of young Elderly dependency ratio
  • 12. 11 The average growth of the Brazilian economy increased from 1.7% between 1998 and 2002, to 3.5% between 2003 and 2006 and 4.6% between 2007 and 2010, year in which the country recorded the highest growth rate period: 7.5% (Graphic 3). In 2012, Brazil's GDP grew only 0.9% compared to 2011, contrary to the expectations of the Brazilian government, which initially estimated growth to be around 4.5%. The GDP per capita reached U$ 11,288, remaining almost stable (0.1%) compared to 2011. Asian Crisis Internacional Sovereign Crisis Nasdaq financial crisis crisis Average 1,7% Average 3,5% Average 4,6% Average 4,7% Graphic 3: GDP Growing (% per year). Source: IBGE.: Ministério da Fazenda. <http://www.fazenda.gov.br/portugues/docs/perspectiva-economia-Brazileira/edicoes/Economia-Brazileira-Em- Perpectiva-Mar-Abr12-alterado.pdf.> Accessed:: 25/04/2013. The country has harnessed the opportune economic momentum to reduce poverty and social inequality through policies that transfer incomes as well as an increase in the real minimum wage, from R$ 371.5 in 2004 to R$ 678.00 in 2013. According to the Institute of Applied Economic Research (IPEA), family income in Brazil has increased at a faster pace than the Gross Domestic Product (GDP) in the last ten years. According to the Institute, the per capita household income of the population increased 40.7% between 2003 and 2011, 13.3 points higher than the rate shown by GDP per capita, which rose 27.7% in the period (Graphic 4).
  • 13. 12 Median income / Average income / GDP per capita 5,2% is the payroll growth in 2012, while GDP per capita was stable Graphic 4: Evolution of the PNAD income measure and GDP per capita - in points. Source: IBGE. Made by: IPEA. <http://www.ihu.unisinos.br/noticias/518764-renda-das-familias-cresce-bem-acima-do-GDP-per-capita> Accessed: 25/04/2013 These actions had a positive impact on social indicators. Between December 2002 and December 2010, poverty in Brazil fell 50.64%, according to a study at the Center for Social Policy at FGV (Fundaçao Getúlio Vargas). According to the survey, the income of the poorest 50% grew by 67.93% between December 2000 and December 2010. In the same period, the income of the richest 10% grew by 10%. The country's goal is to begin 2014 with a level of poverty reduction of around 70% (Graphic 5). Expected fall of 69,4% Graphic 5: Poverty rate (% of population). Source: FGV. Elaboraçao: Ministério da Fazenda. <http://www.fazenda.gov.br/portugues/docs/perspectiva-economia-Brazileira/edicoes/Economia-Brazileira-Em- Perpectiva-Mar-Abr12-alterado.pdf> Accessed em: 25/04/2013 The challenge is not small: according to IBGE, in 2011, 8.5% of the population (16.27 million people) lived in extreme poverty situation. Of this quota, 4.8 million have household monthly nominal income equal to zero, and 11.43 million have income between U$ 0.60 and U$ 41.92. The Gini coefficient also registered a significant decline in recent years, from 0,559 in 2004 to 0,508 in 2011 (Graphic 6): % of population data *Estimates are based on data from IBGE (PNAD, PME and Censo) PNAD adjusted for Censo and SMEs
  • 14. 13 Graphic 6: Gini coefficient of income distribution monthly. Sources for all persons 10 years or older with incomes - Brazil - 1981/2011. Source: IBGE, PNAD, 1981/2011 Despite being very striking in Brazil, inequalities have shown a downward trend. In the period 2001-2011, it is observed that the top fifth percentile of the distribution of household income per capita (richest 20%) decreased their share from 63.7% to 57.7%, representing a loss of 6% . At the other extreme, the poorest 20% increased their share from 2.6% to 3.5% of total income (Graphic 6). The subsequent layers also increased their share. At the same time, the ratio of household income per capita of the richest 20% compared to the poorest’ 20% fell during the period: in 2001, the richest 20% perceived an income 24 times higher than that received by the 20% most poor. In 2011 this ratio fell to 16.5 times. However, the numbers show that it’s a long way to substantially change the Brazilian inequality scenario in the ownership of the total income, since the richest 20% still hold 57.7% of revenue, in contrast to just over 11% held by the poorest 40%. In terms of income distribution considering the colour or race, the great predominance of white people in the richest 1% of the population has also decreased. In this range of income in 2001, 9.3% were black or brown, a proportion that went up to 16.3% in 2011. It is, in any case, still a small participation, since black and brown people represent 51.4% of the population. With regard to the Human Development Index, between 1980 and 2012, the value of the Brazilian HDI grew from 0,522 to 0,730, ranking 85 in the world ranking (Graphic 7).
  • 15. 14 Evolution of the HDI Comparison: Brasil X BRICS Between 1980 and 2012, the value of the Brazilian HDI Brazil had the better performance than the average increased from 0.522 to 0.730. Currently, the country of BRICS in all indicators that are part of the HDI occupies the 85th position in the ranking *Average for countries with high development – 0.758 *Average of the countries of Latin America and the Caribbean – 0.741 Graphic 7: Evolution of the HDI. Source: Relatório 2012. Índice de Desenvolvimento Humano. <http://noticias.uol.com.br/infograficos/2013/03/14/Brazil-fica-na-85-posicao-no-ranking-mundial-de-HDI-veja- resultado-de-todos-os-paises.htm> Accessed: 25/04/2013 Labour market and employment formalisation A favourable aspect of the country is the retraction of unemployment (Graphic 8) and the significant expansion of formality of the Brazilian labour market during recent years. According to the database of the General Register of Employed and Unemployed of the Ministry of Labour in 2011, nearly two million jobs CLT (Graphic 9) were generated. Among these jobs, 925 537 were generated in the services sector; 452,077 in the trade sector; 222,897 in the construction industry; and 215,472 in transformation industry.
  • 16. 15 Graphic 8: Evolution of unemployment 2003-2012. Source: PME/IBGE Graphic 9: Creation of new posts of formal jobs 2003-2011. Source: CAGED Lei 4.923/65. <http://portal.mte.gov.br/data/files/8A7C812D350AC6F801351616010B546D/Brazil%20Dezembro%202011%20co m%20acertos.pdf>. Accessed: 25/04/2013 Emerging opportunities for young city dwellers? Despite the extra job creation and formalisation, the shortage of high-skilled labour in Brazil remains a great challenge. Currently, companies are being forced to import foreign high-skilled professionals. The main reason for the shortage is the lack of skills due to a failing basic and essential education system, especially in public education, and is particularly pernicious in the areas of technical training and higher education.
  • 17. 16 The lack of high-skilled labour obstructs the development of human capital in the country Because it limits the opportunities for young people, and thus also for economic growth, it has become essential to develop public policies which support the youth. The Brazilian Institute of Geography and Statistics (IBGE) categorises “young” as those between the age of 15 and 24 years old. The reason for this is that people in this cohort require special attention from public policy as they push the economy to create new jobs in labour market. On the other hand, it is the most vulnerable group due to lack of employment, low education and exposure to high rates of mortality due to external causes, including homicide and traffic accidents. IPEA's research (2009) shows that most young people are exposed to poverty and have great difficulties in obtaining an income and being included in the labour market. In addition, gender inequalities – as you see them in the Brazilian population as a whole – are being reproduced in this young age catgory, making it extra difficult for young females to find a job.. Chart 4: Distribution by position in occupation of occupied people in the age. ______________________________________________________________________________________________ Occupational Position 10 to 14 years 15 to 17 years 18 to 24 years 25 to 29 years 1996 2006 1996 2006 1996 2006 1996 2006 Employee with signed 1,9 0,1 17,3 11,1 38,2 41,7 40,3 47,2 Employee unregistered 27,3 22,5 46,7 50,3 33,6 35,1 23,3 24,5 Own bank account 4,4 7,5 5,6 7,0 11,2 9,8 18,8 15,3 Employee - - - - 0,9 1,0 2,6 2,7 Unpaid 66,3 69,9 30,3 31,4 12,4 9,9 8,6 6,0 Military or official - - - - 3,7 2,6 6,4 4,4 Source: IPEA, 2009, p. 119. About 2 million young people between 15 and 29 live in slums, the majority of this being black (66.9%), and 30.2% live in households with an income per capita of up to half the minimum wage. Approximately 84.8% of young people live in urban areas, being a little more than a third in metropolitan areas, marked by high unemployment; violence; segregation; and impaired quality of life. (IPEA, 2009, p.33) From 2001 to 2011 there was an increase of 10.7 percentage points in the proportion of people of16 years or older being employed in formal jobs. However, a significant portion of the population (44.2 million people) remains in informal employment. The North and Northeast had the lowest rates of formality (37.0% and 38.0%, respectively) and the Southeast and South the highest (66.1% and 64.6% respectively). The Midwest Region ranked third with 58.8% rate of formality (Graphic 10).
