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Unicamp Newspaper - May 2000

page 5

RESEARCH
Poor rich middle class
The intermediate mass contains almost half of the country's income, says study

PAULO C�SAR DO NASCIMENTO

ACan someone in Brazil who has a monthly income of at least R$2.000,00 be considered rich? The answer is yes, according to a study carried out by professor at the Unicamp Institute of Economics, Rodolfo Hoffmann. But the results of the survey "Income Distribution in Brazil: few with a lot and many with very little" reveal a greater surprise when demonstrating that people with that income are part of the privileged group of the richest 10% in the country, which It's not a small matter: there are more than six million Brazilians and - contrary to what one might imagine - a few dozen millionaires who are frequently exposed to the spotlight and the glamor of evil. day.

Although the subject may seem exhausted – after all, although it is not a problem exclusive to Brazil, the unfair distribution of income in the country is well known – Professor Hoffmann's analysis has no merit in addressing Do it in an innovative way. Based on recent and reliable statistics, it presents numbers that do not corroborate the great inequality in the distribution of national income, but, above all, emphasize in a clear and up-to-date way the different levels income of the economically active population.

To study the characteristics of income distribution in Brazil, Hoffmann used data from the National Household Sample Survey (PNAD) carried out by IBGE in 1998 and which he found in the country (except in rural areas of States of Rondônia, Acre, Amazonas, Roraima, Par� and Amap�, not covered by the survey) almost 77 million economically active people. In the analysis, however, it was restricted to the approximately 61,6 million economically active people with a positive income, since no less than 18,6% of the total covered by the PNAD had an income equal to zero , that is, it was made up of unpaid people, including in this category the unpaid members of the families of small farmers, where the result of family work is declared as the head's income. After making a correction to compensate for underdeclaration, the average income of those 61,6 million people is around R$950,00.

Middle class? – Even considering that the main limitation of the data is, certainly, the under-declaration of high incomes, Hoffmann arrived at figures that, at the very least, invite a reflection on errant criteria titles conventionally applied to define socio-economic categories in Brazil based on income – used more by force of habit than properly based on scientific data. The population group that in the country is conventionally called the middle class, for example, in light of the work of the Unicamp professor, is mistakenly positioned in the scenario of national income distribution.

"Analyzing the income of economically active people, it is clear that each of the people who are among the richest 10% earn at least R$2.000,00. They are, therefore, relatively rich people for the distribution income in Brazil, but they tend to consider themselves poor. At most the person admits to belonging to the middle class", observes Hoffmann. "The study reveals, however, that a contingent that appropriates almost half of the entire national income cannot be considered part of an intermediate mass of the population", he ponders.

Ignoring Brazil's territorial extension and the enormous socio-economic differences between regions contributes to aggravating the lack of correct ideas about income distribution. "It cannot be forgotten that the Northeast region, with 29% of the population analyzed, has 52% of the total number of poor people and 54,6% of income insufficiency, and exhibits poverty measures whose The value is close to twice that observed for the country as a whole", highlights Hoffmann.

Contradictions - He adds that, discussing controversial issues such as the taxation of wealth and the redistribution of income, without the perception of aspects such as those addressed in his work - and here Hoffmann sees a important contribution of his study – leads to serious contradictions.

"The richest 10% have around 47,2% of the total income, which means that their average income is 4,72 times higher than the general average, or around R$4.500,00. However, people with income of this order of magnitude, when discussing tax collection and stating that the taxation of wealth should be increased, consider that rich people are people with income substantially higher than their own", argues. "However, the study reveals that, in fact, they are the ones who would have to be taxed."

For Hoffmann, taxing only the richest 1% of the country - something around 600 thousand people from the economically active population - with the aim of redistributing income would result in the transfer of a fraction o very small part of the total income. "In other words, if the desire is, in fact, to redistribute income, the measure will only bring real results if it reaches the portion of the population that today considers itself middle class."

He finds initiatives such as the minimum income program valid, but insufficient for better distribution. "It is a program that deserves to be expanded, because it provides some type of income to those who have very little, in addition to promoting children's attendance at schools. But the distribution of income in Brazil is not "It will be changed with a single measure. It has to be a constant concern and present in all political and economic decisions."

Personalizedfile of dwarfs
In his study, Hoffmann makes a reference to a renowned passage from the book Income distribution: facts, theories, policies by the Dutch economist Jan Pen, in which he, to describe the distribution of income in England, imagined a parade of people ordered according to increasing income values ​​and admitted that, by magic, people would have a height proportional to their income, so that the average height corresponded to the person with average income.

Hoffmann borrowed the idea from his European colleague and imagined a similar parade, with a large sample of people representing the distribution of income in the Brazilian economically active population, admitting that the entire parade, from the poorest to the most rich, it would last 100 minutes.

In this example, at the end of the 10-minute parade, a person with incredibly low height would be passing by. At the end of 25 minutes, people with a height equal to a quarter of the average would still be passing by. In the middle of the parade, that is, after 50 minutes, dwarfs with a height equal to half the average would be passing by. Only when three quarters of the parade had passed would people of average height, representing average income, be observed.

At the beginning of the last ten minutes, giants with a height equal to 2,1 times the average would parade. At the beginning of the last minute, a person with a height greater than eight times the average height would pass. According to data from the PNAD studied, the parade would end with a person whose height would be 122 times the average.

"Due to the strong positive asymmetry of income distribution, there are many more people with incomes below the average than above the average", explains Hoffmann. Thus, whoever watches the parade imagined by Pen sees, for most of the time, dwarfs passing by. Therefore, Pen stated that this is a parade of dwarves, and only a few giants.