Are you prepared to face the challenges that demography and technology bring to the INSS? With fertility rates at historic lows and the rise in informal work without social security contributions, Brazil needs to innovate its labor and social security laws. Find out how these changes impact us all and what can be done to ensure the sustainability of the system. Let's explore together!
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- Low fertility rates reduce the workforce.
- The increase in the number of elderly people puts pressure on INSS finances.
- Many informal workers do not contribute to Social Security.
- Technology creates new challenges and opportunities in the job market.
- Brazil needs to innovate in labor and social security laws.
INSS Challenges: Demographics and Technology
The Current Scenario
Have you ever wondered how the demography and the technology are shaping the future of INSS (National Institute of Social Security) in Brazil? The situation is more complex than it seems at first glance. Let's explore these challenges together and understand possible solutions.
The Demographic Crisis
First, it is essential to understand the impact of low fertility rate in Brazil. Currently, the number of children per woman is only 1.6, a figure that is insufficient to maintain a stable population. This means that, in the future, there will be fewer people of working age to support the economy and contribute to Social Security.
Furthermore, the elderly population is growing rapidly. In just 12 years, the proportion of people aged 65 or over has increased by 57%. This results in a greater number of pension and retirement beneficiaries, putting pressure on the INSS's finances.
The Impact of Technology
While demographics already represent a major challenge, technology adds another layer of complexity. Automation and artificial intelligence (AI) are replacing many traditional jobs, but there is not always a smooth transition for displaced workers. Often, skills required by new technologies do not match the skills of existing workers.
In addition, many workers are choosing to work independently, without social security contributions. This includes freelancers, individual microentrepreneurs (MEIs) and informal workers. Although technology has expanded job opportunities, it has also created gaps in the collection of social security contributions.
The Challenge of Contributions
Currently, of the 130 million Brazilians of working age, around 40 million are out of the workforce for various reasons, such as studies, retirement or illness. Another 40 million work informally, without contributing to Social Security. More than 10 million are MEIs, whose contributions to the INSS are very low, and around 8 million are unemployed.
If nothing is done, the INSS contribution rate, which is currently around 32% of salaries, may have to rise to 70%, an unsustainable value.
Innovative Solutions
To meet these challenges, innovation is needed. Germany, for example, has implemented a social security system for freelancers in around 300 professions. The employment contract can only be signed if there is a link to a social security system. During the contract, a 20% rate is shared between the employee, the employer and the government.
In Brazil, the capitalization system was rejected in the 2019 pension reform, but perhaps it is time to reconsider this option. Many activities could be protected with contributions shared between borrowers and service providers, and even with the government and consumers.
The Role of Society
As a consumer, you also have an important role to play. When you order a meal at home, for example, have you ever thought about how you could contribute to the social security protection of the person delivering it? This is an important consideration for a more sustainable future.
Frequently Asked Questions
What are the main demographic challenges faced by INSS?
The INSS is dealing with a low fertility rate. This means fewer people are being born to contribute to the system in the future. In addition, the number of elderly people is growing rapidly, increasing the demand for social security benefits.
How is technology impacting INSS?
Technologies create more opportunities for freelancers and self-employed workers. However, many of these activities do not generate contributions to the INSS, which harms Social Security finances.
What is the impact of informal work on INSS accounts?
Almost 40 million Brazilians work informally and do not contribute to the INSS. This reduces the revenue needed to pay retirement and pension benefits.
What are individual microentrepreneurs (MEIs) and how do they affect the INSS?
MEIs are small business owners who pay lower social security contributions. This group, currently numbering more than 10 million people, contributes insufficiently to support the social security system.
Are there international solutions that Brazil could adopt?
Germany has a model where freelancers have social security protection systems. Contributions are shared between employer, government and employee. This model could inspire changes in the Brazilian system.