According to IBGE data for the last quarter of 2022, a trend observed in Brazilian metropolitan regions was confirmed: there was a recovery in household income from work, but also an increase in inequality. Between the first and last quarters of 2022, per capita household income from work increased by an average of 13%, from R$ 1,455 to R$ 1,644. At the same time, income inequality, as measured by the Gini coefficient, increased from 0.613 to 0.620, with three consecutive increases. The data suggest that the main reason for this result is that the richest have benefited more from income growth than the poorest.
The 12th edition of the “Boletim – Inequality in the Metropolises” was produced by PUCRS Data Social in collaboration with the Observatório das Metrópoles and the Network of Social Debt Observatories in Latin America (RedODSAL). The data used are from the quarterly Continuous PNAD of the IBGE and refer to per capita household income from work, including only the informal sector. The analysis was carried out in the 22 main metropolitan areas of Brazil, as defined by the IBGE. All values adjusted for the third quarter of 2022 using the IPCA.
Although each metropolis presents different behaviors, in most of them (12 out of 22) the same behavior of growth of inequalities was verified. In Greater São Paulo, for example, the Gini increased from 0.600 to 0.614, and in Greater São Luís it rose from 0.558 to 0.615. At the same time, in all twenty-two metropolises, an increase in average income was also observed. This increase was higher in the Metropolitan Regions of Greater São Luís (36.6%), João Pessoa (34.4%), Teresina (29.3%), Goiânia (22.6%) and Vale do Rio Cuiabá (19 ,0%).
“The combination of an increase in average income and rising inequalities is not uncommon in Brazil, and it occurred because the higher strata showed, in recent quarters, a proportionally greater increase in their income than the poorest”, says André Salata, researcher at PUCRS Data Social and one of the coordinators of the study.
According to the study, while the average income of the poorest 40% grew by 13.4% throughout 2022, among the richest 10% it grew by 17.3%. Consequently, if at the beginning of the year the richest earned, on average, 30.2 times more than the poorest, this figure reached 31.2 times at the end of the year. That is, all strata improved, but the richest improved proportionally more, making the distance between them and the poorest increase over the last year.
The explanation for the increase in average income may be due to two factors. “In 2022, there was a reduction in the unemployment rate, collaborating to increase the increase in household income. In addition, the inflation rate decelerated as of May and June, contributing to maintaining the purchasing power of labor income. Increase in employment and reduction in the inflation rate are the two factors that, together, contributed to the rise in average income of all income strata in Brazilian metropolises”, explains Marcelo Ribeiro, professor at IPPUR/UFRJ and also coordinator of the study.
As the stratum of the richest 10% was the one that most benefited from the effect of these factors, income inequality increased, as there was an increase in the distance between the income level of the richest in relation to the other income strata. The richest jumped from an average income of BRL 6,765 to BRL 7,933, between the first and last quarter of 2022.
Meanwhile, the recovery of labor income among the poorest families, which had been taking shape since the third quarter of 2020 – after a sharp drop at the beginning of the pandemic – loses some of its momentum from the second quarter of 2022.” The recovery of the labor market was enough to bring the average income of the poorest to the level we had immediately before the pandemic. However, today this average is still 22% lower than that found at the peak of the historical series, at the end of 2013. In other words, we have advanced in relation to the fall of recent years, but there is still a long way to go to get closer to the highest values of the historical series . For this, it would be necessary to combine economic growth with improved income distribution”, concludes André Salata.