  • 18. 17 Graphic 10: Percentage of 16 years or older people engaged in formal work in Major Regions – 2001/2011. Source: IBGE, PNAD 2001/2011 The expansion of formality can also be analysed according to the position occupied by workers in the labour market (Graphics 11 and 12). In this case, the percentage of employees with a formal contract also varies by sex: in 2011, this amounted to 56.8% of men and 35.1% women. In the case of the latter, this may be seen as a result of the reduction of the number of domestic workers, who in 2011 posed six million women. This is due to several factors, such as increased education and increased employment in the service sector. The decrease is mainly between the maids without a formal contract. Brazil North Northeast Southeast South Midwest
  • 19. 18 Graphic 11: Percent distribution of men aged 16 or older, according to the job position – Brazil – 2001/2011. Source: IBGE, PNAD 2001/2011 Graphic 12: Percentage distribution of women aged 16 or older, according to the job position – Brazil – 2001/2011. Source: IBGE, PNAD 2001/2011 Employee Employee Domestic Domestic Military or Own bank Employer Work in production Other unpaid unregistered worker worker official account for own consumption work with with signed unregistered statutory or in construction for signed own use Employee Employee Domestic Domestic Military or Own bank Employer Workin production Other unpaid unregistered worker worker official account for own consumption work with with signed unregistered statutory or in construction for signed own use
  • 20. 19 The increased participation of women in the formal labour market occurred differently according to race or colour. From 2001 to 2011, the number of black or brown women rose by 13.3 percentage points in formal work, while among whites the increase was 11.9 percentage points. This is another indication that the country is slowly creating opportunities for social groups which were historically excluded or marginalized. That said, these groups still have lower incomes compared to whites of the same level of schooling. Informality is quite common among the elderly over 60 years old (71.7%) and among young people between 16-24 years of age (46.5%). Young people, who often are seeking their first job, and thus for whom some experience in the labour market is important, are more likely to accept jobs without a formal contract or enter into occupations with low formalisation. In 2011, of young people (16-24 years) who worked, 43.0% had an income below one minimum wage (U$ 326.38), and only 13.1% had an income greater than 2 times the minimum wage. It appears that most people in this age group have low incomes, even lower level than the minimum wage established by law, which may be associated with more precarious and informal work. Of them, 27.3% worked less than 40 hours per week, while, at the other extreme, 26.3% worked more than 45 hours per week. Apart from low wages and excessive working hours (which often compromises any study activities), the unemployment rate in this age group is two to three times higher than that of older adults. The good news is that in recent the degree of formalization in the labour market for this group increased, with a reduction of 12.7 percentage points in the rate of informality in the period 2006 to 2011 (Graphic 13). Graphic 13: Percentage of people 16 years or older engaged in formal employment, by age groups – Brazil – 2001/2011. Source: IBGE, PNAD 2001/2011 16-24 years 25-29 years 30-49 years 50-59 years Over 60 years
  • 21. 20 The data also suggests a relationship between schooling and formalisation. In 2011, the average years of schooling of the population in formal jobs was 9.2 years for men and 10.7 years for women. In informal jobs, the average was 6.1 years for men and 7.3 years for women. In both types of work, women’s average education is higher than that of men. The average yield in the main job of people of 16 years old or older currently is R$ 1,311.56 = U$ 786,94, which saw a real increase of 16.5% over the period 2001-2011. Women and informal workers were those with the largest real gains (22.3% and 21.2%, respectively). Chart 5: Average yield of the main work of persons 16 years or older, employed during the reference week and in formal and informal jobs, by gender (R$) – Brazil – 2011. ______________________________________________________________________________________________ Average yield of the main work of persons 16 years or older, employed during the reference week and in formal and informal jobs, by gender (R$) – R$ 1 = U$ 0,60 (2011) Occupied Formal job Informal job Total Men Women Total Men Women Total Men Women 1 311,56 1 473,44 1 080,01 1 601,00 1 777,33 1 351,80 876,12 1 021,88 663,83 Source: IBGE, PNAD 2001/2011. Although income inequality between men and women is decreasing, women still earn less than men (on average, 73.3% of men’s income). Among the better educated (12 or more years of study) inequality is even greater: women earn on average 59.2% of male income and in the Northeast, the inequality of income in this group is the highest with women earning as little as 57.4% of the male equivalent. The same phenomenon occurs among people of different colour and race: the average income of black people employed aged 16 or older is equivalent to 60.0% of the average income of the white population in this age group. In 2001, the income of blacks and browns was 50.5% of that earned by whites. Like in the case of women, inequality is higher among people with 12 or more years of study. One of the biggest problems that Brazil faces today is the lack of high-skilled labour for new jobs. Basic and fundamental education performance has improved, but didn’t keep pace with economic growth, forcing companies to import professionals to compose their staff. It is a loss of opportunity, especially for young people entering the labour market. PNAD data reveal that there was a substantial growth in Brazilian educational system during the last decade, especially in early childhood education (Graphic 14). The enrolment rate for children between 0-3 years old rose from 10.6% in 2001 to 20.8% in 2011, and for children between 4-5 years old from 55.0% in 2001, to 77.4% in 2011. The increased access to early childhood education has also had an impact on female occupation.
  • 22. 21 Graphic 14: The gross attendance rate to educational establishments by resident population. With regard to secondary education, the Northeast region deserves to be highlighted, since it recorded the highest growth rate, doubling the frequency of young people at school of appropriate age. Young people of black colour or mixed race and those belonging to the poorest quintile also saw their attendance rate in high school r rising significantly, reflecting the relatively low level from which they departed in the early period (Graphic 15). Graphic 15: The net attendance rate to educational establishments by resident population from 15 to 17 years old, in Major Regions; the fifth of the monthly household income per capita and the colour or race - 2001/2011. Source: IBGE, PNAD 2001/2011. The country also reduced the rate of early school leavers, which is the proportion of those who had not completed high school and were not studying. There was a drop of 11.5 percentage points in this rate, considering the years 2001 and 2011, from 43.8% to 32.2%. In 2011, early school leavers included more than half of young people between 18-24 years of age belonging to the poorest quintile, compared to the 9.6 per cent coming out of the richest quintile. In future, these young people can become a more susceptible group to social exclusion. 0-3 years 4-5 years 6 or 14 years 15-17 years Brazil North Northeast Southeast South Midwest 1st quintile 2st quintil e 3st quintil e 4st quintil e 5st quintil e White Blackor brown
  • 23. 22 The proportion of young people between 18-24 years of age with 11 or more years of full study increased substantially from 33.7% to 54.1% in ten years. Graphic 16: Average years of schooling of the population from 18 to 24 years, according to fifths of the monthly household income per capita - Brazil - 2001/2011. Source: IBGE, PNAD 2001/2011. No less important is the reduction of the illiteracy rate from 12.1% in 2001 to 8.6% in 2011. The biggest drop in the illiteracy rate occurred among young people, 15-24 years of age, whose rate fell from 4.2% to 1.5% during the period. Qualitatively speaking, there’s still a big difference between private schools, which are attended by only 13% of students in elementary and secondary education, and public schools. The divergent profile of the students of the two schools reflects the duality of Brazilian educational system: among the students who attended public school, only 8.6% belonged to the richest fifth, whereas more than half of the students in private school are among the richest 20% of the distribution of total household income. The travel time from home to work is also an important contributor to people’s quality of life. According to IBGE, although most of the employed population takes 30 minutes to get to work (65.8%), there was an increase in the number of people who face a period of more than thirty minutes. In the period 2001-2011, this time went from 32.7% to 35.2% for men and from 27.9% to 32.6% for women. Black people and people of mixed race are the ones who’s commute between home and their workplace takes longer: in 2011, it was found that 36.6% of blacks and browns recorded a journey exceeding 30 minutes, against 31.8% of whites. 1st quintile 2st quintil e 3st quintil e 4st quintil e 5st quintil e
  • 24. 23 In the case of the Southeast, where there are more people living in cities and the vehicle fleet is larger, the percentage of workers with a travel time exceeding 30 minutes is 41.9%, and 44.3% for black or brown people. The commute takes longer, especially for people with lower income, who travel from the suburbs to major centres. According to a study by the IPEA considering the nine largest metropolitan areas and the Federal District, the travel time for low-income workers (1st income decile) is on average 20% longer than that of the richest (10th decile), and 19 % of the poorest spend more than an hour's drive against only 11% of the richest. Children, adolescents and young people The approval of the Statute of Children and Adolescents (Law No. 8069 of 07.13.1990) represented an improvement in the rights of children, adolescents and young adults. The country has been trying to expand opportunities and create conditions to improve the quality of life for this population group. IBGE defines the young segment of the population as people between 15 and 24 years and sees education, labour market, social protection, human rights, health and violence as the main areas where public policies could support them6 . In 2011, the group up to 24 years old contained 78.5 million people, which corresponded with 40.2% of the whole population. In 2001, this segment consisted of almost half the population (48.2%), which means its proportion in the total population is decreasing (Graphic 17). 6 To analyse education, IBGE uses the age boundaries related to study levels, being the group 0-5 correspondent to kindergarten; 6-14, correspondent to primary and secondary school; 15-17, correspondent to high school; and 18- 24, correspondent to college. To analyse the labour market, IBGE considers the age boundaries established by the 20 th constitutional amendment, from 1998, that prohibits night works and danger works to anyone younger than 18 and any work to anyone younger to 16 (except to those who are in a learner condition, who can be 14 or older).
