Marcelo Neri, Director of FGV Social, discusses the results of a research organized by him on the evolution of poverty and inequality in the country based on the fresh data from the Continuous National Survey by Household Sample (PNADC in Portuguese), which presents the numbers of the first year of the Bolsonaro’s administration and the last social picture of Brazil before the Covid-19 pandemic.
According to Neri, the research presents good and bad news. In addition to the rise in extreme poverty for the fifth year in a roll, the fragile national economic recovery has been lost given the reduction in the growth of the average per capita income in the country in real terms: 1.3% between 2018 and 2019 against a previous rate of 3.9% between 2017 and 2018. On the other hand, income inequality, which had been growing for almost 20 quarters in a roll, finally has started to decrease: evidence shows a 3-point fall in the Gini index. It is worth noting that while mean income has surpassed its pre-crisis level, by contrast, the population’s well-being (a variable that includes both the growth of mean income and its distribution) is still below the level registered in 2014.
The losses in real terms registered in the Bolsa Família (Brazilian main conditional cash transfer) in addition to the appearance of lines to receive this program represent important factors to understand the booming misery in Brazil, claims Neri. The purchasing power of the average benefit offered by the program has decreased by 18.8% since 2014, mainly because the benefit level was not corrected according to the inflation in 2015 (a year in which inflation reached 10%) and somewhat in 2017 (when inflation was already under control). Moreover, there was a cutback in the number of beneficiaries in a moment that more people should have been covered by the program. The outcome was the appearance of a line of 1.5 million people waiting for a chance of receiving the benefit. The Bolsa Família only costs 0.4% of the GDP and its impacts on the economy are impressive: in addition to being the best-targeted cash transfer offered by the government, presenting the lion’s share of its beneficiaries among the poorest in the income distribution, the program makes the wheels of the economy to rotate: for each R$1 spent on the program, R$1.78 is generated in the Brazilian economy.
Lastly, Marcelo Neri asserts that Brazil has forgotten on how to take care of its poorest citizens in the last five years since extreme poverty has been growing and the traditionally excluded groups have been more negatively affected by the crisis, such as the blacks and rural workers, than the average Brazilian. The exception is the women, who are better educated than men, thus were able to grasp more opportunities during a crisis that favoured the well-educated and richest Brazilians. Neri shows that in the last five years the income of the illiterate has fallen whilst the income of those with a university diploma has increased.
Watch a video of the Director of FGV Social analysing PNADC data at https://youtu.be/3WOifDyEDUM (In Portuguese)
See the research developed by FGV Social “2019 Social Assessment: Has Brazilian inequality peaked?” at https://cps.fgv.br/en/featured/2019-social-assessment-has-brazilian-inequality-peaked
Also see “Cuts in the Bolsa Família Program and the Escalation of Extreme Poverty in Brazil” at https://cps.fgv.br/en/featured/cuts-bolsa-familia-program-and-escalation-extreme-poverty-brazil
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