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Monday, July 28, 2014
- While no one disputes the progress made in reducing poverty in Brazil over the last decade, there is debate on how many people actually climbed into the middle class, with some analysts arguing that factors other than income must be taken into account.
The debate on what constitutes middle class, which turns “philosophical” at times, as economist Adhemar Mineiro told IPS, was sparked by a report by the president’s Secretariat of Strategic Affairs (SAE).
The study says 35 million people rose from the lower to the middle class in the last 10 years, and that the middle class grew from 38 percent of the population in 2002 to 53 percent this year, in this country of 192 million people.
If the pace at which poverty has been reduced under the governments of Luiz Inácio Lula da Silva (2003-2011) and his successor Dilma Rousseff – both of whom are from the left-wing Workers Party (PT) – remains steady, the middle class will represent 57 percent of the population by 2022, adds the SAE, which is in charge of planning the country’s long-term socioeconomic policies.
According to the World Bank, poverty in Brazil fell from 21 percent of the population in 2003 to 11 percent in 2009, while extreme poverty dropped from 10 percent in 2004 to 2.2 percent in 2009. And the U.N. Development Programme reported this year that poverty almost halved in the last two decades.
The problem, say analysts who question the statistics published by the SAE in late September, is the criteria used to classify who is middle class: a per capita income of between 145 and 510 dollars a month.
“The range of income used for the definition of the middle class in Brazil seems to be very broad,” Professor João Sabóia of the Institute of Economy at the Federal University of Rio de Janeiro told IPS.
According to the expert, the definition covers people with very different income levels, living conditions and consumption habits, which should also be taken into account.
He pointed out as well that the minimum monthly wage in Brazil is 311 dollars, higher than the threshold set by the government to classify people as middle class.
Every five to seven years, the Brazilian Institute of Geography and Statistics carries out a study on family budgets and consumption habits.
He said that “a more homogeneous middle class” would emerge based on a definition that took into account the consumption patterns reflected by that study.
But Sabóia does not question the magnitude of the economic and social changes that have taken place in Brazil over the last decade.
“There is no doubt that there has been significant social ascent in Brazil” over the last decade, as poverty has been slashed and the distribution of income has improved.
“That fact is, in and of itself, much more important than debating whether the middle class in Brazil represents 30 or 50 percent of the population,” he said.
Eduardo Fagnani of the Institute of Economy at the state University of Campinas (Unicamp) told IPS that several different currents of thought are involved in the debate on the middle class.
Marxism, for example, defines the middle class based on “who owns or does not own the means of production,” he said.
At the other extreme, there are definitions extracted from “the American dream” or the economy of post-war Europe, which include concepts such as professional insertion, the improvement of educational coverage, and the variety of cultural and consumption habits, he added.
Fagnani said the criteria used by the government are “arbitrary because they give the impression that the people who pulled out of poverty are now in the middle class.”
Although he clarified that “it cannot be denied that progress has been made in Brazil in the last few years,” the economist questioned whether leaving poverty behind necessarily meant that a decent standard of living had been attained.
“There is a certain triumphalism on the part of the government, when it says all these people pulled out of poverty and joined the middle class. But isn’t someone who earns the minimum salary poor? And is a person who lives in a neighbourhood without sanitation or who doesn’t use the public health network middle class?”
Fagnani said other criteria should be included. “The middle class can afford a comfortable house in good conditions, music and English classes, travel abroad, and private medical plans.”
But from the point of view of housing alone, Brazil “has an enormous deficit,” he noted. And around 80 percent of the housing shortage affects people who earn up to three minimum salaries, he said.
But Mineiro, an economist with the Inter-Union Department of Statistics and Socioeconomic Research (DIEESE), said the new-found social mobility has had a strong impact from the point of view of citizenship, independently of the criteria used, which he criticised and blamed on “neoliberalism”.
He said he prefers to talk about “the incorporation of the unemployed and new workers, but fundamentally about the formalisation of the economy.”
Mineiro said that those who moved out of poverty were largely workers who joined the formal market in sectors like construction, retail and domestic labour – that is, areas where wages and educational levels are low and there is little access to cultural resources.
He said this is “a mass of workers who are now demanding their rights and public services, and who are organising, making sure their children get an education, and becoming active politically,” Mineiro said.
At the same time, these new formal sector workers “are starting to drive economic growth through consumption and through demand for public services which, in the area of infrastructure, represents new investment in public works and thus more investment in general,” he added.
Mineiro also said that the fight against poverty has been a novel development in Brazil.
He defended the policies implemented towards that end, such as a series of hikes in the minimum wage, conditional cash transfer programmes such as the Bolsa Familia, and the growing formalisation of the economy, which has led to expanded access to credit.