Lula welcomes country with half the poverty of 2002 – 10/20/2023 – Laura Machado

Transferring income to the most vulnerable is an objective in itself and the first step towards inclusion in the job market. Bolsa Família is important for alleviating poverty and making the path out of poverty possible. It allows for the emancipation of families and productive inclusion.

With the relief considered, the better and wider the job offers, the greater the probability of family autonomy. Economic growth and income transfer policies are crucial to effectively overcoming poverty. The better the integration of these two mechanisms, the more powerful the contribution.

According to Pnad (National Household Sample Survey), in 2002, 53% of Brazilians lived in households with a per capita income below half the minimum wage. In 2022, 20 years later, we will have 30% of households with per capita income below half the minimum wage: poverty was reduced by half, between the beginning of Lula 1 and the beginning of Lula 3.

Of this reduction of 23 percentage points, 15 points were a consequence of economic growth and 9 points derived from policies to reduce inequality. In addition to the fact that today the country has half the poverty it had 20 years ago, economic growth played an important role in this reduction.

Bolsa Família’s budget in the first ten years of the program was around R$30 billion; in 2023, we have R$175 billion. Considering that economic growth will play its role and that we have the largest budget in history, it is important to analyze the mechanism linking transfer and productive inclusion.

Despite the huge budget, in 2023, if a mother with a small child gets a job for R$450 a month and correctly declares this income in the Single Registry, she will lose the R$750 transfer from Bolsa Família. Not only is the family encouraged to incorrectly declare their income, they are also discouraged from working.

If Brazil wants to be forceful in pursuing article 3 of the Constitution, which has among its objectives the eradication of poverty, we need a design for Bolsa Família that encourages productive inclusion. This can be done by adding a bonus for work.

In the case of a mother with a child who accepts a job, the program could complement the amount received, adding a value for productive inclusion, so as not to impose a loss and encourage work.

This adjustment has a series of benefits: it makes it more effective in combating poverty, improves the quality of income declarations and enhances labor participation. With the right mechanisms, we will be increasingly closer to eradication.

LINK PRESENT: Did you like this text? Subscribers can access five free accesses from any link per day. Just click the blue F below.