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  • Paraisopolis, a favela in Sao Paulo, next to its wealthy neighbour Morumbi.

    Paraisopolis, a favela in Sao Paulo, next to its wealthy neighbour Morumbi. | Photo: Tuca Vieira

Published 19 August 2019

During Workers Party (PT) rule in Brazil, from 2001 to 2015 the rich and super-rich did see their income grow in Brazil. The only difference is that the 50 percent poorest also gained more income. 

Brazil is the world’s democratic country with the highest concentration of income in the top one percent, and since 2014’s recession while the country’s poorest sectors continue to be hit the worst the rich keep getting richer. 

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Brazil's Economy Continues Downward Spiral Towards Recession

According to the 2018 Global Inequality Report produced by a team of economist from the Paris School of Economics, Brazil comes narrowly second only to Qatar, an Arab emirate under a monarchical regime, in regards to income concentration at the top one percent. 

Based on data combining door-to-door research, national accounts and income tax returns, the report shows that the country’s super-rich - around 1.4 million adults- capture 28.3 percent of the country's total income and receive on average R$140,000 (US$34,355) monthly, all sources of income included.

By comparison, the poorest 50 percent - 71.2 million people with an average monthly income of R$ 1,200 (US$294) - got less than half of what the one percent did, meaning a mere 13.9 percent of national income.

 

As Folha de Sao Paulo reported, other data only corroborates the situation. Figures from the Brazilian Institute of Economics (FGV Social) show that post-recession (after 2014), the accumulated labor income of the wealthiest 10 percent in Brazil rose 2.5 percent above inflation and that of the super-rich about 10.1 percent. 

Meanwhile, the income of the poorest 50 percent took a 17.1 percent fall. This means that the poorest sectors of society had to bear the burden of economic recession and now neoliberal policies have accentuated the situation.

In June 2019,  the Gini index, which measures inequality, sits at 0.629 its highest level since 2012, the closer it gets to one the greater it is.

And the report shows, refuting the far-right and right-wing discourse, that during the left-wing Workers Party (PT) rule in Brazil, from 2001 to 2015 the rich and super-rich did see their income grow in Brazil. The only difference is that the 50 percent poorest also gained income. 

From 2001 to 2015, according to the report, while the poorest 50 percent of Brazilians saw a 71.5 percent rise in their income and the richest 10 percent have gained 60 percent, the middle class saw their income grow less, by 44 percent.

Yet things changed after 2015 until today, the super-rich in Brazil have continued accumulating income, especially capital income, according to economist Marc Morgan, who analyses data from Brazil for the Global Inequality Report. However, the poorest have lost the gains obtained during PT’s era.

From 2014 to 2019, the poorest have lost 17.1 percent of income, the middle class 4.2 percent while the rich and super-rich, despite de economic hardships the country faces, have reported an accumulated gain of income of 2.5 and 10.1 percent respectively. 

United Nations data showed that in 2017, 26.5 percent of Brazilians, over 54.8 million people and two million moreover the previous year, were living below the poverty line or living on US$5.50 per day. Poverty is concentrated in the country's northern and northeastern regions.

Brazilians living in extreme poverty, that is less than US$1.90 per day, increased from 13.5 million in 2016, the year Rousseff was overthrown by Michel Temer, to 15.2 million the following year.

And the future does not look promising for the lowest tiers of society as neoliberal policies implemented by far-right President Jair Bolsonaro, such as labor and pension reforms will intensify even more the level of precariousness in the South American nation. 

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