From slavery to modern struggles: a short journey through income inequality in Brazil

Brazil is one of the most unequal countries in the world. According to the Oxfam report, 63% of Brazil's wealth is in the hands of 1% of the population. The same survey shows that the poorest 50% own only 2% of the country's assets. In 2022, the average income of the 1% who earn the best in Brazil was 32.5 times greater than the average income of the 50% who earn the least, according to Piauí magazine.

To make matters worse, the COVID-19 pandemic has intensified inequality in the country. According to sociologist Marcelo Medeiros, the concentration of income in Brazil "is so great that a hypothetical distribution of half the income of the richest 1% would be enough to almost double the income of the poorest half of adults".

Read below a short summary of the history of inequality in Brazilian society:

Colonial Period (1500s-1800s): Brazil's colonial era was characterized by a highly unequal social structure based on slavery and genocide of the traditional population and land ownership. The Portuguese colonial rulers established large plantations worked by enslaved Africans, leading to extreme wealth concentration among landowners and elites while the majority of the population lived in poverty.

Abolition of Slavery and Industrialization (late 1800s-early 1900s): The abolition of slavery in 1888 marked a significant shift in Brazil's social dynamics. However, income inequality persisted as former slaves and their descendants faced economic marginalization. Industrialization during this period led to the emergence of urban centers and the growth of industrial sectors, but wealth remained concentrated among a small elite class.

Economic Growth and Urbanization (mid-20th century): The mid-20th century saw periods of economic growth and urbanization in Brazil, driven by industrialization and infrastructure development. However, income inequality remained high, with disparities between rural and urban areas and among different social groups.

Military Dictatorship (1964-1985): The military dictatorship era in Brazil, which lasted from 1964 to 1985, saw economic policies that favored wealthy elites and multinational corporations. This period contributed to widening income gaps and social unrest, particularly among marginalized communities and workers.

Democratic Transition and Economic Reforms (1980s-1990s): Brazil's transition to democracy in the 1980s and subsequent economic reforms in the 1990s aimed to address economic challenges, including inflation and debt. However, these reforms also led to increased income inequality as austerity measures and neoliberal policies disproportionately affected lower-income groups.

Social Programs and Poverty Reduction (2000s-present): In the early 2000s, Brazil implemented social programs such as Bolsa Família, which targeted poverty reduction and income redistribution. These programs, along with economic growth and rising education levels, contributed to reduced extreme poverty and improved income inequality indicators. However, income inequality remains a significant issue in Brazil. Factors contributing to ongoing income disparities include unequal access to education, healthcare, employment opportunities, land ownership patterns, racial and gender inequalities, and economic policies that may favor certain groups over others. Addressing income inequality continues to be a complex challenge requiring comprehensive social, economic, and political reforms.

Brazil: poverty grows and inequality increases

According to the IBGE (Brazilian Institute of Geography and Statistics), Brazil's GDP grew by 1.3% in 2018. The latest Focus Bulletin, published last Monday by the Brazilian Central Bank, pointed out that Brazil's GDP growth in 2019 should be around 1.1%. Therefore, if all goes as expected by the experts from the top 100 financial institutions in the Brazilian market, which make up the Focus Bulletin, 2019 will have a lower GDP growth than 2018.

This scenario allows us to say that the Brazilian economy continues at a very slow recovery pace. As the Brazilian GDP advances with very little vigor, it seems that the country's economy should recover pre-crisis level only in 2022.

According to the technical director of Dieese (Inter-Union Department of Statistics and Socioeconomic Studies), Clemente Ganz Lúcio, if the Brazilian economy continues at this pace, it will take a decade for the country to recover the level of employment that existed before the crisis that began in 2013.

Currently, Brazil has 12.4 million jobless people, a rate of 11.6%.

According to Rafael Guerreiro Osório, a researcher at the Institute for Applied Economic Research (Ipea), the country's performance in the areas of income distribution and education pushed performance down. For Osorio, "we are not doing well in education. And this year, we have not seen a proposition of educational policy that promises extraordinary results, if any. In life expectancy, there is no way to change much from one year to another. So the hope would be for income, but our situation today will keep us close to the middle of the ranking." Brazil occupies the 79th position among 189 evaluated nations.

To make matters worse, Brazil has won the terrible title of runner-up in the world this year, second only to Qatar.

According to the newspaper O Estado de Minas, "Brazil is the second most unequal country in the world among those who provide estimates based on tax data, second only to Qatar"

In Brazil, 1% of the richest population (about 1.5 million people) concentrates 23.2% of the share of total income declared by individuals to income tax (in Qatar the richest 1% concentrates about 27% of total declared income).