  • 25. 24 Graphic 17: Proportion of children, adolescents and young adults, according to age groups - Brazil - 2001/2011. Source: IBGE, PNAD 2001/2011. For the analysis of the living conditions of this group, it is necessary to take into account the family context and the environment in which they have to support their growth and development. In this sense, it’s alarming that people between 0-14 years old predominantly live in families with lower incomes, with 60.8% of them living in the first two fifths of the distribution of household income per capita. For the group between 15-24 years of age, the concentration in the first two fifths of the distribution is lower (43.5%), but is still considered high (Graphic 18). If we consider the multidimensionality of poverty, the first two-fifths of the income distribution are associated with low levels of schooling (early dropout and years of schooling below the national average) and poor sanitation (51.8% of urban households with income per capita up to ¼ minimum wage and 38.2% of those with more than ¼ to ½ minimum wage do not have simultaneous access to sanitation and electric lighting), reaffirming the vulnerable situation because of their low incomes. This means that 60.8% of people aged 0 to 14 years and 43.5% of those between 15-24 years old (mostly living in urban centres) live in inadequate housing and have routines marked by violence, unemployment and spatial segregation. According to IPEA, 2 million young people between 15 and 29 live in slums. Total 0-5 years 6-14 years 15-17 years 18-24 years
  • 26. 25 Graphic 18: Percentage distribution of persons 0-24 years of age, by fifths of the monthly household income (per capita) - Brazil - 2011. Source: IBGE, PNAD 2011. Health and violence One of the most serious facts related to the health of adolescents has to do violence and accidents. According to the Map of Violence of 2012, murders of young people up to 19 years increased by 376% since 1980, while the total number of homicides with victims of all age groups went up 259%. In many cases, the authors of the deaths are police officers. In 1980, the murders of children, adolescents and young adults accounted for 11% of total deaths in Brazil. In 2010, this proportion rose to 43%, according to the data from the Ministry of Health. In addition to the deaths, hospital admissions due to external causes are also high among young people. According to the Hospital Information System of SUS - SIH / SUS, in 2009, 12.9% of hospitalisations of people younger than thirty was related to external causes. 0-14 years 15-24 years 1st quintile 2st quintil e 3st quintil e 4st quintil e 5st quintil e
  • 27. 26 For men between 10 and 19 years old, external causes are the primary reason for admission in hospitals (25%). The same happens with the group of those between 20-29 years old. Among hospitalisation for external causes of children, adolescents and young males between 10-29 years old, 31.2% were due to falls, 20.3% of traffic accidents, 6.4%, the assaults, and 42.1% to other external causes. Rates of occupation of young people The employment rate of people between 18-24 years of age increased slightly between 2001 and 2011, from 59.4% to 62.2%. At the same time, the proportion of people who only worked decreased from 42.6% in 2001 to 47.8% in 2011, probably due to the heating of the economy in the period. Among those between 16 to 17 years old, the occupancy rate was 28.6% in 2011 (Graphic 19). At this age, it is expected that young people are still attending school. Thus, only 59.5% of them studied, whereas the other 20.0% worked and studied, and only 8.6% only worked. Compared with 2001, the proportion of these young people who only studied (53.2%) increased, while the proportions of those who worked and studied (24.6%) and those who only worked (10.5%) decreased. Graphic 19: Occupancy rate of persons by age groups, by Major Regions - Brazil - 2011. Source: IBGE, PNAD 2011. Entrepreneurship among young people Entrepreneurship has become popular in Brazil since the 90s, and contributed to the growth of the share of the private sector in the economy. The country has been trying to support entrepreneurial initiatives through the creation of supportive legislation, such as General Law of Micro and Small Enterprise in 2007 and Microentrepreneur Single Act in 2008. Brazil North Northeast Southeast South Midwest
  • 28. 27 According to results of the Global Entrepreneurship Monitor, GEM Research 2012, the rate of entrepreneurship in Brazil increased from 20.9% in 2002 to 30.2% in 2012, which means that currently about 36 million Brazilians are initial or established entrepreneurs on the market. In 2010, more than half of these entrepreneurs (56.9%) were less than 35 years old. The country follows the same trend of other nations, where most entrepreneurs tend to be young. From 2008, young people aged 18 to 24 increased their share among Brazilian entrepreneurs. The majority of entrepreneurs, however, are between 25 and 34 years (33.8%). Most initial entrepreneurs have an education equivalent to a high school diploma. Analysing Chart 6, it is found that typically, initial entrepreneurs have the following characteristics: male, aged 25-34 years, with a college degree, and income range between 6-9 minimum wages. Among established entrepreneurs, one finds most men, aged between 45 and 54 years with incomplete primary education level and an income that ranges between 3 to 6 times the minimum wage. 14.2% of the initial entrepreneurs are young people between 18 and 24 years. Among the established entrepreneurs, the presence of this age group falls to 2.8%. Chart 6: Specific rates of entrepreneurship established (TEE) according to demographic characteristics - Brazil and regions. ______________________________________________________________________________________________ Demographic Brazil North Northeast Midwest Southeast South characteristics Rate (%) Rate (%) Rate (%) Rate (%) Rate (%) Rate (%) Gender Male 17,4* 18,2 14,8 17,1 17,6 20,9 Female 13,1 12,9 12,0 12,6 13,8 13,3 Age group 18-24 years 2,8 4,0 1,5 2,6 2,6 5,5 25-34 years 11,2 10,4 8,9 11,1 12,8 11,7 35-44 years 20,6 22,4 19,6 18,9 20,6 22,4 45-54 years 23,9 26,3 23,5 23,6 23,3 25,3 55-64 years 21,3 29,4 21,0 24,3 20,1 21,4 Schooling No formal education 18,5 21,1 17,9 16,6 20,0 15,2 Incomplete primary school 21,2 24,1 19,2 20,1 22,6 20,7 Primary school 20,6 16,8 22,0 17,7 20,8 20,8 High school incomplete 9,6 9,4 7,7 11,2 8,5 14,6 High school 13,3 15,3 10,5 12,3 14,2 15,4 Incomplete college 9,0 7,0 6,4 10,9 9,6 11,3 College 13,1 8,7 13,0 15,0 12,4 15,9 Postgraduate incomplete 19,4 12,5 14,5 11,4 25,1 15,2 Postgraduate degree 17,5 9,6 9,1 10,1 15,7 31,6 Income bracket Less than 3 minimum wages 14,9 16,1 15,9 14,4 13,4 17,4 3-6 minimum wages 15,6 14,3 11,2 15,2 18,3 17,1 6-9 minimum wages 14,5 15,4 9,1 20,0 19,3 9,8 Over 9 minimum wages 14,0 22,6 9,5 10,4 10,8 18,6
  • 29. 28 Source: GEM Brazil 2012. The increase in years of schooling of the population and the decreasing dropout rate have rebounded on the rates of entrepreneurship, which indicates growth in the range of entrepreneurs with higher education. Between 1995 and 1999, 64% of new entrepreneurs had at least secondary education (up to 11 years of schooling). According to GEM, in 2012, that number had increased to 76.1%. It can be seen that as years of study increase, the rates of entrepreneurship among the population goes up. Brazil has, therefore, promising prospects in this field, if it continues with the policy of upgrading and expanding access to education. 2 Brazilian Megacities and Economic Opportunities for Young People 2.1 Sao Paulo Metropolitan region of Sao Paulo Composed by 39 municipalities, forming an area of 7947.28 km² (one thousandth of the Brazilian surface), the Metropolitan Region of Sao Paulo (MRSP) is a major demographic and economic hub of Brazil, responsible for 18.9% of the national GDP. Large private capital is concentrated in MRSP with being host to the most important industrial, commercial and financial complexes of the country. As a result, this region has a dense service network, which requires a system of articulated movement and transport of goods, people and information. With about 19.7 million inhabitants of which 98% lives in urban areas, almost one in every 10 Brazilians lives in this metropolis. That’s a contingent of 72% more than the metropolitan area of Rio de Janeiro, the second biggest in the country with 11.8 million inhabitants. This enormous population approximately counts 1.55 million young people aged between 15 and 24 years, who are frequently seeking decent opportunities in the labour market. Following, the main aspects of the characterization of MRSP will be presented, to discuss the conditions in which young people live in this great global metropolis. General data of MRSP Economy According to SEADE Foundation, the MRSP was responsible for 56% of the GDP of the state of Sao Paulo.
  • 30. 29 The following chart shows the representative of MRSP’s GDP, when compared to the GDP of Sao Paulo and Brazil. Figure 2: Brazil, State of Sao Paulo and Sao Paulo Metropolitan Region Total Gross Domestic Product in 2004. Source: EMPLASA, com dados do Instituto Brazileiro de Geografia e Estatística – IBGE. Population: Since the 1950s, the percentage of the rural population in Brazil is decreasing, and since the 1970s Brazil has become a country with a predominantly urban population. Since the 2000s, the percentage of urban population reached the level of 95,5%. Graphics 20/21: Brazil and Sao Paulo Metropolitan Region. Evolution of Urban and Rural Population: 1940 to 2000. Source: EMPLASA. http://www.emplasa.sp.gov.br/emplasa/indicadores_metropolitanos_emplasa/indicadores_metropolitanos.asp - Accessed: 20/04/2013 Besides the increase in life expectancy during recent decades and the increasing proportion of adults in the Brazilian population, it is noted that the participation of young people between 16 and 24 years old in the pyramid of MRSP is still substantial. (see Graphic 22). Metropolitan area of Sao Paulo State of Sao Paulo (US$ in billions) Brasil Metropolitan area of São Paulo--- Urban --- Rural --- Urban --- Rural
  • 31. 30 Another factor that stands out in the analysis of the pyramid is the rapid aging process of the population. Note that the latest data, from 2006, shows the predominance of the age groups 50-59 years. These data for the Greater São Paulo, the country's largest metropolis, are in line with other major cities in the country, other studies have demonstrated. The questions that arise then are significant and relatively nascent in the country: are there specific programs and public policies to attend these older layers of the economically active population? Are cities providing appropriate opportunities and conditions to them? Unfortunately, it appears that overall speaking; this is not yet the case.
