Average income of richest Brazilians up 8.4% in 2018

The richest one percent of Brazilians saw an actual increase of 8.4 percent in their monthly income in 2018. In the same period, the poorest five percent of the population saw a 3.2 percent shrinkage in revenues. Whereas the monthly average for the richest stood at $6.5 thousand, the poorest made $37 percent. The figures are part of an  assessment across all types of employment and sources of income of people living in Brazil, found in the Continuous PNAD (National Household Sample Survey), conducted by the country’s statistics agency IBGE.

Losses are also reported if the group is made to cover the 30 percent poorest. In addition to the 3.2 percent drop for the five percent poorest, the 5 to 10 percent group went down 1.4 percent. The losses for the 10–20 percent poorest were reported at 1.5 percent. For 20–30 percent, the reduction was 0.8 percent.

 “Of the 30 percent with the lowest revenues, all saw a reduction compared to 2017 in the average income; everyone lost a little,” said Maria Lúcia Vieira, research manager.

She pointed out that some of these results come as a result of lowered employment in industry and construction. IBGE Analyst Adriana Beringuy mentioned that an impact was felt by workers in information, telecom, and financial and administrative services. “This activity lost a large number of employed people, and, when it hired, work was usually informal and workers autonomous. Even the most formalized sectors started to absorb workers with lower revenues.”

Informality

Adriana Beringuy mentioned the growth in transport, storage, and mail—which includes smartphone application drivers as well as food, with a stronger focus on informality. “There’s a recovery in employment, with more people working. Indeed, the employed population has risen, but it’s been taking place in activities with lower income,” she added.

“Those making more money continued in the market. Those in the middle were fired and rehired with no registration, having to do informal work and accept lower income,” Maria Lúcia stated.

The Gini index

Inequality in Brazil is also made evident by the Gini index—which gauges income concentration and monthly revenues in all jobs, varying from zero (perfect equality) to one (maximum inequality). In 2018, the indicator was 0.509, compared to 0.501 the year before. From 2012 to 2015, the survey found a downward trend in the rate, which sank from 0.508 to 0.494. In 2016, the index rose back to 0.501—a threshold that held steady in 2017. In this case, inequality can be aggravated because those gaining less started being paid even less.

Between 2012 and 2015, Beringuy went on to say, Brazil registered higher income and a low unemployment rate. “It was when people said hiring maids was no longer viable, because pay was high. Basic services and trade were also having high salaries. There was a boom in registered employment, so income de-concentrated, due to the labor market. In 2016, a new landscape appeared.”

Welfare

To the judgment of Research Manager Maria Lúcia Vieira, faced with the situation in the labor market, people unable to find formal employment with benefits end up working informally or attempting to start their own business. “There’s no increased search for informal work. Informal work is what’s available,” she argued.

Over the course of this period, Vieira added, among other activities in informal employment, an increase was observed in food and app drivers.

She talked about people with informal jobs who do not declare their revenues and may fit the criteria for welfare programs, like the Bolsa Família. “If you have a registered job, your revenues are declared; if your employment is informal, you don’t necessarily declare your income, so you can join [welfare] programs more easily.”

She also drew attention to the fact that families in such welfare initiatives have considerably lower revenues than those out of welfare programs. “It’s about a fifth of the income. It’s a huge difference, and we see this gap even in the structure of households, in the access to services, and the assets they own,” she stated.