Brazil informal labour inequality

In July 2026 Brazil highlighted the plight of its informal workforce across multiple sectors. On 22 July, a campaign for International Domestic Workers Day drew attention to the 5.6 million paid domestic workers, the overwhelming majority women and Black, who earn roughly 60 % less than other employed women and often lack contracts or social‑security contributions. Poverty is common, with a quarter living below the poverty line, and authorities called for greater formalisation through eSocial, the Carteira de Trabalho and stronger labour inspection.

Four days later, the government outlined new INSS contribution options for the 38 million Brazilians who are self‑employed or otherwise informal. A Sebrae study showed that less than one‑fifth of informal entrepreneurs actually contribute to the pension system, leaving the vast majority without coverage. Earnings for formal entrepreneurs are nearly three times higher than those for informal workers, and both groups are losing purchasing power due to inflation. The two reports together illustrate the broader challenge of informal employment in Brazil: persistent earnings gaps, inadequate social‑security coverage, and the need for policy measures to increase formalisation and protect vulnerable workers.