End of 44-hour work week in Brazil is manageable, study shows
The costs of a possible reduction in working hours to 40 a week would not be unlike the impacts seen in historical adjustments to the minimum wage in Brazil – which indicates that the labor market is fully capable of accommodating the measure.
The conclusion can be found in a study published Tuesday (Feb. 10) by the Institute of Applied Economic Research (IPEA), which looks at the economic effects of a possible slash in the current standard 44-hour work week, associated with the 6 to 1 schedule (one day off after every six days of work).
The reduction in working hours is believed to increase the cost of the workforce by less than one percent in major sectors, such as industry and commerce, but some service sectors that depend on more labor may need public policies, the institute reported.
Debate
The reduction of the work week from 44 to 40 hours and the end of the 6 to 1 shift schedule entered Brazil’s political radar for good early this year.
On Tuesday (Feb. 10), lower house speaker Hugo Motta said that one of the chamber’s priorities this year is the vote on these labor rights. On his social media, Motta wrote that representatives may begin deliberating on the issue in May.
In a message sent to Congress last week, President Luiz Inácio Lula da Silva also places the matter among the government’s priorities for the first half of the year.
Costs
The 40-hour work week would increase the cost of formal workers, who are guaranteed labor rights, by 7.84 percent. However, within total operating costs, the effect is smaller, says researcher Felipe Pateo.
“When we look at the operations of large companies in commerce and industry, we see that labor costs sometimes represent less than 10 percent of a company’s operating costs. The high costs are in building up inventory and investing in machinery,” he pointed out.
On the other hand, companies that provide services for buildings – such as security and cleaning – may see a greater impact, 6.5 percent on operating costs. In these cases, a gradual transition to the new working hours would be necessary. The same would apply to small businesses, which may find it even more difficult to adapt their work schedules, Pateo argues.
“We see that this transition period is also crucial for smaller businesses. And you need to open up possibilities for hiring part-time workers, for example, who can eventually cover weekend shifts if the reduction in working hours makes this process difficult,” he notes.
Combating inequality
The study also points out that 44-hour work weeks are concentrated among workers with lower incomes and less education. In the expert’s view, reducing the work week can reduce inequalities.
“By reducing the maximum working week to 40 hours, we are putting these workers who are in lower-paid jobs with shorter employment periods on an equal footing, at least in terms of the number of hours worked. And we end up raising the value of these workers’ hourly wages. This brings them closer to the conditions of workers in better employment situations,” he says.
According to the study, the average remuneration for those who work up to 40 hours a week is BRL 6,200. Workers on 44-hour weeks, on the other hand, earn less than half that amount. These workers with longer working hours also have lower levels of education. More than 83 percent of workers with a high school diploma or below are in this situation – a rate that falls to 53 percent among those with a college degree.
The vast majority of the 44 million workers registered in Brazil’s Annual Social Information Report (RAIS) in 2023 worked 44 hours per week. In total, they number 31,779,457 – 74 percent of those who had their working hours reported. In 31 of the 87 economic sectors surveyed, over 90 percent of workers have working hours above 40 hours per week.
The RAIS is a mandatory reporting system in which Brazilian companies provide the Ministry of Labor with data on their employees, employment relationships, and salaries.
