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Entrepreneurial solution or precarious problem? Making a living in neoliberal Brazil

As in many other countries, the coronavirus pandemic has deeply impacted the Brazilian public health system and taken the lives of thousands of people. It has also provoked economic, social and cultural changes. Individuals with few income alternatives or social protection have struggled to make a living in isolation. Despite the reopening of commercial establishments and other services in the second half of 2020, it is undeniable that professional life has been deeply affected. Unfortunately, the pandemic will continue to impact the economy and livelihoods as coronavirus cases increase.

At the end of August 2020, unemployment reached 14.3% of the population. Meanwhile, by the end of the year, the country may achieve an impressive milestone of having 10.9 million individual microentrepreneurs registered. This means that one quarter of the adult Brazilian population will be involved in microentrepreneurship. Microentrepreneurs are a legal entity created during the Lula government to formalize small workers who, by paying fixed and reduced monthly fees, gain access to credit and social protections. They need to have a maximum annual income of R$81,000 (around £11,175), can only have one registered employee, and cannot be part of other companies as owners or shareholders. The creation of this legal entity was a strategy to bring an essential group, the informal worker, into the formal market and thus generate revenue for the State, through the payment of taxes, while opening up labour rights to those without formal employment.

The big question is whether the income and living conditions are accessible to these workers? Data shows that half of this group received emergency aid created by the federal government to help low-income families during the pandemic. And even before this chaotic period, microentrepreneurs were experiencing difficulty paying taxes and retaining legal status. Being an entrepreneur in the current scenario may mean lower levels of income and, consequently, worse living conditions, despite the imaginary built around ideas of autonomy, freedom and quality of life that surround self-employment.

Not a new process

It is important to note that the growth of individual microentrepreneurs is not a new movement, but a process spanning more than a decade. It is best understood as the result of neoliberal rationality. On one hand, neoliberalism caused the deregulation of markets while governments relaxed labour laws. On the other hand, a discourse emerged emphasising self-initiative and demonizing stable wage labour as stagnant and undynamic.

Thus, a process that began in Brazil in the 1990s with gradual legal changes culminated, at the end of the first decade of the 21st century, in the institutionalization of the microentrepreneur. This reflected the rise of a subject who no longer saw themselves as a worker, but as a service provider or standalone enterprise.

Another important factor that helps to explain the ascendancy of entrepreneurship is informality. Especially in Brazil and Latin America, forms of work distant from stable wage labour are essential to the labour market. Whilst the Global North views with amazement the growth of the gig economy, for the Global South, particularly Latin America, these ways of working have always been part of daily life. As Will Monteith, in an earlier Issue of Futures of Work, argues, “There is therefore an urgent need to rethink ‘work’ from the perspective of the global majority for whom wage employment has never been the norm.”

These informal forms of work lack social guarantees and protections assume risk in the face of economic vagaries and remain unmediated by corporate structures. However, they are increasingly encompassed by the discourse of entrepreneurship in Brazil. It is common, for example, for the government and media to positivise longstanding informal forms of work as representative of entrepreneurship, urging their encouragement as vital parts of national economic growth.

Staying up to date

The problematization of the entrepreneurial alternative cannot, however, become an ode to previous forms of work. Past forms of work were not exempt from precariousness, exploitation and poor conditions. After all, we are still in a capitalist system. We must be realistic about the material and cultural conditions offered by the moment. The trends for the future of the world of work do not point to a decline in flexible forms of production and hiring. It is necessary to monitor and denounce precariousness, promoting guarantees of social protection and stimulating collective institutions to defend them. But we need to better living conditions for workers whilst adapting to new ways of working without a complete rejection of entrepreneurship or other flexible ways of working. After all, as I found out in recent research in São Paulo, for some people, self-proclaiming as an entrepreneur can mean the possibility of seeking a previously inaccessible professional identity. Moreover, the white population benefitted from waged employment to a much greater extent than the black population in Brazil. In this respect, entrepreneurialism might bring a greater degree of emancipation, even though there is still no firm guarantee of economic security.

How can we reveal the precarious side of the entrepreneurial solution and at the same time account for the new relationships between people and their work? Neoliberalism has changed individuals and created new subjectivities that transform the way we see ‘work’ today. We need to be critical about these changes and protect worker’s rights, but also occupy an analytical horizon compatible with this new world. Finding ways through this dilemma is one of the great tasks confronting the future of work in Brazil and Latin America.

 

Brauner Cruz Junior has a bachelor’s in Public Management, at Fundação Getulio Vargas (FGV), and a MPhill in Human and Social Sciences, at Federal University of ABC (UFABC), both in Brazil. He investigates neoliberalism, entrepreneurship, and sociology of work.

Image credit: Kelly Sikkema on Unsplash