  • 32. 31 Graphic 22: Metropolitan Region of Sao Paulo. Age pyramids: 1980, 1991, 2000 and 2006. Source: EMPLASA. http://www.emplasa.sp.gov.br/emplasa/indicadores_metropolitanos_emplasa/indicadores_metropolitanos.asp - Accessed: 20/04/2013 Education: The illiteracy rate of the population over 15 years old decreased from 5,57% in 2000 to 3.6% in 2010. The population aged 18 to 24 with high school education increased from 43.27% in 2000 to 58.58% in 2010 (SEADE - Statistical Bulletin). Education is an important factor in the labour market, since economic development increases the demand for more educated workers. (DIEESE, 2011). Employment and unemployment: In the MRSP, there was a reduction of the unemployment rate, which dropped from 17.9% in the biennium 2001-2002 to 12.8% in 2009-2010, due to the increase of job opportunities, which were a result of increasingly favourable market conditions in the region. (DIEESE, 2011) Young people in MRSP The share of the population between 16 and 24 years old in the Working Age Population (PIA)7 of MRSP decreased from 21.9% to 18.4% between 2000 and 2009, as shown in Graphic 23. Regarding the Economically Active Population (EAP) 8 a more significant reduction from 26.4% to 22.0% is noticed for the group 16-19 years old (10.1% to 7.6%), as Graphic 23 shows. Hereafter are presented some indicators extracted from a research done in 2011 by Ruth Cardoso Center about the importance of young people in the labour market of MRSP. Graphic 23: Composition of the population in active age, by age - MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.21). 7 Corresponds to people who’re older than 10 and live in MRSP. 8 Corresponds to the population in active age, employed or unemployed. 30 years or more 25-29 years 16-24 years 10-15 years
  • 33. 32 Graphic 24: Evolution of the participation of young people in the labour force, by age - MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.22). Graphic 25: Composition of the Unemployed Working Age Population, by age group - MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.23). Indicators:  Schooling: The proportion of occupied and studying young people fell from 27,7% to 24,7%, whereas the proportion of those who only work rose from 47,6% to 50,8%. 16-24 years 16-19 years 20-24 years 30 years or more 25-29 years 16-24 years 10-15 years
  • 34. 33 Graphic 26: Distribution of Working Population Economically Active Population (PEA) and inactive among Population, aged 16 to 24 years - MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.23). Regarding the PEA, school attendance among those who study and work decreased from 18.1% in 2000 to 17.0% in 2009. The proportion of those who just work increased from 35.9% to 39.0% during the same period. Among the inactive, the proportion of those who are in school increased from 13.6% to 14.4% - a result of increased inactive studying people aged 16 to 19, which rose from 25.4% to 29, 4%. The unemployment rate among those attending school decreased from 34.5% to 31.2%. Among those not attending, there was a small reduction, from 24.6% to 23.2%. Graphic 27: Distribution of Working Age Population by situation of regular employment and students, aged 16 to 24 years – MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.25). PEA - Studies PEA - Not study Inactive Study and work Just work Just study
  • 35. 34  Instruction level In general, especially to young people, there was an elevation in schooling years according to labour forces. However, the unemployment rates were more severe to those who didn’t invest in more years of study. According to DIEESE, schooling time in MRSP increased significantly, rising from an average of eight years of study in 2001-2002 to 9.2 in 2009-2010, providing a more qualified labour supply in the region. Graphic 28: Unemployment rates, by school attendance, among those aged 16 to 24 years old – MRSP (2000- 2009) (%). Source: Cadernos Ruth Cardoso (2011, p.26. According to the Ruth Cardoso Center’s research (2011), higher educational levels increase employability. However, the percentage of those who work and study among young people decreased and vice versa - the percentage of those who do work and study increased. The same study also states that the explanation for this phenomenon may be related to two aspects: the two areas (work and study) got more rigorous and demanding, requiring greater dedication; and an improvement of family life occurred, which incentivises study and later entry into the labour market. DIEESE (2011) points out that the level of instruction impacts more heavily on labour supply than on labour demand, which can lead to the following scenario: "This mismatch can cause major difficulties for occupational development for the more educated and “deviation of function”, a situation that occurs when the employee performs a function below their level of education. Under this hypothesis, there would be economic and social inefficiency, to the extent that there would be an underutilization of the more educated labour force and exclusion of those with fewer years of schooling "(DIEESE, 2011, p.56) Attends Not attending
  • 36. 35 Graphic 29: Composition of the labour force aged 16 to 24, by level of Instructions – MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.27. The rate of participation of those with primary education complete/incomplete High School education decreased from 70.7% to 63.0%; however, the unemployment rate, even though constant, stayed around 35%. For those who have completed high school/incomplete college education, the participation rate rose from 83.1% to 85.4%, and the unemployment rate remained at around 21% between 2000 and 2009. For those with higher education, the participation rate is approximately 92% throughout the whole period. Graphic 30: Unemployment rate among youth aged 16 to 24 years – MRSP (2000-2009) (%). Source: Cadernos Ruth Cardoso (2011, p.28). Incomplete elementary school High school/ Incomplete higher Elementary school/ high school incomplete College Incomplete elementary school Elementary school/ high school incomplete High school/ Incomplete higher
  • 37. 36  Position in occupation Between 2000 and 2009, the proportion of young workers with a formal contract increased from 46.1% to 59.9%, while employees without a formal contract increased from 26.4% to 22.8%. The proportion of young people in the public sector remained stable, at around 3.5%. Graphic 31: Distribution of workers by occupation in the main job, youngsters aged 16 to 24 years – MRSP (2000- 2009) (in %). Source: Cadernos Ruth Cardoso (2011, p.29).  Sectors of Economic Activity The distribution of young people among the sectors of economic activity in the MRSP shows that the importance of the industry decreased, and the importance of the tertiary sector increased: • The proportion of young people working in the industry decreased from 20.9% to 18.9% between 2000 and 2009. • In the construction industry, participation was almost stable at around 4.5% during the last decade. • Importance of trade increased, since it rose from 19.6% to 21.0% in total employment for this age group. • The service sector accounted for 52.2% of youth employment in 2009 (against 46.7% in 2000). • The participation of domestic workers fell from 7.6% to 3.0% - which suggests considerable improvement of female inclusion. Salaried with signed Salaried unregistered Young people in the public sector
  • 38. 37 Graphic 32: Distribution of employed persons by industry of main job, youngsters aged 16 to 24 years – MRSP (2000-2009) (in %). Source: Cadernos Ruth Cardoso (2011, p.31). According to DIEESE, the fastest growing occupational category for the young people of MRSP was the Support Category (12.9%) and the worst performance was observed in the executive category, with a decrease of 2.2% (Chart 7). Chart 7: Estimates of employed 16-25 years by occupational groups in MRSP - biennia 2001-2002 and 2009-2010. ______________________________________________________________________________________________ Specification Biennium (in thousand people) Variation 2001-2002 biennium 2009-2010 biennium Absolute (thousand people) Relative (%) Occupied 1.975 2.012 37 1,9 Management and planning 113 116 3 2,7 Entrepreneurs, directors and 36 34 -2 -5,6 managers Planning and organization 77 82 5 6,5 Execution 985 963 -22 -2,2 Skilled execution 143 137 -6 -4,2 Semiskilled execution 495 514 19 3,8 Unskilled execution 348 312 -36 -10,3 Support 611 690 79 12,9 Non-operational support 275 353 78 28,4 Office services 117 115 -2 -1,7 General services 219 222 3 1,4 Ill-defined 265 244 -21 -7,9 Source: DIEESE (2011, p.59). Occupational groups of Support stand out among the most dynamic during the 2000s, which are, for example: logistics, radio and telephone operators, transportation professionals (except drivers), and public security professionals, with growth of 35.2%, and administrative assistants, with 23.0%. Industry Building Trade Services Household services
  • 39. 38  Time of employment in the main job Young workers tend to stay shorter periods with the same company, declining between 2000 and 2009, and showing higher turnover of work, as follows: • The proportion of young people worked up to 6 months for the same company increased from 36.4% to 37.8%, as well as those between 6 months and 1 year (passing from 18.6% to 22.3%) and over 1 to 2 years (from 20.4% to 23.2%). • The proportion of those who worked for 2-5 years decreased from 20.5% to 15%. • The percentage of those who worked for more than 5 years fell from 4.1% to 1.8%. Chart 8: Indicators for occupied 16-25 years people, according to the compatibility - MRSP - Biennium 2009-2010. ______________________________________________________________________________________________ Attributes Level of compatibility 2009-2010 biennium Overqualified 23 Average age of workers (in years) Compatible 21 Underqualified 21 Overqualified 24 Time spent at work (in months) Compatible 17 Underqualified 13 Overqualified 81,2 Proportion of those who contribute Compatible 67,9 to Social Security (in %) Underqualified 49,0 Overqualified 1.248 Average labor income (in RS nov/10) Compatible 858 Undequalified 651 Source: DIEESE (2011, p.60).  Rate of employment9 While in the MRSP the unemployment rate fell from 17.6% to 13.8% in the period 2000-2009, among those aged 16 to 24 years the decline was smaller, but still high, despite retreating from 28.2% to 25.8%. The rate of women’s participation increased from 68.8% to 71.4% - indicating the higher interest of young women in the labour market. Although the female unemployment rate declined from 32.4% to 29.9%, it is still much higher than the male rate. 9 The unemployment rate represents the number of people who are unemployed under the EAP, which represents the amount of people that are unemployed and also those who are occupied. Unemployment rate = (number of unemployed/ EAP) x 100
