Labor rigidity hinders productive gains, says professor

A survey by the CNI (National Confederation of Industry) shows that 97% of Brazilian industries would be impacted by a possible reduction in working hours. The measure is rejected by 73% of businesspeople in the sector and has reignited the debate about the productivity of the Brazilian economy.

The survey, carried out with 1,300 small, medium and large companies in the extractive, manufacturing and construction industries, shows that 85% adopt a 44-hour week.

In addition, 85% foresee an increase in employee costs, 82% estimate an increase in supplier costs, 70% point to a loss of competitiveness and 68% project a drop in production volume.

In an interview with CNN Money, Ibmec-RJ Economics professor, José Ronaldo Souza, stated that Brazilian productivity has been practically stagnant since the 1980s. According to him, productivity is the economy's ability to grow above the growth of investments and workforce.

"Brazil is falling behind. Instead of reducing the gap in relation to the leading countries, we are increasing this gap", he said.

In the economist's assessment, the rigidity of the labor market is one of the factors that explain this performance, alongside the low quality of education, professional training, the tax system and regulatory insecurity.

For the professor, the discussion about reducing working hours without prior gains in productivity reverses the economic logic.

"In order to reduce the workload, it is important that there is an increase in productivity", he stated. Souza also argued that not even countries like France prohibit working in six days, due to the greater flexibility of their legislation.

"There's no way we can improve productivity by law", he added.

The professor also warned that the change could increase informality and the judicialization of work relationships, increasing costs and reducing investments. According to him, sustainable wage gains depend on increased productivity and not just changes in legislation.

"You only have a sustainable increase in income in the long term if there is an increase in productivity", he concluded.

The texts generated by artificial intelligence on CNN Brasil are made based on video cuts from the newspapers in its programming. All information is investigated and checked by journalists. The final text is also reviewed by the CNN journalism team. Click here to find out more.

Source: CNN