Brazil record-low unemployment creating scarcity of maids

David Biller, Raymond Colitt – Bloomberg Businessweek, 11/20/2012

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.

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Brazil risks tumbling from boom to bust

Paul Marshall and Amit Rajpal – Financial Times, 07/04/2011

Back in February, in an earlier Insight column, we highlighted the major build up of consumer debt at extremely high rates of interest, putting a significant cash flow burden on the repayment capacity of borrowers.

Since then, the situation has deteriorated further. Pressures are building in the Brazilian credit cycle.

The average rate of interest on consumer lending has jumped from 41 per cent in 2010 to 47 per cent most recently in May 2011. This rise from an already elevated level reflects the cumulative effect of tightening by the Brazilian central bank in order to contain inflation.

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