  • 40. 39 Graphic 33: Unemployment rates, the total labour force and aged 16 to 24 years – MRSP (2000-2009) (in %). Source: Cadernos Ruth Cardoso (2011, p.33) .  Means of survival of the unemployed The information on the means of survival of young unemployed indicates that during the decade (2000-2009) there were no structural changes - the proportion of young unemployed rose from 58.1% to 60.1%, indicating that the obtain of resources comes from another family member who works.  Income The average monthly income of employed people between 19 and 24 years old fell between 2000 and 2009 from R$ 828.00 to R$ 374.00, while the average salary in the MRSP fell from R$ 1,594.00 to R$ 1,274.00 . Although declining, the average earnings of the young fell less: in 2000, the wages of young people meant 51.9% of the average salary of MRSP, reaching 58.8% in 2009. However, what caught the attention of the researchers were the salary disparities. Considering only the year of 2009, it was observed: • The average salary of men was of U$404.50, whereas the women’s reached U$340.50 (84,1% of men’s salary). • The average pay for non-blacks was U$ 401.00, while black people received U$ 330.50 (82% of the wages of non-blacks). • The wages of young people in the industry was U$ 403.00. In trade, the remuneration was U$ 173.75.  Ethnicity The transformations in the labour market in MRSP very much changed the situation of black people and non-blacks. Firstly, the quantity of workers among the young black population is higher than that among non-blacks - in the first case the age group 16 to 24 years was 24.1% of the labour force in 2009, whereas in the second this proportion was 20.9%. Total 16-24 years
  • 41. 40 Although in 2009 the unemployment rate among young blacks was 28.7% versus 24.1% of non- blacks, the difference between these two rates decreased from 6.3% to 4.7% between 2000 and 2009. Synthesis Unemployment in the age group between 16 and 24 years is still impressive. But, on the other hand, in the MRSP a decrease in informality was observed, what increased the percentage of those who are registered workers. In this context, however, the turnover of young people in their jobs is emphasized, as well as the decrease of the percentage of the population who work and study at the same time.10 Even though young people are getting more educated in the labour market, the high unemployment among the youth reveals the complexity of the barriers for young people to find a job opportunity. The difficulty to find work for those who have more schooling also reflects the gap between the growth of schooling rate in supply and the demand for workers.11 Even in a scenario of economic growth of the MRSP during the last years, with the decrease of the unemployment rate, inserting young people in the labour market is still a big challenge. The participation of young people in the composition of the metropolis’ labour force decreased – what can happen due to the increase of schooling years and the late insertion in the labour market – but the unemployed rate among people of this specific age increased. However, those who work passed to study less. Among those who don’t work and don’t study, the unemployment rate is much more severe. That indicates that, even with the qualitative increase of the demand (young people with more years of study), the offer (market) also got more exigent, probably asking for skills beyond those that are necessary for some specific function. This may be a factor that contributes to the high turnover of young people in their jobs. Besides that, nowadays the third sector of the economy absorbs more young people than the industrial sector, which used to be the most absorbent. In spite of the increase in the percentage of young people who are forms works, there was a fall, economically speaking. And the fact that the disparities of gender and race persist is very noticeable. Men still earn more than women, both among non-black people and black people. However, it is more prevalent within the black population. Therefore, it becomes visible that even in a favourable scenario, the MRSP is not as promising to young people as it should be. The opportunities for young people in the current context could be much better and bigger. 10 Cadernos Ruth Cardoso, 2011, p.37. 11 DIEESE, Qualificação e Mercado de Trabalho na RMSP, p.56.
  • 42. 41 2.2 Rio de Janeiro Metropolitan Region of Rio de Janeiro (MRRJ) After a long economic recession, the metropolis of Rio de Janeiro has regained economic momentum with the return of public and private investments, in the big projects and developments for the Word Cup, Olympic Games and pre-salt exploration. The metropolitan region of Rio de Janeiro (MRRJ) – also known as Great Rio – is composed of 19 municipalities, which represent 12% of the area of the country (5292km²), and hosts 6 of the 10 municipalities that contribute most to the State of Rio de Janeiro’s GDP, respectively 59 per cent. According to the CEPERJ Foundation, the metropolitan area concentrates the bank stock; infrastructure; and workforce, which are located mostly in state industries, forming a diversified industrial park. The MRRJ also brings together highly specialized services in the financial, commercial, educational and health sectors, as well as public agencies and institutions. With 72% of the country’s population, the MRRJ is also a space of social pressure marked by great contradictions, the most prevalent of which are: the unequal distribution of urban facilities and services; the increasing demand for dwelling marked by the expansion of slums; environmental degradation and the persistent depletion of natural resources; public insecurity and high crime rates. The municipalities of Rio de Janeiro and Niteroi are those that offer the best conditions to attract new government investment. Rio de Janeiro (which is the headquarter of the metropolis) is the main centre for the production and marketing of goods and services throughout the state. Niterói benefits from the proximity of Rio de Janeiro, especially after the construction of the Rio-Niterói Bridge. These municipalities are also the best scorers in social indicators. Lately, the city of Rio de Janeiro has seen industrial decentralization, with losses in productive capacity and in the employment generation. Niterói has the highest HDI (Human Development Index) of the whole state. At the same time, the city is absorbing a number of important industrial investments in sectors related to the supply chain of oil and gas. The rededication of shipyards stands out, with the reform and maintenance of platforms and offshore structures, besides the construction of vessels for the transportation of passengers. Other areas of the metropolitan region that should undergo significant changes in the coming years are the socioeconomic and spatial areas covering the City of Itaboraí and its neighbours – due to the deployment of the Petrochemical Complex of Rio de Janeiro - COMPERJ - and Itaguaí and neighbourhoods, with the implementation of the Atlantic Steel Company - CSA. Figure 3: Planned huge projects in the Metropolitan Region of Rio de Janeiro.
  • 43. 42 Source: Governo do Rio de Janeiro. Apresentaçao http://pt.scribd.com/doc/133892874/REGIAO- METROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-E-OPORTUNIDADES#download Economy Specialists have seen loss of economic dynamism in the MRRJ for some decades now. While Sao Paulo has developed a modern and dynamic industrial park, Rio remained with the traditional sectors that were gradually becoming obsolete. The importance of the third sector and the public sector grew, and in recent years we’ve seen the development of the oil industry, with recent growth of production in the state. In the MRRJ the service sector predominates, followed by the industrial sector, accounting for 71% of its GDP12 , according to IPEA. The GDP of the Metropolitan Region of Rio de Janeiro in 2010 was 275 billion dollars13 . Population In 2010, the population of the state of Rio de Janeiro reached 15.9 million inhabitants, of which 74.2%, i.e. about 11.8 million people (2010 Census), lives in the metropolitan region, Despite the present trend of an aging population, the composition of the population of MRRJ (Figure 4), is still significantly young with people predominantly in the range of 10 to 14 years, 12 http://www.ipea.gov.br/redeipea/images/pdfs/governanca_metropolitana/projeto_governanca_oficina1_rj.pdf 13 http://www.ceperj.rj.gov.br/ceep/GDP/GDP.html
  • 44. 43 and a significant presence in the range of 15 to 20 years, followed by the 21-24 years and 25-29 year olds.. There is a reduction in the rate of population growth in MRRJ during recent decades, declining from 1.18% (1991/2000) to 0.90% (2000/2010), and expected to decrease further during the period 2010/2020, as shown in Chart 9. Figure 4: Relation between the population and the MRRJ State of Rio de Janeiro. Source: Governo do Rio de Janeiro. http://pt.scribd.com/doc/133892874/REGIAO-METROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-E- OPORTUNIDADES#download. However, the slowdown in the rate of growth is not as strong in the periphery, as shown in Figure 4, referring to the periphery of cities MRRJ.The above Chart shows that the growth rate in periphery for the same period (2000/2010) is 60% (Itaboraí) to 346% (Marica) higher than the growth rate calculated for the MRRJ. Chart 9: Rate of Growth Metropolitan Region and the Municipality of Rio de Janeiro, in percentage. Source: Governo do Estado do Rio de Janeiro Human Development Index %/year 1991/2000 2000/2010 2010/2020 City of Rio de Janeiro 0,75% 0,80% 0,50% Metropolitan area 1,18% 0,90% 0,50% Metropolitan area State of Rio de Janeiro Metropolitan area without capital Capital RMRJ Rest of state
