American Business Strategies in Brazil

Using the U.S. as an example, we can look at the growth of the economy and the improvement of the job market in Brazil from 1981 to 2009. During the 2000s, Brazil's economy grew faster than EAP's. This led to big rises in average wages and drops in jobless rates. The significant increase in the minimum wage also had an effect on the distribution of income, raising average pay and lowering inequality (Barros et al., 2011; Nery, 2010). But Brazil's worker productivity grew slowly, which is what caused wages to change over time. People have said that labor productivity is closely linked to Brazil's early stages of socioeconomic growth and that it has a big impact on how the economy and job market work. Overall, the results are not good enough for this country. In the last 30 years, labor productivity has only slightly increased, and the big gaps between it and the U.S. have grown. In the U.S., where productivity gains led to higher average wage increases throughout the time, the link between productivity gains and average wages is stronger. In the 1980s and 1990s, Brazil's economy was unstable, and there were times when wages and output went in different directions.

The most uncertain time was in the early 1990s, when Brazil's economy went through a lot of changes (see Netto & Curado, 2005)

During this time, productivity went up while the average wage went down. In the 2000s, on the other hand, output grew faster than average wages. This was partly because the minimum wage went up and the job market became more formalized (Saboia, 2010). The fact that worker productivity varies so much helps to explain why average wages in Brazil are so much lower than those in the U.S. Even more evidence of these contrasts can be found in the ways that similar economic tasks are different. It's important to talk about some of the things that cause these kinds of differences. As a result of the rise of the New Economy (Salvatore, 2008), innovations and better use of information and communication technologies have led to progress in American technology. This has helped the export-services industry. Yotopoulos and Sawada (1999) say that comparative advantage in the production of goods still plays a big role in world trade. However, trade in services grew a lot and now makes up more than 20% of all international trade. Developed countries have a big edge in this trade race because they have better reputations, can customize goods better, build trust, and have better infrastructure. Developing countries have a hard time getting to the services that the United States exports. It usually costs a lot to build a lot of different kinds of public infrastructure that lets people specialize. This includes: technical education infrastructure in the form of biotechnology and technology parks; high-speed fiber optics communication; networks that let data be sent instantly; and most importantly, an army of well-trained workers. On the other hand, Brazil seemed to stay good at tasks that required a lot of labor. In fact, the difference in labor productivity between the US and Brazil went from 4 in 1981 to 5 in 2009.

The U.S. productivity has grown mostly in high-productivity service industries

In comparison, Brazil's labor productivity grew faster in sectors that need a lot of workers, like transport and agriculture. Similar results were found by Ferreira et al. (2011), who also found that the total factor output of the United States and Brazil has been changing in different ways since the early 1980s. Other writers (Cruz et al., 2007; Rocha, 2007) also talk about the trend of jobs moving to low-tech and low-productivity parts of the industry in the 1980s and 1990s. This may have continued in the industry and service activities in the 2000s. Based on the sharp drop in manufacturing activities in developing countries, these results may also support Ocampo's (2003) assessment. He says that these countries have not reached the same level of development and competitiveness as the richest nations and have stopped the same path of development that all industrialized countries had been on until then. As Reinert (2003) said, these results suggest that the U.S. is focused on making a steady flow of innovations that give workers the chance to make more money. Furthermore, Brazil would focus on either economic activities with little to no technological change or those that have small-scale and process innovations. In these cases, technological change results in lower prices for consumers instead of higher wages for workers who are usually not skilled. Labor efficiency isn't the only thing that affects or is affected by how the job market and economic growth work together. It does, however, play a big part in these kinds of changes and is very useful for explaining or summarizing the structural differences in how different countries have grown. It is especially important to compare countries as different as the U.S. and Brazil, whose growth paths might lead to broad conclusions if they are not carefully studied. The research in this paper suggests that Brazil's economic growth is still mainly due to a lot of people entering the job market, rather than big changes in the structure of the economy (in terms of both general and sectoral labor productivity trends). This is good in the short term, though. However, when comparing the Brazilian labor market to a frontier economy like the U.S., wages are not converging (towards factor-price equality); instead, there are a lot more differences between the two.

Brazil has been able to keep its economy growing in the 2000s, even after the global financial crisis of 2007

However, the country has not made any big changes to its productive sector, as shown by its low labor productivity rates and the way workers are allocated and participate in the sector. The low level of productivity in Brazil compared to the U.S. can be explained by a number of factors that affect labor output. For example, Restuccia (2009) talks about how institutions and policies in Latin American countries have caused problems. These include high costs to start a business, barriers to formal market entry, and different kinds of rules that often put plants in places where they are less productive and didn't get the resources they needed. A lack of investment in new ideas and technology is another issue that affects Brazil's productivity (ECLAC, 2010), along with the education level and standard of the work force (Ferreira et al., 2011). The ongoing differences between the American and Brazilian labor markets showed that the country needs more than just high economic growth to move out of its early stages of development and keep growing in the long term. This is one of the most important things that needs to happen in order to improve the structure of the labor market and raise real wages, which would lower inequality compared to developed countries. Also, the Brazilian EAP is falling very quickly, which could have big problems in the long run if the country's economic growth depends on more activities that require a lot of labor.