According to The State of Minas, "the income concentration of this small group of rich people in Brazil is 164% higher than in Sweden, where the one hundredth richest share accounts for 8.8% of the total income. Sweden, from the 1930s until recently, saw the income share of the richest hundredth shrink from 12.3% to 8.8%, in Brazil, over the last nine decades, the distribution pattern has shown a steady and persistent concentration: 1% richer answered between 20% and 25% of the total income".

However, part of the Brazilian financial market, media, and government analysts insist that the Brazilian economy is growing again. For the thousands of Brazilian unemployed and underemployed, this kind of analysis is a kind of derision. For the thousands of Brazilian unemployed and underemployed, this kind of analysis is a kind of derision. While most face a day-to-day world record in homicide, hate crime, incarceration, state violence, unemployment and lack of prospects, part of the country's richest 1% insists that everything is getting better.

Inequality does not stop growing in Brazil and already reached 23.3 million people; unemployment reaches 12 million people

According to a study by FGV Social economist Marcelo Neri, Brazil faces the longest period of increasing inequality in its history. There are already 17 consecutive quarters of the increase in income concentration in the country. The survey also notes that the number of poor grew in the country and reached 23.3 million in 2017, the most recent data. These are people who live on less than 233 reais per month.

To make matters worse, more than 13 million Brazilians live in poverty or extreme poverty, according to data released this week by the Unified Registry of the Ministry of Citizenship.

Unemployment continues to erode Brazilian society. According to IBGE, 3.3 million unemployed people have been looking for work for at least 2 years in the country. This number corresponds to 26.2% of the 12.8 million Brazilians who were unemployed in the second quarter of 2019.

Meanwhile, the latest Focus Report, released by the Brazilian Central Bank, predicts that the economy will grow a meager 0.81% in 2019. A very small number in the face of rising inequality and unemployment affecting Brazilian society.

Income inequality in Brazil is the highest in seven years

According to a survey by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre/FGV) released today, income inequality reached the highest level in seven years. The Gini index, which stood at 0.627 in the first quarter of 2019, is the highest since the first quarter of 2012, the beginning of the historical series when the number was 0.608. According to the Gini index, when the closest to 1 more unequal is the country.

The main reasons are the upward unemployment rate, hitting 12.7% in the first quarter of 2019, and the prolonged effects of the recession that began in 2014.

The projected GDP growth in 2019, which is around 1% according to several analysts, will not change this picture. Therefore, the picture of inequality must remain in Brazil at least until 2020.

Income inequality rises in Brazil

Brazilian racial democracy is a myth when the issue is the economic development of its citizens. A study by the Institute for Applied Economic Research (Ipea) indicated that gains in skin color have grown over the past five years. In 2012, whites received an average of  R$ 726.93 more than blacks. In 2017, the difference increased to R$ 767.84.

In 2017, whites had an average income of R $ 1,780.60, while blacks had an average monthly income of R $ 1,012.76. So much lower than the white population.

Another very serious problem pointed out by the research are the wage differences between men and women. Although this disparity has reduced in recent years, Brazilian women, despite being more educated than men, have lower income. Brazilian women’s average income in 2012 was USD $250/month while Brazilian men’s was USD $461/month (Ipea, 2017).

Brazil increasingly needs entrepreneurial policies focused on diversity, since public policies have been derisory near the social problem that exists. However, the current government was elected with a platform aimed at ending what President Jair Bolsonaro calls "gender ideology" in Brazilian schools.

However, educational scholars argue that the educational approach to gender identity in schools can contribute to combating problems such as teenage pregnancy, violence against women, homophobia and gender inequalities.

The minimum wage in Brazil will not increase above inflation in 2020, which has not happened for 15 years

According to the draft budget presented by the government of Jair Bolsonaro for the year 2020, the minimum wage should be R$ 1,040, only with the replacement of inflation. The project also does not predict real increase for servers, only the military will have increased above inflation.

If approved, the adjustment begins in January 2020, with payment starting in February 2020.

Thus, Bolsonaro interrupts a public policy of real increase of the minimum wage that it has begun 15 years ago, and that aimed at reducing the social inequalities of the country.

Brazil is one of the most unequal countries on the planet. Almost 30% of Brazil's income is in the hands of only 1% of the country's inhabitants.

According to Oxfam, 86% of Brazilians believe that the country's backwardness is related to the gigantic economic inequality between rich and poor.