  • 45. 44 Regarding human development indicators, an improvement is seen between 1991 and 2000, with increased life expectancy, lowered infant mortality and illiteracy, an increase in average education and average income. These improvements are reflected in the HDI income, longevity and education. Chart 10: Human Development Indicators of MRRJ ______________________________________________________________________________________________ 1991 2000 Variation Index Rank Index Rank % Life expectancy (in years) 66,48 18 69,51 20 4,55 Infant mortality (per thousand live births) 29,56 15 21,60 10 -26,91 Children 10-14 years attending school (%) 88,52 15 96,10 16 8,57 Illiteracy of children 10-14 (%) 11,87 11 6,75 8 -43,17 Average schooling (Over 25) 6,79 2 7,61 2 12,08 Illiteracy of people aged 25 years or more (%) 9,25 22 6,34 19 -31,44 Average income 345,39 7 452,61 6 31,04 Gini coefficient 0,607 7 0,619 9 1,94 Percentage of indigenous 7,60 11 7,79 10 2,43 Percentage of poor 22,12 12 17,94 11 -18,89 HDI 0,76 9 0,82 11 6,75 HDI Income 0,75 7 0,79 6 6,03 HDI Longevity 0,69 18 0,74 20 7,30 HDI Education 0,85 6 0,91 9 6,95 Source:http://www.iets.org.br/biblioteca/Desenvolvimento_da_Regiao_Metropolitana_do_Rio_de_Janeiro.pdf Education According to SEBREA-RJ, following its research into the profile of workers of micro enterprises, there has been an increasing level of schooling over time. Graphic 34 shows the decrease of the participation of workers with low education and a significant increase of workers with 11 or more years of study, from 36% in 2003 to almost 50% in 2011. Most people employed in micro enterprises are 40 years of age or older. Following the movement of the labour force, the workforce in microenterprises is aging, since there is a considerable decrease in the participation of age groups up to 29 years. (SEBRAE, 2012, p.42)
  • 46. 45 Graphic 34: Participation of population employed in microenterprises by levels of schooling in MRRJ (2003/2010/2011). Source: SEBRAE (2012, p.42) Graphic 35: Participation of the population engaged in microenterprises by age group in MRRJ (2003/2010/2011). Source: SEBRAE (2012, p.42) Employment and unemployment: The Chart below represents the employment trend between 1980 and 2003, showing the gradual increase of the unemployment rate. Over this period, the service sector has absorbed most of the Economically Active Population (EAP), followed in 2003 by the commercial and industrial sectors. The number of registered workers decreased, so did the number of employers. In contrast, the number of unregistered workers and own-account workers increased. In general, there is a loss of average income in the construction industry and commerce, as opposed to relative growth in the service sector and industry. Furthermore, both employees (with and without portfolio) and the self-employed saw a decrease in their income. Chart 11: Labour Market Conditions in Metropolitan Region of Rio de Janeiro _____________________________________________________________________________________________ Uneducated and less than 1 year of study 1-3 years of study 4-7 years of study 8-10 years of study 11 or more years of study 25-29 years 0-24 years 30-39 years 40-49 years 50-64 years Over 65
  • 47. 46 1980 1990 1992 2001 2003 Population (in millions) 6,4 8,2 7,2 8,4 8,3 Participation rate 57,5 60,1 59,7 61,0 60,4 PEA (in millions) 3,7 4,9 4,3 5,1 5,0 Unemployment rate (%) 6,8 4,4 7,0 12,5 13,8 Total employed (in millions) 3,4 4,7 4,0 4,5 4,3 Distribution of occupied By sector Agriculture 1,6 1,4 2,0 1,0 0,9 Industry 18,1 15,9 13,4 9,5 10,5 Building 9,2 6,6 7,6 7,4 8,1 Services 50,1 53,9 54,8 58,3 53,5 Trade 13,2 15,5 15,3 17,5 19,6 Government 7,8 6,6 6,8 6,3 6,7 By occupation Employer 3,8 4,3 4,2 4,1 3,6 Employee with signed 57,2 52,3 45,0 41,6 40,7 Employee unregistered 13,9 15,5 18,4 20,2 19,6 Self-employed 17,1 20,2 19,2 23,4 21,8 Official 7,3 6,9 11,1 9,2 13,3 Unpaid 0,7 0,7 2,1 1,6 0,9 Average real incomes Total employed 993 780 747 865 863 By sector Agriculture 769 512 599 953 1461 Industry 1172 817 785 823 853 Building 720 738 521 664 579 Services 979 726 719 839 881 Trade 812 743 734 804 670 Government 1358 1331 1134 1529 1578 By occupation Employer 2784 2622 1929 2819 2622 Employee with signed 1098 766 815 814 799 Employee unregistered 430 405 353 514 480 Self-employed 616 604 608 780 725 Official 1289 1214 1080 1469 1437 Source:http://www.iets.org.br/biblioteca/Desenvolvimento_da_Regiao_Metropolitana_do_Rio_de_Janeiro.pdf However, according to a study of SEBRAE-RJ14 , since the mid-2000s there has been significant improvement, reflected in the decrease of the unemployment rate and increase of formalization, with income growth, especially after investments resulting from the World Cup, Olympics and discovery of pre-salt. The challenge is how to seize new opportunities and increase the potential of the region, especially in industrial development: chain steel, shipbuilding, logistics, petrochemical/chemical, 14 SEBRAE/RJ Service of Support to the Micro and Small Firms of the State of Rio de Janeiro – “the turning point and its effects on the labour marker of Rio de Janeiro” - - boletim QUADRIMESTRAL | JANEIRO 2012.
  • 48. 47 real estate/construction, mass consumption (food, clothing, furniture) and tourism, which the government estimates that has the potential to generate 800,000 new formal jobs (Graphic 36) Graphic 36: Perspective generation of formal jobs in MRRJ. Source: Governo do Rio de Janeiro. http://pt.scribd.com/doc/133892874/REGIAO-METROPOLITANA-DO-RIO-DE-JANEIRO-CARACTERISTICAS-E- OPORTUNIDADES#download. The Government's proposal is to generate new centres to counter the dominance of the city of Rio de Janeiro that polarizes currently 75% of jobs in the metropolitan region. Compared to other metropolitan areas between 2003 and 2011, the metropolis of Rio de Janeiro stood out with the highest growth rate, reaching heights of Sao Paulo. Even so, Rio continues with high informality and although the income and qualifications employers are increasing, the proportion of people undertaking is decreasing (SEBRAE, 2012, p. 7). Public security: Another factor that stands out in Rio de Janeiro, as in other Brazilian cities (São Paulo, Belo Horizonte, etc.) is the urban violence linked to the lack of employment and influence of traffic, resulting in social and economic losses. Graphic 37 shows that, between 1998 and 2001, the homicide rates were decreasing in the MRRJ, with slight rise between 2001 and 2002, entering again a decreasing process until the end of the period (2007). Estimated growth rate: 6% per annum Growth rate 2000/2009: 5,6% per annum (REAIS) Formal jobs (in thousand)
  • 49. 48 Graphic 37: Homicide rates Metropolitan Region of Rio de Janeiro per 100 thousand inhabitants, from 1998 to 2007. Source: Diniz, Lacerda e Horsth (2010, p.7). http://www.cchla.ufrn.br/seminariogovernanca/cdrom/ST4_Alexandre_Elisangela_Gilmara.pdf The Graphic also shows that the rates of death among young people aged between 15 and 24 years and 15 and 29 are superior to those presented by the total population. The lowest rates corresponded to homicides among women, prevailing homicides among men. The Government has adopted as a social action of public security the deployment of Pacifying Police Units (UPP). According to the Government, the UPP consists of a new model of public security and policing which promotes closer relations between the population and the police, together with the strengthening of social policies in the community, retrieving and integrating socially the territories that were occupied for decades by traffickers. There are currently running 32 UPPs, benefiting 1.5 million people15 . The role of the insertion of the UPPs is to reclaim territories previously dominated by drug trafficking and violence. In these territories, the young, mostly inactive, who are those that neither study nor work, or do not participate the school system or production system, were targets of organized crime and the economy of trafficking. After installation of the UPPs are initiated literacy, sport, leisure and culture activities, focused on children and youth. 15 The government has the goal of reaching 40 UPPs until 2014. . (Source: http://www.upprj.com/) Total homicides Homicides in women Homicides in men Homicides among youths 15 to 29 years Homicides among youths 15 to 24 years Rateper100.000inhabitants
  • 50. 49 Figure 5 : Urbanized slum under the Pacifying Police Units program (UPP). Source: http://fernandonogueiracosta.wordpress.com/2011/01/05/micronegocios-emergem-nas The police action after the pacification is the subject of much discussion in various fields, that question whether the change meant not only changing the "owner of the hill", due to the existing parcel of the Civil Police of Rio de Janeiro (also from other cities) linked to corruption and violence. In general, the results of the integration of UPPs show up positive, and to demonstrate that it would be necessary an approach that is not part of this research. In this universe, data shows the situation of young people in the metropolis of Rio de Janeiro between 1991 and 2003. Then the cut turns to the communities with UPP to analyse the recent situation of young people from the slums of Rio de Janeiro. Young people in the MRRJ The general characteristics of the labour market in the MRRJ during the 1990s followed the national trends, such as the maintenance of relatively high unemployment rate and growth of informal work (self-employed professionals or unregistered workers). Chart 12 shows the situation of young people (15-24 years) in the labour market in the MRRJ between the years 1991 and 2000. It is noticed that there was a reduction of 11.1% of young people in the PEA, and Machado (2001) states that this change has a positive side and may be linked to the reduction of introduction of young people (especially those younger than 15 to 17 years ) in the labour market, possibly accompanied by increased years of schooling. However, if some young people left the productive participation, those who stayed didn’t satisfactory
