By Astrid Verdugo
Brazil has one of the largest gaps between the rich and the poor in the world, not just in Latin America.
“The reason is you have immense wealth in places like Rio de Janeiro and São Paulo,” John Lyons, staff writer for the Wall Street Journal in Brazil, said. “And then you go to the rural areas. You can find places where people have one set of clothes.”
However, Brazil is a country that is doing a number of things to narrow the gap between the rich and the poor.
According to the Brazilian Institute for Geography and Statistics, over the past eight years, the income of Brazil’s domestic workers has risen by an estimated 56 percent.
“The poverty here used to be the defining characteristic of Brazil- and there’s still an awful lot of poor folks here but not as many as there used to be,” said Brian Winter, Reuters chief correspondent in Brazil.
“And even in some of the favelas in Rio and elsewhere, a lot of those folks now have televisions, refrigerators – things that they didn’t as recently as 10 years ago,” he said.
Hence, Brazil is making progress in its efforts to lift the consumption power of the poor.
Winter said since the government came under Luiz Inácio Lula da Silva’s presidency in 2002, Brazilians see themselves as stakeholders of the economy, where the biggest improvement is evident in the working poor.
“You know, nannies, drivers, construction workers – these people have made some pretty
significant jumps in terms of their real wages,” Lyons said.
Regardless, Brazil remains an incredibly unequal country.
“If Brazil wants to be the country that it aspires to be, Brazil needs to educate its population better,” Lyons said.
Brazil is also a country that is finally seeing a surging middle class, especially in urban areas like São Paulo.
Brazil divided its rich, middle and poor classes into five levels from A to E where “C” is the middle class.
“The “C” class is about 90 million people, about half the country, and those are the folks who a lot of them have credit for the first time,” Winter said. “Which has allowed them to go buy televisions or microwaves or refrigerators and so their lives have improved a lot.”
It’s not uncommon for people who grew up poor to have kids who have far more opportunities and education than they did.
“Brazil’s definition of a middle class is quite large and it encompasses people with an income level that we would in the United States consider poor,” Winter said. “But if you take middle classes and if you take the definition of that as someone who is able to pay for their basic necessities and have something left over, that’s basically where that group is now.”
Urbanized cities such as São Paulo are more positioned for the growth of the middle class where the working poor have more opportunities to excel than ever before.