Bolsa Família will no longer be able to reduce poverty – 05/13/2023 – Vinicius Torres Freire

The income of Brazilians grew in 2022, say the IBGE figures released last week. The information caused a certain indifference. It’s understandable.

The year 2021 had been the worst of a dark decade. Even so, the destitution was greater for the poorest. On average, the increase in per capita household income was 6.9%. For the poorest 10%, 57.3%.

With Lula’s Bolsa Família 3, the income increase of the poorest should be significant in 2023. But, from now on, it will be very difficult for these people’s lives to improve through increased income transfers.

First of all, explain the “improvement”. The average income per person among the poorest 10% went from R$102 per month in 2021 to R$162 in 2022. It is misery.

In 2021, the lack of work was the worst in the decade, apart from the 2020 of the beginning of the epidemic. The dark government wiped out emergency aid. It was social terror. In mid-2022, Jair Bolsonaro came with Auxílio Brasil because his candidacy was sinking. It was an improvised social program, bad, but it paid more.

Even so, in 2022 per capita household income was one of the lowest in the decade. It was 4% lower than in 2014, on average. For the poorest tenth of the population, 9.5% lower.

The improvement from 2021 to 2022 was due “mainly to Auxílio Brasil. This increase in transfers also led to a smaller job offer for young people with little schooling, which forced an increase in the wages of less qualified workers”, says Daniel Duque, a researcher from the area of ​​Applied Economics at FGV-IBRE.

Although the Auxílio Brasil has made a difference, most of the income comes from work: 72%, even in the tenth poorest case in the country; 86% among those in the next decile of income.

From 2021 to 2022, 74% of the increase in the income of the poorest decile came from an increase in income from work, according to Pnad/IBGE data compiled by Duque.

Compared to 2019, however, the increase in income derived from work accounted for 33% of the increase in income of the poorest 10%; the Auxílio Brasil, by 67%, in the accounts of this journalist. It is an exceptional increase in several ways. Others like this will not be possible.

In 2019, expenditure on the program was BRL 41.8 billion, close to the 2012-2019 average of BRL 41.3 billion. In 2022, it increased to R$91.5 billion, under the name of Auxílio Brasil. In this 2023, it should be R$ 167 billion. Values ​​are corrected for inflation.

Spending on Bolsa Família should reach 9% of federal spending in 2023. In 2010, the last year of Lula 1, it was 2% of the total. In 2014, the last year of Dilma 1, 2.5%.

Where to get more?

Almost 80% of federal spending goes to Social Security/INSS (44%), civil servants’ salaries and pensions (18.7%), BPC (9%, for people with disabilities and the elderly poor), unemployment insurance and allowances (3. 2%) and Bolsa Familia.

The government is in the red. The coming tax increase will barely cover the deficit.

Investment in works, equipment, etc. equivalent to less than a quarter of Bolsa Família. Even if it goes to R$ 75 billion, as Lula 3 wants, it reaches 45%. In order to increase growth by one tic, you need to invest more.

The country is poor, after all.

The average value of Bolsa Família was R$ 670 in April. Equivalent to 51% of the minimum wage. The minimum wage amounts to 46% of the average labor income (“salary”) and much more than the median income. The values ​​of Bolsa Família and the minimum wage are at the limit, given the low income (GDP per capita) of the country.

Improving taxation can minimally alleviate poverty. We need to accelerate growth. Make the country more productive, find sectors that “pull” investment. The source of the extra income transfer will dry up.

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