Instability in income hinders recovery of the poorest – 12/09/2021 – Market

First, Kelcilene de Souza, 44, took meat off the menu; then cut the fruit. Without a job and even more dependent on emergency aid to help feed her family, she is now grateful that she is still able to buy rice and beans.

“Since I am a domestic worker and I have health problems, it became even more difficult to get a job during the pandemic. Nobody wanted to give a job and was afraid of getting sick. I even received R$ 120 a month, but the joy of the poor is short-lived and cut it in half,” he says.

With the reduction of the benefit in the second quarter of this year, the family, who are living in favor, can no longer pay their water and electricity bills. “We reduce supermarket purchases to pay for the internet for children to study. It seemed that things were going to get better, but everything became very difficult.”

The finding of worsening living conditions is not exclusive to Kelcilene’s family.

The ups and downs faced by the poorest families during the pandemic seem to repeat the same script across the country: unemployment, payment of emergency aid, end of benefit in December and return from it in April (with half the amount).

With the inflow and outflow of resources in a short period of time, these Brazilians live in a kind of concertina effect of income — they already had little, lost almost everything and are now fighting to recover only part of it.

In an interval of just over a year, the number of people living in poverty in the country, which was over 23 million (11%) at the end of 2019, even dropped to around 9.8 million (4, 3%) in the middle of last year, when emergency aid reached more families.

With the abrupt end of the benefit, the number of poorest people exploded in the first quarter of 2021, going to an additional 34.3 million (16.1%), only to fall back later, to the current 27.7 million (12, 98%), with the return of the benefit in April.

Data from FGV Social consider families earning up to R$261 per person.

“The country has grown little and inequality has increased in recent years. Surviving without many resources is already complicated, but income instability poses an extra problem in this equation”, says Marcelo Neri, coordinator of FGV Social.

Neri also remembers that the drop in income in the poorest half of the population reached 21.5% since the last quarter of 2019, before the pandemic. Among the 10% of the population with the best living conditions, this loss was 7.16% in the same period.

“Practically all families have had some fluctuation in income in recent years, but for the poorest, this inconstancy could mean the lack of even the most basic conditions at home.”

Before the pandemic, these families had already struggled with the 2015 and 2016 recession, which pushed more than 4 million into poverty. With the timid recovery of the economy between 2017 and 2019, and the queues of people waiting to join Bolsa Família, the improvement in the daily lives of these families was also slow.

“An important difference from the current crisis to the previous one is that the poorest families have now suffered almost uniformly, as they are unable to work,” says Neri. In economic crises, he remembers that families and friends end up supporting each other.

Another survey conducted by him points this out: 61% of the poorest Brazilians rely on the solidarity of family or friends when they go through a financial crisis.

“The poorest Brazilians are more subject to these ups and downs and depend on their acquaintances to be in a better situation to get some help. The pandemic has taken jobs away from many more people and has increased their dependence on social programs.”

The professor points out that the effort for the poorest to have an income increase also fluctuates in election years, such as 2022. “In election years, transfer programs tend to receive more resources, which last until the following year.”

“The life of the poorest Brazilian is more than a roller coaster: it is a toy in which the cart breaks along the way”, says Ricardo Henriques, executive superintendent of Instituto Unibanco and one of the creators of Bolsa Família.

“It’s not just rises and falls in income, but the feeling that life is not moving forward. The pandemic has meant that, for the first time, informal work has not been able to cushion the rise in unemployment and there is no clear government strategy to combat the crisis now.”

Beauty salon assistant Marinalva Ferraz, 55, can barely finish a sentence without asking for a job opportunity. Since the beginning of the pandemic, she has not been able to find a permanent occupation and depends on emergency aid to survive.

“When the salons were able to reopen, the customer didn’t show up. The drop was about 70%, compared to what we used to attend before the quarantine. They ended up firing me and I found myself without a job. I think it was one of the saddest days I’ve ever seen. I lived.”

She now avoids making long-term plans. His goal became working odd jobs to be able to pay the rent. “Sometimes I don’t feel like getting up. The bill arrives and I can’t pay what’s already overdue, I don’t wish that for anyone.”

Another recent survey, by researcher Daniel Duque, from Ibre/FGV (Brazilian Institute of Economics, of the Getulio Vargas Foundation), points out that this worsening in the lives of Brazilians has spread throughout the country.

In relation to the total population, there was an increase in poverty in 23 states and the Federal District, says the researcher, between January 2019 and the first month of this year. In the DF, this increase was eight percentage points, followed by Rio de Janeiro (an increase of 6.9 points).

In this case, the World Bank poverty index (up to R$400 monthly per person) and extreme poverty (up to R$160) is considered.

With the worsening of Brazilian living conditions and in an attempt to create its own brand in the transfer of income, the Bolsonaro government proposed a reformulation of Bolsa Família, with the name of Auxílio Brasil. The program design, however, is still just a sketch.

“One of the government’s proposals was to delay payment of court orders [dívidas do governo reconhecidas pela Justiça] to make room for a program that pays more than Bolsa Família. But is this sustainable? This is my fear”, questions the researcher.

“If we move forward in the solution of precatório, you will see a Bolsa Família with an increase because the cost of living has increased a lot, the most vulnerable are left behind. It is natural for Brazil to restore the living conditions of this more fragile population”, said Minister Paulo Guedes (Economy) at the beginning of September.

President Bolsonaro’s threats to the STF (Supreme Federal Court), which intensified last week, on the September 7 holiday, also hamper the agreement that had been sewn with the Judiciary to stop paying all precatório in 2022.

At the end of August, the government presented a proposal for the 2022 Budget, without foreseeing the supercharged version of Bolsa Família.​

“If the sustainability of the new program is conditioned to this type of output, there will be money in 2022 and it is not known if there will be more in the future”, says Tereza Campello, former minister of Social Development and Fight against Hunger.

“The transfer of income cannot take place in an uncertain way, families need to know that they can count on that resource. Or they will end up living in more uncertainties”, completes the minister.