Brazil is one of the most unequal countries in the world. That is the conclusion of the report published by the Organization for Economic Co-operation and Development (OECD), headquartered in Paris, France. Among the findings, a family of the lowest income strata of the country needs, on average, nine generations to leave this range and reach the middle-income class of the Brazilian population.
Another report, entitled “The distance that brings us together – a picture of Brazilian inequalities”, developed by Oxfam International, based in London, UK, reports that the average per capita income of the vast majority of Brazilians is less than a minimum wage. Considering the values of 2015’s National Survey by Household Sample (Pesquisa Nacional por Amostra de Domicílios – Pnad), the document states that six out of ten people in Brazil have an average per capita household income of up to BRL 792.00 per month. Also: 80% of all Brazilian population lives with per capita income less than two monthly minimum wages.
Considering the rank of the most unequal countries in the world, drawn up by the OECD, Brazil is only behind Colombia (where it takes 11 generations for a family to reach the national average income) and ties with South Africa. Even developed countries such as Germany (six generations) and the United States (five generations) are below the global average of four generations.
The survey also reports that, among the 20% most impoverished families, 35% of their children are not able to climb socially – and only 7% will reach the wealthiest 20%. On the other side, the situation is different: only 7% of the children of the 20% richest families suffer from worsening living conditions.
Such index is similar to that published in the Oxfam document. According to the British organization, for every ten Brazilians born in the most miserable conditions, only one has a chance to reach the highest economic stratum. In Brazil, estimates says that over 16 million people live below the poverty line – the definition of “poverty line” for the federal government means monthly income lower than BRL 70 per person; for the World Bank, it means US$ 1.90 a day, or about US$ 215 a month.
Five billionaires as wealthy as the poorest half
The Oxfam report also points to an interesting fact: in Brazil, five billionaires have assets equivalent to the poorest half of the entire Brazilian population – about 103.5 million people. By 2017, the combined assets of these billionaires reached BRL 549 billion, a 13% increase compared to the previous year, while the poorest 50% reduced their share of total national income to 2%.
The same survey shows that between 2001 and 2015, the wealthiest 10% benefited from 61% of the country’s economic growth; while the poorest 50% benefited only 18%. Throughout the period, income concentration in the richest 1% remained stable between 22% and 25% of Brazilian wealth.
Concerning the monthly income, the richest 5% receive the equivalent of the sum of the poorest 95% together. According to the document, the wealthiest 10% have a monthly income per capita of BRL 4.5 thousand, and the richest 1%, more than BRL 40 thousand monthly. Those who live on the basis of a minimum wage must work 19 years to match what they earn, on average, to the wealthiest 0.1% of the Brazilian population.
Not a Brazilian exclusivity
A new millionaire emerged in the world every other day in 2017. By the end of the report, there were 2,043 billionaires in the world, and nine out of ten of them were men. The income of the poorest half of the world’s population ranges from $ 2 to $ 10 per day.
“We are seeing an absurd increase in the concentration of income and wealth in the world, and this brings more poverty and increasing inequalities. It shows that the economy continues to be very good for those who already have a lot and very bad for those who have little,” says Katia Maia, CEO of Oxfam Brazil. “The reduction of labor costs, such as wages and rights, is one of the factors contributing to this situation.”
Inequality is costly
The OECD warns about the social, economic and political costs of inequality. For the organization, in addition to compromising the quality of life of citizens, it influences economic productivity and affects political awareness. For the population, it also undermines social cohesion and the confidence of having an important voice, as well as reducing trust in the socio-political system, with potentially negative consequences for democratic participation, consequently reinforcing “political extremism or populism.”
According to the OECD, the solution for Brazil or other countries with a high level of inequality is to improve public spending on health (focusing on the most important treatments and those most in need) and education (with more investment concentrated in basic education).
Content published in August 15, 2018