One of the great things about my work is that I get to meet some of the most interesting and successful people in Brazil.
The other day I was teaching a very nice woman from an international chemical company and we somehow ended up discussing the Brazilian middle class.
In the special edition of the Economist, “The World in 2009”, page 52, article Building on the B in BRIC, president Lula said the Brazilian middle class is [quote] now in a majority, 52% of the population [unquote].
I personally thought the statement outrageous and started some research on what the Brazilian government considers “middle class”. During my research, I also found out the this very statement caused quite an uproar in Brazilian society.
The FGV (Fundação Getulio Vargas) classifies the middle class as any family with an income above R$1.062. I then stumbled on a debate generated from this controversial statement (see http://www.jornaldedebates.com.br/debate/quem-classe-media-no-brasil/12420) from which I will extract and translate the following:
“At the time this survey was published, Folha de S. Paulo interviewed residents of Vila Kennedy, in the suburbs of Rio. Pensioner João Galdino de Melo, considers that minimum family income for a middle class family should be R$ 4.000 a month. He and his offspring have a joint income of R$ 2.400 and the family considers itself poor. His children study in private colleges and do not earn enough to pay for their own expenses so he has to use part of his pension of R$ 1.200 to help make ends meet. At home, Galdino has a TV, fridge, cooker, sound system, DVD player and computer. Cable TV and broadband internet are provided by an “illicit” operator. An 18-year-old Fiat Prêmio sits in the garage.”
Even ex-employee of Petrobras José Camilo Neves, with a pension of R$ 3.400 month scoffs at the idea of being “middle class”, with 5 people at home depending on his income. He also complains that there is never enough left for leisure and that he lives on a road without proper paving that, until recently, still had open-air sewage.”
So what is middle class in Brazil?
10%, offered my student, not more than that.
Are you middle class? I asked her.
Yes, she said. I live in a secured condo and have a stable job.
So rich would be someone that owns a company, right?
Right, we agreed.
My student then made a very healthy and illustrative comparison with the French middle class. In France, the middle class depends on public services such as health care and education, and they all have their own homes and at least one car. Tax load is 45% of their income, which is the same as in Brazil, but they can actually depend on these services.
In Brazil, on the other hand, a family with a middle class income also has to cover schooling for all the kids and healthcare plans for the entire family, as most wouldn´t be caught dead using public education and health services (and rightly so).
On the other hand, my student said she has a better quality of life than her French counterparts, who could never afford a maid, for example.
Thinking about all this information, I have come to the conclusion that she was right. The real middle class in Brazil is not more than 10%, which would be within the income margins of my student (probably more than 8000 a month). This is the only income that could cover all the deficiencies of public services, including security.
The government version of the Brazilian middle class is, in fact, a massive portion of the poor trying hard to pay for instalments of cars, homes and electrical appliances. The top layer of this struggling class manages to also pay for a family health plan and a reasonable education for their 1-2 offspring.
The real middle class (considered by most as the upper class), on the other hand, has a solid education, at least 6 years of higher education, their own homes, some instalments to pay (LCD TV and a car, maybe), a decent job and the terrible load of having to account single-handedly for the future of their children, security of their homes and health and insurance for their entire family. The real middle class cannot depend on public services and does not listen to Lula.
So, as always, the Brazilian government has chosen to blow up statistics in the hope of improving their position in international rankings without actually having to tackle the real problem, as they did with school attendance rates. O jeitinho Brasileiro at its best.
So, how much should a family/breadwinner minimally earn to live a middle class lifestyle in Brazil?
I once started a discussion in the Gringoes.com forum with the question, “how much do you need to live well in Brazil?” After weeks of discussion and venting of personal experiences, all participants agreed that, in order to be middle class, you need at least 5.ooo reales a month for one couple with 1-2 kids.
This standard of living allows an economy car for the couple, private schools with transport for the kids, healthcare plan for all four member of the family, credit cards, basic facilities (gym, etc) and fairly adventurous holiday destinations (in Brazil). Housing is either a two-bedroom flat in modest neighbourhood of a large Brazilian city or a decent house in some up-state or coastal city (excluding Rio, of course).
Don´t you agree? Comments would be really welcome.