3.4 million out of poverty in metropolises in 2022 – 06/21/2023 – Market

After reaching a record level in 2021, the number of people considered poor dropped to 22.7 million in Brazilian metropolises in 2022.

The result means that, within a year, 3.4 million inhabitants left behind the poverty line in metropolitan regions.

The conclusions are from the 13th bulletin Inequality in the Metropolises. The study analyzes available information for 22 metropolitan regions.

In 2021, the population considered poor in these places had reached almost 26.2 million. It was the highest level of the historical series started in 2012.

The bulletin is produced by the PUCRS Data Social research laboratory in partnership with the Observatório das Metrópoles and RedODSAL (Network of Social Debt Observatories in Latin America).

To give you an idea, the 3.4 million people who left poverty in 2022 surpass, for example, the entire population estimated for a place like Brasília (about 3.1 million).

Despite the drop, the contingent still considered poor (22.7 million) is equivalent to more than a quarter of the inhabitants of the analyzed metropolises.

This is illustrated by the poverty rate, which dropped from a record 31.3% in 2021 to 27% in 2022, according to the bulletin.

Both the number of poor (22.7 million) and the rate (27%) last year were above 2019 levels, in the pre-pandemic. At the time, the indicators were at 21.6 million and 26.3%.

The lowest levels of the historical series were recorded by the bulletin in 2014 (18.4 million and 23.4%).

André Salata, coordinator of PUCRS Data Social and one of the authors of the study, says that the recovery of the labor market played a major role in reducing poverty last year.

According to the researcher, this stimulus occurred because work is the main source of household income in the country.

In addition to the employment reaction, the expansion of the Auxílio Brasil to R$600, on the eve of the elections, in the second half of 2022, also helped to raise the income of the poorest, adds Salata.

“Last year’s film is somewhat positive, but the situation is still negative because more than a quarter of the population of the metropolises is still poor”, he ponders.

The new edition of the bulletin was created based on data from Pnad Contínua with an annual cut.

This version of the PNAD, released by the IBGE (Brazilian Institute of Geography and Statistics), goes beyond the labor market and includes other sources of income, including social programs.

Although the target was exceeded for the second consecutive year, lower inflation in 2022 (5.79%), compared to 2021 (10.06%), was another factor that brought some relief to income last year, says Marcelo Ribeiro, researcher at the Observatório das Metrópoles.

“That [inflação menor]in some way, contributed to maintaining a certain purchasing power”, says Ribeiro, who is also the author of the bulletin and a professor at IPPUR (Institute for Research and Urban and Regional Planning at UFRJ).

The study follows World Bank recommendations to define poverty and extreme poverty lines. These measures take into account PPP (purchasing power parity) parameters.

In 2022 values, converted into reais, the poverty line was approximately R$ 636 per capita (per person) per month. The extreme poverty line, in turn, was around R$ 199 per capita per month.

In practice, residents of households whose income per person was below these levels were classified by the bulletin as poor or extremely poor.

“To live in a metropolis, these are very low income levels”, emphasizes Ribeiro.

1.8 million leave extreme poverty

According to the bulletin, extreme poverty also dropped last year. The number of inhabitants in this condition in the metropolises dropped from a record 5.7 million in 2021 to 3.9 million in 2022.

In other words, 1.8 million emerged from extreme poverty within a year. The number of 3.9 million is the lowest since 2017 (3.7 million), but remains far from the series low, recorded in 2013 (2.4 million).

The extreme poverty rate dropped from a record 6.9% in 2021 to 4.7% in 2022. It is the lowest level since 2017 (4.6%).

According to Salata, the trend is for poverty and extreme poverty to continue to fall in 2023. The pace of this reduction, according to him, should be lower than in 2022, since last year’s result came after record levels in 2021.

“I don’t believe there will be a change of the same size, because 2021 had been very negative”, he points out.

In the first months of this year, job creation showed signs of slowing down, but economists still see a strong job market.

At the same time, projections began to indicate higher-than-expected growth for GDP (Gross Domestic Product) and a lower rise for inflation in 2023.

The Luiz Inácio Lula da Silva (PT) government is still betting on the return of Bolsa Família, which replaced Auxílio Brasil, one of the hallmarks of Jair Bolsonaro’s (PL) mandate.

Bolsa Família maintained the benefit of R$ 600, with the possibility of additional payments for families contemplated by the transfers.

Inequality falls, but the abyss persists

The bulletin on the metropolises also pointed out that the average income for the set of metropolitan regions rose to BRL 1,984 in 2022, after reaching the series low in 2021 (BRL 1,862). The increase was 6.5%.

The increase, however, was not enough to bring the average back to the pre-pandemic level of 2019 (R$ 2,124). The indicator is made up of different sources of funds, such as the labor market and social programs.

The layer that most benefited from the upward movement, says the bulletin, was the poorest 40%. In this portion, the average income (R$ 511) rose 17.5%.

Meanwhile, the increase was 8.4% among the intermediate 50% (R$ 1,858) and 2.3% among the richest 10% (R$ 8,515).

Consequently, income inequality was reduced from 2021 to 2022, according to the Gini coefficient. For the metropolises as a whole, the indicator dropped from 0.565 to 0.545. The most recent level is the lowest since 2016 (0.544).

The Gini ranges from 0 to 1. The higher the result, the greater the gap between the extremes of the population.

In 2022, the richest 10% earned 16.7 times, on average, the income of the poorest 40% in the metropolises. The difference remains “very high”, but it is the lowest since 2016 (16.5), points out the bulletin.