  • 51. 50 conditions, because the occupancy level declined 14.7% and the unemployment rate among young people rose by 3.7%. Chart 12: Stats Youth (15-24 years) in the Labour Market – MRRJ (1991/2000) ______________________________________________________________________________________________ 1991 2000 Variation Working-age population (PIA) 1.740.479 1.861.364 6,9 Economically active population (PEA) 899.594 800.147 -11,1 Participation Rate (%) 51,7 43,0 -8,7 Occupancy level 827.483 705.655 -14,7 Total Unemployed 71.782 93.782 30,6 Unemployment Rate (%) 8,0 11,7 3,7 Source: Machado (2001, p.5) Regarding the occupation of young people in 1999, Chart 5 shows that they were placed in a precarious labour market, with about 50% of young unregistered workers aged 15 to 17. It also calls attention the number of young domestic workers without portfolio, consisting of youth placed in family environment that is not theirs, servicing, cleaning, cooking, etc.. Young people living in slums are more vulnerable to difficulties in the labour market and in school, and are less able to access opportunities. Chart 6 shows that the percentage of youth aged (15-24 years) was 25.3% of Working Age Population, a higher percentage than the MRRJ in the same period, which was 20%. Chart 13 shows that the range between 18 and 19 years old has the highest unemployment rate (23.9%) and has a participation rate of 50.5%, a percentage that rises to 71% among young people 20-24 years. Chart 13: Composition of Occupation by Age Group – MRRJ/1999. ______________________________________________________________________________________________ Age group Total 15-17 18-19 20-24 Over 26 Total 100,0 100,0 100,0 100,0 100,0 Employee with signed 39,6 25,4 33,5 47,9 38,9 Military 2,0 - 7,4 5,0 1,4 Official statutory 8,0 - 1,7 2,8 9,2 Other employee unregistered 12,5 43,0 28,5 19,0 10,3 Employees without formal declaration 0,1 - - - 0,1 Domestic worker with signed 3,1 1,4 2,9 2,9 3,2 Domestic worker unregistered 6,3 7,0 7,4 5,6 6,4 Domestic worker without formal declaration 0,0 - - - 0,0 Self-employed 23,7 16,2 15,7 14,1 25,5 Work in prodution for own consumption 0,1 - 0,4 - 0,2 Work in construction for own use 0,1 - - - 0,1 Unpaid worker 0,8 6,3 1,7 1,7 0,5 Source: Machado (2001, p.7)
  • 52. 51 Chart 14: Composition of the Working Age Population by Age Group in the slums in 1999 ______________________________________________________________________________________________ Age group Favelas (%) 10-14 12,7 15-17 8,2 18-19 5,2 20-14 11,8 Over 25 62,0 NR 0,0 Total 100,0 Total of young (15-24 years) 25,3 Source: Machado (2001, p.8) Chart 15: General Data Labour Market by Age in Low Income Communities ______________________________________________________________________________________________ AGE GROUP PIA PEA OCCUPIED UNEMPLOYED PARTICIPATION RATE UNEMPLOYED RATE 15-17 16.368 3.660 3.079 581 22,4 15,9 18-19 10.494 5.304 4.037 1.267 50,5 23,9 20-14 23.727 16.766 13.827 2.939 70,7 17,5 Over 25 124.251 78.595 70.851 7.744 63,3 9,9 NR Total 254.613 107.854 95.292 12.562 42,4 11,6 Total of young (15-24 years) 50.589 25.703 20.943 4.787 50,9 18,6 Source: Machado (2001, p.9) The data show that the situation of young people in the low-income community is more critical than the situation found across the board in the Metropolitan Region. This young people have fewer years of education (with lower quality) and more difficulties to acquire specific knowledge (computer, language, etc.), resulting in lower chances of competitiveness in the labour market. The recent fieldwork IETS, conducted in partnership with FIRJAN slums with Pacifying Police Units, shows that a significant number of young people between 15 and 24 years old do not work or study, and "it’d still exist in the slums, until recently dominated by trafficking or militia, a great number of young people who would be neither studying nor working "(SEBRAE, 2012, p.22). The study of the IETS with FIRJAN aimed to draw the socioeconomic profile of slums16 covered by the UPP, elaborating a diagnosis of the demands and needs of the communities. The study mentioned issues related to demography, infrastructure, income, work, education, health and culture. The results can be checked below: 16 The study contemplated nine slums with UPPs: Babilonia, Batam, Cantagalo, Champéu Mangueira, Cidade de Deus, Ladeira dos Tabajaras, Pavao-pavaozinho, Providência, Santa Marta. It was later supplemented by further 7: Andaraí, Borel, Formiga, Macacos, Salgueiro, Sao Joao / Matriz-Quieto, Turano. The presented data correspond to the universes of the first 9 slums with UPPs, since the data are less summarized.
  • 53. 52 Graphic 38: Per capita income in the slums with UPP. Source: IETS (2010, p.4)  Poverty and income: The per capita household income of slums with UPP is U$ 315, and sharply below average in the Metropolitan Region of Rio de Janeiro.  Indicators of Labour market The research shows that despite the fact that the slum is a space marked by informality, formal work prevails. This does not mean higher salaries; on the contrary, the common type of jobs in slums is low-income jobs. This fact must consider that the participation of employers, by their own, and officials / military in MRRJ are higher than that found in the slums. Average per capita income of the favelas with UPP (Pacifying Police Unit): U$ 315
  • 54. 53 Chart 16: Indicators of labour market at UPP slums program ______________________________________________________________________________________________ Indicators Cidade Ladeira dos Cantagalo Providência Batam Pavão Santa Chapéu Babilônia de Deus Tabajaras Pavãozinho Marta Mangueira Working-age Population (PIA) 80,1% 84,6% 80,7% 80,5% 79,1% 80,0% 84,0% 86,9% 81,1% Economically Active 57,9% 63,3% 60,0% 50,4% 56,7% 64,7% 65,1% 65,1% 69,2% Population (PEA) Occupied 92,2% 90,4% 91,6% 89,5% 80,3% 95,0% 92,0% 95,4% 91,8% Unemployed 7,8% 9,6% 8,4% 10,5% 19,7% 5,0% 8,0% 4,6% 8,2% Not economically active 4,1% 36,7% 40,0% 49,1% 42,2% 34,0% 33,9% 33,7% 26,6% population Source: IETS (2010, p.7)
  • 55. 54 Chart 17: Indicators position in occupation at UPP slums program ______________________________________________________________________________________________ Indicators Cidade Ladeira dos Cantagalo Providência Batam Pavão Santa Chapéu Babilônia de Deus Tabajaras Pavãozinho Marta Mangueira Employee with 49,0 59,3 58,9 61,2 50,8 64,1 64,7 43,8 48,4 signed Employee 15,6 20,2 18,2 16,7 22,4 13,4 17,0 23,4 22,2 unregistered Domestic worker with 0,7 2,4 1,7 1,0 1,4 1,9 1,7 1,3 2,7 signed Domestic worker 1,9 2,2 1,8 1,4 0,3 1,6 2,3 5,5 5,4 unregistered Official and 2,0 0,5 2,0 0,9 2,2 0,1 0,9 2,6 3,2 military Own bank 13,8 7,7 12,6 14,4 18,2 13,2 10,8 20,4 15,8 account Employer 0,8 0,0 0,5 0,0 0,3 0,2 0,2 0,4 0,0 Ill-defined 16,3 7,6 4,4 4,5 4,5 5,4 2,4 2,6 2,3 Source: IETS (2010, p.7)  Occupation of young people of age 15-24: Nearly half of young people aged 15 to 24 of communities is not in school, being the most critical situation in the participation of young people who do not study and don’t work either. Despite the recent boosting of economy in the MRRJ, data of PME / IBGE of 2010 show that the percentage of young people between 18 and 24 years of age who do not work and aren’t seeking employment was 40.4%, compared to 22.1 % in MRSP. (SEBRAE, 2012, p.22)
  • 56. 55 Graphic 39: Percentage of children and young people who attend school. Source: IETS (2010, p.9) Chart 18: Occupation of young people (15 to 24 years old) ______________________________________________________________________________________________ Indicators Cidade Ladeira dos Cantagalo Providência Batam Pavão Santa Chapéu Babilônia de Deus Tabajaras Pavãozinho Marta Mangueira Level 50,6 55,7 40,8 40,6 33,9 59,2 55,1 57,1 50,0 occupied Unemployment 8,6 10,5 9,7 8,1 19,5 4,3 9,1 16,9 5,4 rate School-Work (%) Just study 29,9 28,7 34,6 32,3 30,8 20,3 25,9 22,5 32,4 Study and 18,5 15,6 13,5 13,8 5,3 10,3 19,6 15,0 13,5 work Just work 32,0 40,0 27,3 26,4 27,4 48,2 35,0 40,0 36,5 Not study and 19,5 15,7 24,6 27,5 36,5 21,2 19,6 22,5 17,6 Not work Labor Income (R$) 596,2 638,1 527,5 670,0 667,7 894,1 599,3 530,4 524,0 R$ 1 = U$ 0,57 (2010) Day of employment 41,0 39,8 38,6 42,3 43,6 47,3 42,9 42,6 46,2 (hours per week) 0-6 years 7-14 years 15-18 years
  • 57. 56 Source: IETS (2010, p.9) Synthesis: Understanding the situation of young people in the current context is important because of the economic and social role they play. According to Machado (2001), "in the purely economic side, they represent the future workforce, and therefore the potential capability of our country. On the social side [...] they are the main agents of change, able to more easily incorporate new ideas and change the course of society. " It is important to develop public policies that enable young people to have better life prospects, motivations, job opportunities and improvements of educational standards, especially in underserved areas of the metropolis. (SEBRAE, 2012, p.22). The pacified slums show up as a great opportunity for new business and formalization of enterprises that have existed informally, but were hidden by the traffic. Public policies for the inclusion of youth in the labour market should be alert to new opportunities that are presented, mainly because of the large companies that are beginning to turn their attention to the provision of services in these areas before marked by informality. They are companies in the area of telecommunication, cosmetics, and petrochemicals, among others, which can contribute to improving the training of young people. The insertion of sports activities, education and culture promoted by the UPPs can help preparing young people for the demands of communities and new opportunities that are presented, within this context, as supportive for the economic recovery in Rio de Janeiro, whose attention will be globally focused during the coming years. 2.3 Informal Territories in Reinvention: Spatial Externalities and Intangible Attributes Emerging on the Borders According to a recent article published by Columbia professor Saskia Sassen, not just the influence of cities will eclipse the power of nation-states in this century, but also we are facing the “seeds of an urban geopolitics and much of it is informal”: the rise of these new vectors would include in a short list of just seven urban emerging vectors, the region of Sao Paulo-Rio de Janeiro.17 As we have seen here, Sao Paulo, with almost 20 million people in its metropolitan region, emerged into a “megacity emergent power” in recent years as the locomotive of the new Brazil, 6th largest economy in the world. In Rio de Janeiro, there is an impressive “Phoenix 17 Saskia Sassen dominant urban vectors: 1. Washington/New York/Chicago; 2. Beijing/Hong Kong/Shanghai; 3. Berlin/Frankfurt/Brussels; 4. Istanbul/Ankara: Istanbul; 5. Sao Paulo/Rio de Janeiro/Brasilia; 6. Cairo/Beirut/Riad; 7. Geneva/Vienna/Nairobi. From: Sassen, Saskia, Ephemeral Kingdoms, Eternal Cities in The European, 11.03.2013.
