Andréa Novais

Andréa Novais

The Brazil Business


The difference between being poor and living poorly

Andréa Novais

Andréa Novais

The Brazil Business


Living as a regular middle class citizen in Brazil is so expensive that sometimes it is better to live among the poorest ones. This may sound nonsense to the ears of foreigners who are not familiar with the Brazilian popular culture, but there are some reasonable explanations for it.

Being poor is not necessarily the same as living poorly. Of course, poor people are not in this situation because this is what they have chosen, but sometimes the path to a better life (in terms of income, at least) is too long and difficult, so it is better to adapt to a poor life style, even when you are not that poor.

Belonging to the middle class is expensive and once you cannot belong to the upperclass, it can be better to stay where you are and enjoy the small pleasures your life style can give you, such as a big plasma TV or a nice mobile device. It may be hard for foreigners to understand how some Brazilians could have come to such conclusion and this is what I will try to explain in the article below.

Irregular versus regular jobs

According to FGV – Fundação Getúlio Vargas –, even though Brazilians have considerably increased their educational level, 37% of them still rely on irregular jobs. In some cases, this is not a matter of being unskilled, but a matter of making much more money this way.

A street vendor who makes his living selling hotdogs in front of a school probably makes more money this way than working as a regular employee. This is due to the fact that there are several discounts applying to the employee’s salary, such as:

  • INSS – from 8% to 11%, according to the salary.
  • Income tax – depends on the salary. The employee can be exempted or pay up to 27,5% of the salary.
  • Transportation – a discount of 6%.

So let’s say that the worker has an income of BRL 2200,00 as a street vendor. If he were an employee, he would receive BRL 1705,00 (BRL 132 for transportation, BRL 198,00 for INSS and BRL 165,00 for the income tax).

The problem with this is that, apart from being illegal in many cases, the worker will have limited access to the benefits granted by Previdência Social and one of the consequences is the impossibility to retire due to service time, having to wait for a certain age to retire and with a lower salary.

Also, self-employed workers are responsible for their own vacations and do not have the rights to FGTS or 13th salary, for example.

Living in the slums

What are the slums?

According to IBGE, 6% of the Brazilian families are living in the slums. This percentage may seem to be very low if compared to the poverty we see in Brazil, but we must consider that slums are an urban phenomenon and are not the only result of unequal distribution of income. Poverty in the countryside has other faces.

Slums are a direct result of the lack of housing policies and of the concentration of the population in a certain area. With increasing prices for real estate in downtown areas, more and more people have been pushed to the outskirts of the cities and occupied areas that were not destined for housing in the first place. This is the case of the occupation of areas surrounding streams, railway tracks and hills, especially in Rio de Janeiro and São Paulo.

The vertical favela

Slums – or favelas, as they are known in Portuguese –, have always been a problem for the federal government, that through partnerships with prefectures and state representatives, has tried to solve the situation through the creation of housing programs, such as Minha Casa, Minha Vida.

The problem is that some people have built large houses in the slums and even rented part of it to make some money. All the houses offered by the governmental initiatives have the same size (mostly 50sqm divided into a kitchen, a living room and two tiny bedrooms) and very rarely offer a garage. Most families living in the slums are composed by more than five people, so it gets complicated to live in such a small space.

Also, apart from some communities that have gone through urbanization processes like Rocinha, people who live in the slums don’t pay for electricity, water or IPTU. It is a lot cheaper to live in the slums and this is one of the reasons why people who are granted with a house outside the slum end up coming back.

The major problem about living in "favelas" is not necessarily the lack of safety (although fires are very common due to the clandestine electricity), but the stigma of living in such place. “Favelado” is a pejorative term used to refer to people who live in the slums and even though this has changed a little bit over the past 30 years, there still is a strong prejudice within Brazilian society who tends to despise those who live in these areas.

It is not uncommon to hear of people who lived in the slums, had the chance to leave it and lived in a different neighborhood for a while, but then decided to get back, claiming that it was impossible to adapt to the new place.

Apart from those who do not adapt to the new house, there also those who take advantage of the situation. In São Paulo city there had been reports of people who lived in the slums, were granted with a house or an apartment and decided to sell or rent the property and get back to the slum. For this reason, most properties offered by housing programs cannot be sold or rented under any circumstance.

If you ask one of these people who have decided to get back to the slum, he/she will probably tell you that, besides being cheaper and even more comfortable to live in the slum, it does not make any difference as moving to a different house does not take the stigma away. It is the same as taking the favela and placing it somewhere else, with a different façade. All the people living there are still the same, with the same habits and the same standard of living.

The governmental measures are not a real attempt to change the life of the people living in the slums, but rather an attempt to turn these people into regular taxpayers. Also, in most cases the eviction is caused by the need to use that space for the construction of a new factory or to give room to a highway. Very rarely the government will bother with the situation (unless it is election time).

The other face of living in the slums

Unfortunately, slums are often seen as a dangerous place where you should avoid going to, what is not necessarily true. Those who live in the slums claim that they feel much more safety while in the community than when they are in downtown areas.

To this extent, several measures have been taken in order to decrease this abyss between the slums and the rest of the city. One of them is “Favela Adventures”, an initiative that had turned favela da Rocinha, the largest Brazilian favela, into a touristic destination and gave its inhabitants the opportunity to show a different side of the community and to diminish the stigma of what it means to live in the slums. Hopefully similar projects will be adopted in São Paulo and Distrito Federal, two other states with a significant concentration of slums.

Different priorities in life

The understanding of what it means to be successful in life is very complicated in Brazil. Of course, Brazilians – just like almost the rest of the world –, associate success with money, but the particularity about them is that instead of effectively doing something to achieve this standard, they would rather concentrate all their effort to appear that they belong to that standard of living.

I’ll explain: instead of actually going to school, saving money and having the necessary patience to achieve what they want, they would rather acquire objects and services that would somehow represent this standard they would like to achieve.

So instead of investing in education or saving some money to buy their own house, they would rather buy a 52” high definition plasma TV that would occupy 1/3 of their living room. It is not uncommon to see Brazilians who live with a minimum salary, but own two to three mobile devices. This is the shortest way to have a taste of a life standard that they would like to achieve.

Of course, this isn’t true for all Brazilians and a proof of this is the increasing number of college students over the last ten years. This is only an example to how Brazilians tend to give different priorities to things that are considered to be essential in other cultures.

Another example is that most Brazilians do not have any insurance for themselves or their families. We tend to expect for governmental assistance, we see this as our right and as an obligation of the government. Most of us think that paying for a private insurance is abusive as we already pay enough taxes to have access to health services, regardless of how terrible they are.

So it is fair to say that the priorities of most Brazilians are closer to look like something than to effectively be it. It is easier to look like you belong to a certain social class than to work hard for social mobility. I would even say that this switch of priorities is a way to deal with the difficulty (and in some cases impossibility) of achieving social mobility.