Brazilians’ income drops 9.4% during the pandemic, says FGV

Even with the Gross Domestic Product (GDP) returning to pre-pandemic levels, despite still showing a retraction in the last release, the country’s labor market remains at alarming levels, worse than those reached before the start of the new coronavirus pandemic .

This is because, according to economist Marcelo Neri, from the Getúlio Vargas Foundation (FGV) Social, the average income of Brazilians, including informal and unemployed people, is currently 9.4% below the level at the end of 2019.

The number is even more felt among the poorest half of the population, whose income loss is 21.5%.

Also according to Marcelo Neri, the cause of the fall in income of the poorest half of the population was due to the increase in unemployment, whose effect resulted in a drop in income of 11.5%.

In addition, many people at the bottom of the income distribution withdrew from the market with no prospect of finding work in the pandemic, which economists call the despondency effect – and which had a drop in income by 8.2 percentage points.

“The reduction in the income of the employed as a result of the acceleration of inflation and unemployment itself and the reduction in working hours complete the fall in the income of the poor between the last quarter of 2019 and the second quarter of 2021 as an approximation of the full effects of the pandemic” , explains the economist.

who lost the most

In addition to the poorest half of the population, the elderly were the ones who felt the greatest impact on the budget, with a 14.2% decline in average income. According to FGV, this is explained by the fact that the elderly lost space because they had to withdraw from the labor market due to the greater weakness in relation to Covid-19.

Then come the Northeast, who had an 11.4% loss of income compared to the end of 2019. As an example, this loss in the South region was 8.4%.

Then come the women who needed to stay with their children at home, who had a reduction in income of 10.35%, against 8.4% among men. All these groups mentioned had falls above the average (-9.4%).