End of the 6×1 scale would generate a drop in GDP and informality, experts say

Experts project relevant economic impacts with the advancement of projects towards the end of the 6×1 work scale in the National Congress.

Currently, the Chamber of Deputies analyzes the PL (Bill) proposed by the federal government on the topic, while the PEC (Proposed Amendment to the Constitution) that promotes the reform has been blocked in the Senate since May 28, when it was approved by the other House.

Given the still uncertain scenario regarding the approval of the agenda, a study prepared by Fiemg (Federation of Industries of the State of Minas Gerais) indicates that the change in scale could cause, over ten years, a reduction of up to 16% in GDP (Gross Domestic Product) and the loss of 18 million jobs.

To CNN Money, Fernanda Ribas, labor manager at Fiemg, explained that the proposed change concerns the constitutional limit of the working day, currently set at 44 hours per week, which would increase to 40 hours.

According to her, any specific regulation on the topic should only come after the approval of a PEC.

Regarding the effects of the measure on the economy, Ribas cited small businesses as an example. According to Fiemg's labor manager, companies such as bakeries would have to expand their teams to maintain the same level of operations, which would increase costs and impact the final price of the products.

"Everyday bread will become more expensive", he said.

The expert also noted that the effects of change would not be restricted to the private sector. In her assessment, hospitals and other public services that needed to increase the number of employees to preserve service to the population would also face increased expenses.

Pressure for approval and job reductions
Daniel Duque, associate researcher at FGV Ibre, indicated that the government has prioritized the implementation of the reform without showing interest in debating transition mechanisms, seeking political results.

When commenting on possible consequences of the proposal, Duque pointed out that the increase in labor costs and greater rigidity in the distribution of hours worked could result in a reduction in formal jobs.

The researcher highlighted three alternatives that could be adopted by companies in this scenario: reducing the number of employees, investing in automation and technology or transferring workers to informality, including through registration as MEI, as a way of adapting to the new rules.

Change on the 6x1 scale could reduce GDP by 16% in ten years, says expert | MONEY NEWS

According to Duque, in sectors with a large use of labor, the increase in costs tends to be passed on to the end consumer. For him, when there is an increase in employment-related expenses, the alternative available to many companies is to readjust the prices charged for services or products.

When asked about the most appropriate way to implement the reduction in working hours, the researcher defended a gradual and segmented transition. According to its assessment, the measure could be initially applied to certain sectors or groups of companies and progressively expanded, allowing the analysis of impacts before wider adoption.

Government withdraws urgency from PL
The urgent withdrawal of the government's PL regarding the end of the 6×1 work schedule unlocked the agenda of the Chamber plenary this Tuesday (16).

Planalto responded to the appeal of the president of Casa Baixa, Hugo Motta (Republicanos-PB), and now deputies can return to deliberating on projects that had been on hold since the end of May.

Motta already estimated that the work would be completed this week. This is because, if the government did not remove the urgency, the PL at the end of the 6×1 would be voted on this Tuesday with a text identical to that of the PEC.

The rapporteur appointed for the new bill, deputy Leo Prates (Republicanos-BA), also reported on the PEC and has now released a report similar to the one presented in the amendment proposal. The withdrawal of the urgency was formalized during the leaders' meeting.

End of 6x1 should increase unemployment and informality, says researcher | MORNING CALL

Source: CNN