Living on Nothing and Surviving in Brazil

Close to 27 million Brazilians belong to families who have to
get by on no income at all or monthly earnings that amount to
less than two minimum wages or 400 reais (US$ 130). A mere 5
percent of the overall Brazilian population are members of
families with monthly incomes exceeding 6000 reais (US$ 1933).

Artur Cavalcante

Eighty seven million Brazilians, of a total of 179 million, belong to families that survive on the monthly equivalent of no more than five minimum wages.

This is one of the findings contained in the Family Budget Survey (POF _ Pesquisa de Orçamentos Familiares 2002-2003), released May 19 by the Brazilian Institute of Geography and Statistics (IBGE) with reference to the period between July, 2002, and June, 2003, when the data were gathered. The minimum wage at the time was US$ 64.43 (R$ 200.00). This figure includes 26,502,399 Brazilians who get by on no income at all or monthly earnings that amount to less than two minimum wages.

The study also shows that 89 million Brazilians belong to families that have monthly incomes greater than the equivalent of five minimum wages. Of this group, 8,945,013 people, that is, approximately 5 percent of the overall Brazilian population, are members of families with monthly incomes exceeding 30 minimum wages.

Around 85 percent of the Brazilian population experiences some degree of difficulty making it to the end of the month with what they earn. 27.2 percent of them reported great difficulty. Families spend 93.26 percent of what they earn just to maintain themselves—13.4 percent more than in 1975, according to the IBGE.

Now and 1975

The economic situation of Brazilian families has gotten a lot worse since 1975. At that time, families spent 79.86 percent of their monthly income to maintain themselves; in 2003 this percentage was up to 93.26 percent.

As a result, very little of what they earn is left over for investments, for example, to buy a home. The tax burden on family budgets more than doubled, from 5.27 percent in 1975 to 10.85 percent in 2003.

Whereas back then families could apply 16.5 percent of their monthly income on investments, this percentage dropped to only 4.76 percent in 2003, according to data from the Family Budget Survey.

In Brasília, cattle rancher Leon Santos said he believes that there has been "an impoverishment of the middle and lower classes." In his opinion it has become more and more difficult and expensive to buy basic products. "One begins first by eliminating superfluous items, but now necessary items are being cut, too."

The IBGE study also shows that the structure of family expenses was drastically modified between 1975 and 2003. As a percentage of total expenses, current outlays rose 13.40 percent, from 79.86 percent in 1975 to 93.26 percent in 2003. Consumption, which accounted for 74.59 percent of total expenses in 1975, was up to 82.41 percent in 2003.

In the opinion of shopkeeper Karina Almeida, from Brasília, the increase in prices messes up people's personal budgets. "Electricity, telephone calls, the supermarket, etc., which are the basics, are increasing in price, and salaries, in general, are not keeping up."

Artur Cavalcante works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated from the Portuguese by David Silberstein.