Brazil’s Middle Class: Poorer Than You Think

Via The Financial Times, an interesting report on the realities and misunderstandings about Brazil’s middle class.  As the article notes:

“Talk to an economist about Brazil and sooner or later the same old cliché will pop up: ‘the rise of the middle classes’.

This stock phrase has become the go-to explanation for pretty much everything in Brazil; from why the country’s retailers are posting record profits, to why traffic is so bad in São Paulo, and why Chinese manufacturers are lining up to invest in local factories.

But who are these new middle classes, the C class that now includes 95m Brazilians and makes up just over half of the country’s population?

For Brits, this might mean anyone who shops at Brazil’s version of Waitrose or who has golf clubs in the back of their Volvo. Alternatively, if you’re in the US, maybe it’s an image of white picket fences springing up across the Amazon.

But Brazil’s middle class is, by most of these people’s standards, poor. The government’s definition is any household with a combined monthly family income of between R$1,000 ($631) and R$4,000. In other words, a whole family surviving on about $20 a day is still considered middle class.

Interestingly, though, a new study by Brazil-based Data Popular shows that Brazilians also make the same mistake.

Only a third of middle class Brazilians knew they belonged to Class C, while the rest identified themselves as lower-income or poor, according to Data Popular, which interviewed 3000 people across 251 cities.

Similarly, 55 per cent of upper class Brazilians identified themselves as middle class and 35 per cent as lower income.

It was only the poorest Brazilians that actually got it right. Just over 80 per cent of lower-income individuals classed themselves correctly.

This tendency to identify with a lower social class could have the following explanations:

About 31m Brazilians only entered the middle class between 1999 and 2009 so it will take time for people’s perceptions to change.

Brazil is expensive. If you’ve been to São Paulo recently you’ll see that many things cost the same as (or even more) than they do in the US or Europe. If you’re earning a Brazilian wage but paying developed world prices, no wonder many still feel poor.

Aspirations are high. Since the US has a strong cultural influence on Brazil, when Brazilians think of the middle class, they also often think of a much higher standard of living than $20 a day could afford. If Brazil really is a US in the making, then the ‘middle class’ is still very much an aspiration, and not a reality

This entry was posted on Thursday, August 18th, 2011 at 6:10 pm and is filed under Brazil.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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