End of the 6×1 scale should not bring productivity gains, says economist

The proposal to end the 6×1 scale and reduce the working day from 44 to 40 hours per week, being debated in the National Congress, is unlikely to produce the promised productivity gains. This is the assessment of economist Felipe Tavares, from BGC Liquidez, in an interview with Hora H this Thursday (11).

The economist assessed that assuming that there will be an increase in productivity with a change in scale is a very strong premise.

"Brazil has significant difficulty in achieving clear productivity gains in our economy, especially in our recent history. We have had difficulty finding these productivity gains for 40, 50 years," said Tavares.

According to him, the argument in favor of the measure is based on mathematical reasoning: if the same quantity of products is generated with fewer people, productivity increases.

However, for this to occur, it would be necessary to ensure that the production volume remains constant without an increase in the number of workers. "The probability of you gaining productivity is very small," he said.

For Tavares, the most likely scenario is that companies will need to hire more workers to maintain the same level of production, generating a significant increase in costs.

"You will have a complete disruption of the business community's cost structure, because they will have to hire more people to be able to close what they had before. This will put pressure on prices, this will generate inflationary disruption", he warned.

Most affected sectors
The economist highlighted that the most affected sectors would be services, such as commerce, hotels and shopping malls, which operate seven days a week with long working hours. In these cases, the need to cover shifts may require hiring more employees than expected.

Tavares also highlighted that around 95% to 97% of companies in the commerce sector are micro and small, without a robust margin to absorb additional costs. "If the guy can't pass this on to the final price, he faces the threat of having to close his doors," he said.

In addition to cost pressure, Tavares pointed out another obstacle: the shortage of labor in sectors such as supermarkets and commerce. "There are several activities that struggle to find people in the way the working day is set up", he said.

The economist also warned of possible negative social consequences of the measure. In his opinion, the inflationary effect combined with the eventual reduction in production could deteriorate families' purchasing power, leaving them in a worse situation than they are currently in.

"It's very cruel to sell the agenda as if you will increase productivity, that you will earn the same thing and work less, because sometimes that won't be possible", concluded Tavares.

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Source: CNN