Income inequality in Brazilian cities reaches lowest level in history
The Gini Index, created to measure the degree of income concentration, fell to its lowest level ever in Brazilian cities, reaching 0.534 in 2024. The indicator, based on per capita household income, measures how income is distributed among individuals in a population, on a scale from zero to one. The closer the index is to 0, the lower the inequality.
The data are part of the Inequality in Metropolises Bulletin, produced by the National Institute of Science and Technology Observatory of Metropolises; the Laboratory of Inequalities, Poverty, and the Labor Market at the Pontifical Catholic University of Rio Grande do Sul (PUCRS); and the Network of Social Debt Observatories in Latin America.
According to one of the study’s coordinators, PUCRS professor André Salata, two factors contributed most to the result: rising labor income and the appreciation of the minimum wage.
He explains that in recent years, Brazil has had a stronger labor market, driven mainly by the post-pandemic recovery and low unemployment. Salata noted that there has also been a return to the policy of real appreciation of the minimum wage, which makes a difference, specially among the lower segments of the population.
“The country is managing to combine these two factors with inflation control. Things are improving for everyone, but proportionally more for those at the bottom of the pyramid,” Salata added.
As a result, income growth was greatest among the poorest 40 percent, rising from BRL 474 per person in 2021 to BRL 670 in 2024 - also a record in the historical series. This helped reduce the poverty rate in these regions from 31.1 percent in 2021 to 23.4 percent in 2023, and further to 19.4 percent last year, meaning that 9.5 million people moved above the poverty line between 2021 and 2024.
On the other hand, although it has also declined, the gap between the two extremes of the pyramid remains substantial. Last year, the richest 10 percent had incomes 15.5 times higher than those of the poorest 40 percent.
Reasons to rejoice
The professor explains that a Gini coefficient above 0.5 already indicates a very high level of inequality and points out that the poverty rate in large cities stands at nearly 20 percent.
“All of this points to a social situation that is far from desirable. So, if we look only at the snapshot, there is nothing to celebrate. However, when we consider the trends of recent years - the overall trajectory - we have reasons to be somewhat happier and more optimistic, because it shows improvement: poverty reduction and rising average income,” he stated.
The bulletin compiles data from the country’s 20 metropolitan regions, as well as from Brasília and the Integrated Administrative Region of Greater Teresina, the capital of Piauí.
“More than 40 percent of the Brazilian population lives in metropolitan areas, which means over 80 million people. Within our metropolitan regions, we face some of the greatest challenges to consolidating citizenship in Brazil, especially for the poorest segments of the population. When we analyze inequality within these regions, we are talking about the inequality that residents experience on a daily basis,” emphasizes Salata.
