Causes of unemployment in the footwear sector in Brazil
According to ABICALÇADOS -Brazilian Footwear Industries Association- from January to November 2023, factories lost 7.6 thousand jobs. Thus, the sector closed the last period until November with a total workforce of 288.6 thousand employees, representing a 6.9% decrease compared to the same period the previous year.
Among the various causes, Haroldo Ferreira, executive president of the entity, pointed out that the national industry is going through a challenging moment, both in the domestic and international markets. "Throughout the year, until November, we saw that the domestic market contracted by 6%, and the international market by 14% in volume."
He emphasized that the local industry is affected by unfair competition from imported footwear entering without paying taxes via international e-commerce platforms. "Since August, foreign footwear sold on these major platforms does not pay taxes, while the domestic industry must pay them," he added.
Another factor that influenced the footwear industry's activity was the presidential veto on the law approved by the national congress regarding the elimination of taxes on factory payroll. The resolution was again rejected by the legislative branch, which issued a Provisional Measure that annulled the approved project. Therefore, the sector is awaiting the final decisions that may be taken in this regard. Industrial leaders stated that if the project to not accept the elimination of taxes on footwear proceeds, it could lead to the loss of more than 20 thousand jobs and a decrease in annual production by 150 million pairs.
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