Brazil Record-Low Unemployment Creating Scarcity of Maids

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A maid watches children go down a slide at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012. Close

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A maid watches children go down a slide at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012.

For a decade Geane Menezes earned no more than $250 a month cleaning the home of a wealthy Brazilian family. Now she sells souvenirs at an airport store in the northeastern city of Recife and plans to open a business.

“I feel more valued and earn twice as much,” Menezes, 34, said while tending the store’s hammocks and cashews.

Menezes isn’t the only one hanging up her apron. With unemployment in Latin America’s biggest economy at record lows, poor women who for decades formed a pool of cheap domestic labor for the middle and upper classes are pursuing better-paying, higher-skilled jobs. The result is a shrinking supply of help, which has allowed the remaining nannies, maids and cooks to command wage increases at more than double the rate of inflation since 2006.

Costs could rise even faster, and leave maid service unattainable for the middle class, if Congress approves legislation guaranteeing domestic servants’ overtime pay, annual bonuses and other rights currently enjoyed by the rest of Brazil’s workforce. The bill’s sponsor, Congresswoman Benedita da Silva of the ruling Workers’ Party, says such benefits are long overdue. Even with recent strides reducing poverty, Brazil ranks 14th worst in income equality, below Nigeria and Russia, among 154 countries listed in the World Bank’s 2012 World Development Indicators.

Photographer: Dado Galdieri/Bloomberg

A maid sits with a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012. Close

A maid sits with a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012.

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Photographer: Dado Galdieri/Bloomberg

A maid sits with a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012.

“Today I wouldn’t have to be a maid,” said the 70-year-old Silva, who in her youth worked as one in Rio de Janeiro while living in a shantytown. “The labor market offers much better opportunities.”

Reducing Poverty

Brazil led Latin America in reducing poverty over the past decade, with its middle class -- those defined as earning $10 to $50 per day -- expanding by over 40 percent, according to a World Bank study published this month. Behind the progress is low inflation and economic stability that led to 3.8 percent average annual growth over the decade, plus an expansion in anti-poverty spending during the 2003-2011 presidency of Luiz Inacio Lula da Silva, a former metal worker. Brazil’s nationwide unemployment rate plunged to a near-record 5.4 percent in September, less than half the level a decade earlier.

As Brazil becomes more upwardly mobile, the number of domestic employees has fallen, to 6.7 million last year from 7.2 million in 2009, according to the latest household survey by the national statistics agency.

Average Age

The average age is also rising, as Brazilian youth stay in school longer, training to win better-paying jobs where a shortage of skilled labor currently exists, such as in engineering and commerce. Only 5.8 percent of maids are ages 18 to 24, compared with 14.8 percent for the total workforce, according to a 2011 finance ministry study. Traditionally, poor women in Brazil began cleaning house in their 20s and sometimes even as teenagers.

Photographer: Dado Galdieri/Bloomberg

A maid holds a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012. Close

A maid holds a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012.

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Photographer: Dado Galdieri/Bloomberg

A maid holds a child at the Baixo Bebe beach playground in Rio de Janeiro, Brazil, on Nov. 19, 2012.

“The maid’s daughter no longer wants to be a maid,” said Marcelo Neri, an economist who researches poverty trends and is president of the federal government’s Institute for Applied Economic Research, known as IPEA. “She’s studying, going to high school, and wants a better profession.”

Brazil’s northeast, from where Menezes and Lula hail, has for over a century produced a steady migration of workers to cities in the industrialized south, many of them ending up working as maids.

Now, the jobs are being created in the northeast, where economic growth outstrips the rest of the country, and maids are returning home, said Fernando Aquino, president of the regional economy council of Pernambuco state. Italian automaker Fiat SpA (F), which is building a $3.5 billion reais ($1.7 billion) factory in Pernambuco, and Dallas-based Kimberly-Clark Corp. (KMB) are among manufacturers establishing a presence in the region to tap its labor market and growing consumer class.

Night School

Menezes said she’s making plans to attend night school to study tourism and hospitality, and one day wants to open her own beachfront store in Recife. She said she’s confident that government-provided credit will help her achieve that goal.

“I hope I don’t have to go back to cleaning,” she said.

Under Lula, Brazil boosted spending on the poor. He expanded his flagship Bolsa Familia welfare program to the poor to 12.7 million in 2010 from 3.6 million families in 2003, according to IPEA. His protégé and successor Dilma Rousseff is more than doubling his housing program, which subsidized credit for 1 million mostly poor families to buy their first home through August 2012.

Dwindling Numbers

The dwindling numbers of those willing to work as maids makes finding employees challenging for placement agencies such as Maid in Brasil. It screened 20 women per day offering their cleaning services when it began connecting Rio de Janeiro families with help in 2008, co-director Magaly Mega said. Now it’s lucky to interview just seven maids a day, most of whom are less qualified, demand more pay, and resign without hesitation if their employer is too demanding, she said.

“There’s been a radical change,” Mega said in a phone interview. “Before there were a lot of people willing to be live-in maids, and everyone accepted the minimum wage right away,” she said. “Now that’s very rare.”

The shortage is also reflected in wages for domestic workers which increased 83 percent since 2006, more than double the rate of inflation, according to the national statistics agency. The average monthly wage for domestic workers was 723 reais in September, according to the statistics agency. Brazil’s legal minimum salary is currently 622 reais.

Maid’s Quarters

The change affects cultural attitudes, reflected even in how homes are being designed. Fewer middle class homes are being built with sleeping quarters for maids, and service elevators traditionally used by the help are no longer a fixture.

“The way people care for their own houses, using washing machines more and contracting day help instead of live-in maids is a sign of modernization,” IPEA’s Neri said. “This is difficult for families accustomed to being served.”

The jobs boom has contributed to a 91 percent increase in the incomes of Brazil’s poorest 10 percent over the past decade, more than five times faster than the earning power of the richest 10 percent, according to an IPEA study published in September.

Yet, almost three-quarters of domestic employees are paid under the table, depriving them of legal rights such as pensions.

‘Damned Inheritance’

Congresswoman Silva said that her proposed constitutional amendment, which earlier this month passed a lower house committee by a unanimous vote, aims to end such practices and be another step toward doing away with Brazil’s “damned inheritance” of economic injustice.

Brazil was the last country in the Western hemisphere to abolish slavery, in 1888, and its legacy continues to penetrate the country’s social fabric. While the proposed law ensures additional rights, added costs may lead employers to lay off as much as 10 percent of maids currently with contracts, according to Mario Avelino, who heads a non-profit organization called Legal Domestics, which promotes labor rights for maids.

“It’s like a shot in the foot,” Avelino said by phone from Rio de Janeiro. “The upper class won’t give up having a maid. It’s the middle class, where both parents have to work, that will feel the impact.”

Rosane Aguiar, a pediatrician with a house in the city Santo Antonio de Padua in Rio de Janeiro state, has lost count of how many maids she’s seen come and go over the last five years, and said higher wages for less work hours makes the expense unsustainable.

“On weekends, I’m in the kitchen and I’m washing clothes,” Aguiar, 54, said in a telephone interview. “We have to get used to the American model that is coming here. The middle class is left with little alternative.”

To contact the reporter on this story: David Biller in Rio de Janeiro at dbiller1@bloomberg.net; Raymond Colitt in Brasilia Newsroom at rcolitt@bloomberg.net;

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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