Are you prepared to face the challenges that demography It is technology bring to the INSS? With the fertility rate at a historic low and the increase in informal work without social security contributions, Brazil needs to innovate in labor and social security laws. Discover 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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- The low fertility rate reduces the labor force.
- The increase in 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: Demography and Technology
The Current Scenario
Have you ever wondered how demography and the technology Are they shaping the future of the INSS (National Social Security Institute) 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 just 1.6, an insufficient value to keep the population stable. 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 and over increased by 57%. This results in a greater number of retirement and pension beneficiaries, putting pressure on the INSS finances.
The Impact of Technology
While demography already represents 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, the skills required by new technologies do not match the skills of existing workers.
Furthermore, many workers are choosing to work independently, without social security ties. 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 contribution to the INSS is 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 amount.
Innovative solutions
To face these challenges, it is necessary to innovate. Germany, for example, has implemented a pension protection system for freelancers in around 300 professions. The employment contract can only be signed if there is a link with a social security system. During the contract, a tax rate of 20% is shared between the worker, 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 service providers and borrowers, and even with the government and consumers.
The Role of Society
You, as a consumer, also have an important role. When ordering a meal at home, for example, have you ever thought that you could contribute to the social security protection of those who deliver it? This is an important reflection for a more sustainable future.
Common questions
What are the main demographic challenges faced by the INSS?
The INSS deals with a low fertility rate. This means fewer people being born to contribute to the system in the future. Furthermore, the number of elderly people is growing rapidly, increasing the demand for social security benefits.
How is technology impacting the INSS?
Technologies create more opportunities for freelancers and self-employed people. 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 income needed to pay retirement and pension benefits.
What are individual microentrepreneurs (MEIs) and how do they affect the INSS?
MEIs are small entrepreneurs who pay lower social security contributions. This group, today numbering more than 10 million people, contributes insufficiently to sustain 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 worker. This model could inspire changes in the Brazilian system.
