Narrowing the income inequality gap in Brazil

Global Business

Narrowing the income inequality gap in Brazil

While income inequality worsened in many developed countries over the past decade Brazil is one country that has managed to narrow the gap. While Brazilians are among the first to admit that there is still much work to be done, the country has been showing one possible way ahead. Paulo Cabral reports from Brazil.

There’s a big distance between those at top of the income pyramid and those at the bottom in Brazilian society, but over the last decade the gap has been narrowed considerably.A combination of low unemployment, rising salaries and government financial aid for the nation’s poorest citizens has helped many Brazilians reach the next rung on the country’s social ladder.

The rise in wages gave poorer Brazilians more disposable income to spend on things that are not. In Paraisopolis, one of Sao Paulo’s biggest slums, there are 59 beauty parlors on this street alone, and most of them appeared over the last five years. The neighborhood’s prosperity is the basis of all these small businesses. Railton Santana, born and raised in Paraisopolis, opened his parlor six years ago. Hard work and dedication not only earned him more money, it has helped him get closer to his dream of an even better future.

According to the World Bank’s GINI index, a widely used algorithm to measure inequality, Brazil is one of the most unequal countries in the world. But this World Bank chart shows that in the decade from 2000 to 2010, the gap narrowed by around about 10%. There’s still a huge income gap between the poorest Brazilians and the wealthiest, but based on recent trends economists say Brazilians like Railton stand a better chance of building wealth.

Narrowing the income inequality gap in Brazil

While income inequality worsened in many developed countries over the past decade Brazil is one country that has managed to narrow the gap. While Brazilians are among the first to admit that there is still much work to be done, the country has been showing one possible way ahead. Paulo Cabral reports from Brazil.

Alexandre Barros is the Managing Partner of Early Warning. That’s a political risk and opportunity company based in Brasilia and says the biggest problem facing Brazil poor is rising prices.

Alexandre Barros on income inequality

Alexandre Barros is the Managing Partner of Early Warning. That's a political risk and opportunity company based in Brasilia and says the biggest problem facing Brazil poor is rising prices.