Brazil Senate passes bill to lower employer costs
Reuters, Tuesday, January 13, 1998 at 20:38
BRASILIA, Jan 13 (Reuters) - The Brazilian Senate on Tuesday approved a bill that would allow employers to offer cheaper labor contracts when hiring short-term workers, a reform that the government says is badly needed to combat unemployment.
The bill, which has already been passed by the lower house of Congress, was approved by the Senate by 51 votes in favor and 23 against. It now requires the approval of President Fernando Henrique Cardoso.
Government officials said contracts allowed under the bill would cut the cost of hiring temporary workers for a maximum of 18 months by an average of 36 percent.
Brazilian labor legislation is widely considered outdated and among the world's costliest. Taxes and other contributions, which increase the cost of employing workers in Brazil by up to 70 percent, have helped nurture a flourishing informal economy in which workers are hired without any kind of benefits, social security or unemployment guarantees.
The Cardoso administration has pushed to make short-term hirings more flexible with the financial crisis in Asia clouding Brazil's economic outlook for 1998.
For the next 12 months, economists see slower growth and increased unemployment for the Brazilian economy, Latin America's largest.
In a radio address on Tuesday Cardoso warned the effects of globalization and the recent turmoil in the Pacific Rim would mean a tougher and more competitive world economic environment.
"Imported industrial goods are a constant threat to Brazilian jobs," he said.
The government and labor organizations disagree over how recent economic reforms and the elimination of trade barriers have affected unemployment in Brazil.
While government data show unemployment hovering at relatively low levels of between 5 and 6 percent, a leading labor economic institute recently measured joblessness in the city of Sao Paulo, Brazil's economic heartland, at about 16 percent.
adrian.dickson@reuters.com))
Copyright 1998, Reuters News Service |