  • 58. 57 phenomenon” of urban reinvention in course in the city since 2010: huge urban infrastructure works all over the city; favelas being pacified and urbanized; economic and political power finally being recovered after decades of decay and loosing power to Sao Paulo; the city receiving two major international events – World Soccer Cup in 2014 and Olympic Games in 2016; the emergence of an impressive recovered citizenship pride and happiness with the city. But what is appearing behind and besides this headlines-curtain in the city scene of these two megacities? What is happening in the concrete community stage of common people in these cities? Hybrid territories urban reinvention. There is an urban reinvention and social innovation process through people in this emerging cities hybrid territories. In many cities around the globe this century we are seeing the reflection on the territory of the end of the fordist era – cities built through huge infrastructures and for cars, without urbanity (local urban dimension). The recent transformations on the urban territory are based on strong demands by “urbanoids”, urban citizens reinventing places everywhere for people to meet, interact, share, innovate. Facing the challenge of ally master strategic plans and construction of huge infrastructures for the city with tactics of macro-micro infiltration, there’s an emergence of construction of urbanity, building tactics of appropriation of local dimension. Cities for people. Reinvented by people. In dense non-formal cities. Creating something new in between formal and informal realities. Hybrid territories. A common solution for those “out-of-the-box” city strategies is the growing role of civil society and new forms of governance, especially Triple Helix actions (universities plus businesses plus government), or projects which are led by the society or the private sector and politically sponsored by the local government. Besides this strategy, which we could see in many cities around the world nowadays, the basic particularity here in Sao Paulo and Rio de Janeiro is a less formal process of bottom-up creative and innovative situations in these cities territories. Sao Paulo and Rio de Janeiro are showing us new forms of urban reinventions, inventively connecting formal and informal, creating in between situations, non-orthodox programs. Emerges a contagious power of reinvention in these large urban clusters. People and cities that are being rediscovered in a creative and innovative way, rebuilding their destiny after periods of decline and generating hybrid situations contaminated by old pre-existing conditions and the emergencies of the new: opportunities, programs, events, people.
  • 59. 58 Edward Glaeser, urban economist, puts people skills, small entrepreneurships and strong connections environment and education as the basic attributes for cities reinvention in the 21rst Century.18 He also mapped innovation appearing in the favelas of Rio de Janeiro and Mumbay. Certainly not the same innovation that has been created in Silicon Valley, for instance. Brazilian megacities has upgraded social inclusion including access to education for the people in informal territories, but that educational environment is far way from Northern California Universities. The common point is not this but all others attributes and probably some intangible attributes presented on that hybrid dense emerging territory. A new urban ecosystem: liquid clusters in hybrid territories in reinvention process conducted by young local community people and showing to the entire society new possibilities of opportunities in emerging megacities this century (following Figures)19 . 18 Glaeser, 2012. 19 Most of cases and images from Heliopolis slum in Sao Paulo, captured from our Research Group: Smart Informal Territories lab (coordinator: professor Carlos Leite, Mackenzie Presbyterian University).
  • 60. 59
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  • 62. 61 3 Conclusions The are good news from macroeconomics and social inclusion Brazil emerged into the world scenario in the recent years as the emerging giant from Latin America. GDP has put the country as the 7th largest economy in the world. With the World’s 5th largest population of 193 Million, more than 85% lives in cities. Investments in the country are huge. International large events will occur in the Country in the next future: Soccer World Games in 2014 and Olympic Games in Rio de Janeiro in 2016. Urbanization process in the country shows a better well-balanced distribution of urban development (now we have 13 strong metropolises instead of just two huge megalopolis – Sao Paulo and Rio – although these two megacities together still represent a lot (population, GDP and opportunities). From 2002 to 2010, poverty in Brazil fell 50.64%, the income of the poorest 50% grew by 67.93% and despite being very striking in Brazil, inequalities have shown a downward trend. The Gini coefficient also registered a significant decline in recent years, from 0,559 in 2004 to 0,508 in 2011. Despite the existing challenge to be faced, there is an increasing on the degree of formal jobs; an increasing on the better education/more formalization relationship and an increased equality between men and women jobs opportunities. The employment rate of people 18-24 years of age increased slightly between 2001 and 2011, from 59.4% to 62.2%. the rate of entrepreneurship in Brazil increased from 20.9% in 2002 to 30.2% in 2012, which means that currently about 36 million Brazilians are initial entrepreneurs or established on the market. In 2010, more than half of these entrepreneurs (56.9%) had less than 35 years old. The country follows the same trend of other nations, where entrepreneurs are mostly young. Informal territories: innovation and reinvention are appearing on the largest urbanized slums of Sao Paulo and Rio de Janeiro, mainly. Informal economy and entrepreneurship are strong, as well as creative practices and bottom-up initiatives. The impressive urbanity is providing a collective intelligence inside these "liquid environments", with new forms of clusters led essentially by local young community. The pacified slums in Rio de Janeiro (UPPs), e.g., show up as a great opportunity for new business and formalization of enterprises that have existed informally, but were hidden by the traffic. Public policies for the inclusion of youth in the labour market should be alert to new opportunities that are presented, mainly because of the large companies that are beginning to turn their attention to the provision of services in these areas before marked by informality. They are companies in the area of telecommunication, cosmetics, and petrochemicals, among others, which can contribute to improving the training of young people, as well as the insertion of sports activities, education and culture promoted inside the UPPs.
  • 63. 62 But not so good for the young people and not good for the cities However, the numbers show that it’s long way to change substantially the Brazilian inequality scenario in the ownership of the total income, since the richest 20% still hold 57.7% of revenue, in contrast to just over 11% held by the poorest 40%. 60.8% of people aged 0 to 14 years and 43.5% of 15-24 years old (mostly living in urban centres) live in inadequate housing and have routines marked by violence, unemployment and spatial segregation. 2 million young people between 15 and 29 live in slums. In 2011 8.5% of the population (16.3 million people) lived in extreme poverty situation. Of this quota, 4.8 million have household monthly nominal income equal to zero, and 11.4 million have income between U$ 0.60 and U$ 41.92. inserting young people in the labour market is still a big challenge. Even though young people are getting more educated in the labour market, the high unemployment among the youth reveals the complexity of the barriers for young people to find a job opportunity. Even with the qualitative increase of the demand (young people with more years of study), the offer (market) also got more exigent, probably asking for skills. Besides that, nowadays the third sector of the economy absorbs more young people than the industrial sector, which was very representative in the past. Why it is not enough? Because of the historical gaps on the long-term fundamental issues. Brazil has to face some of its biggest issues such as better development of: Education: research shows some advance in quantity but not in quality; also shows a focus on graduation and not on elementary/basic school. Regional infrastructure: highways, railways, airports and ports). City infrastructure and management: urban mobility, urban security and social inclusion, public equipment, strong public policies on urban development (ordering the territory growth). Deficiency in education limits opportunities for young people, which fall in the informal economy receiving low wages and having excessive working hours. It is important to develop better and more public policies that, specifically, enable young people to have better life prospects, motivations, job opportunities and improvements of educational standards, especially in underserved areas of the metropolis outside of Sao Paulo and Rio de Janeiro. The country needs urgently to face the huge problem of an historic, endemic and growing corruption in the society, particularly on all levels of Governments and politics.
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