Sao Paulo, Brazil — Income concentration in Brazil deepened significantly from 2017 to 2022. While ordinary Brazilians' salaries were unable to keep up with inflation, the country's richest 0.01% saw their incomes increase by 96% during that period.
The data comes from a new study conducted by economist Sergio Wolff Gobbetti from the Institute of Applied Economics (Ipea). The study was published by the Fiscal Policy Observatory of the Brazilian Economic Institute of the Getulio Vargas Foundation (Ibre/FGV).
The findings interrupt an important and growing debate about inequality in a country where 30% of the population lives in poverty.
This study analyzed income trends by cross-referencing data from income taxes and the Brazilian Institute of Geography and Statistics (IBGE). His four strata of the Brazilian adult population were investigated. The group consists of the richest 0.1%, the richest 1%, the richest 5%, and the remaining 95%.
Gobbetti discovered that the closer you are to the top of the wealth pyramid, the more income you accumulate. For example, from 2017 to 2022, the income of 95% of Brazil's adult population increased by an average of 33%. In the top 5%, the increase rate was 51%. Among the richest 1%, it was 67%. and an 87% increase among the richest 0.1%.
Most impressively, the focus was narrowed to millionaires and billionaires, the richest 0.01% in Brazil, whose income growth from 2017 to 2022 reached an astonishing 96%.
Through years of research, Brazil's wealthiest citizens have accumulated more of the country's total income. In 2017, Brazil's richest 1% (a group made up of 1,536,670 people) accounted for 20.4% of the country's income. By 2022, they increased their share of the income pie to 23.7%.
Inequality persists even within this elite social class, with more than four-fifths of the income earned by the top 1% of Brazilians, compared to the top 0.1% whose average monthly income exceeds 441,000 reais ($88,000). (153,666 adults).
Income is highly concentrated at the top
Mr. Gobbetti holds a Ph.D. He holds a PhD in Economics from the University of Brasilia, brazil report Learn more about the concentration of income at the top of Brazil's social pyramid.
“This phenomenon of large increases in income is limited to a very small group,” he says. “Even when we go to the richest 1%, we find that 80% of the increase in their share of the cake is accounted for by 0.1%, the 1000th richest person in that group. Ta.”
“It's like a group of 10 people are increasing the state's income, but only one of those 10 receives 80% of the increase, and the remaining nine receive 20% of the increase,” Gobbetti said. He said he had only received %. “The concentration at the top is at a very high level,” Gobbetti said.
If we focus on the richest 5%, we conclude that this group concentrates almost 40% of the country’s total income.
According to Gobbetti, a number of factors explain the increasing concentration of income among the wealthiest segments of Brazil's population.
“Most obviously, there is a wide disconnect between earnings and wage performance over this period,” Gobbetti said. “Salaries in Brazil have been virtually stagnant, increasing by around 30% in nominal terms but almost zero in real terms.”
The researchers explained that this average income growth rate of 33% was effectively eaten up by inflation, which consumed 31% of the purchasing power of the Brazilian currency between 2017 and 2022.
“This represents an increase of just 2%, or 0.4%, over five years. Never in the past 30 years has this median income growth been this low,” Gobbetti said.
“On the other hand, what happened to the profits and dividends distributed by companies? Jumped from 370 billion reais [USD %75 billion] 830 billion reais in 2017 [USD %168.5 billion] It is expected to grow by more than 120% in 2022. ”
