Income of Brazilians in the 1st quarter drops by 8.7% in one year, says Ipea

You Average real customary earnings of Brazilians fell 8.7% in the first quarter of 2022 compared to the same period last year, to R$2,548, says the Ipea (Institute of Applied Economic Research), based on figures from the Continuous National Household Sample Survey (PnadC), released by the IBGE this Friday.

It is about fourth consecutive quarter of decline in income , in the annual comparison. Considering moving quarters, the decline in usual income is the tenth consecutive increase above 5%.

Usual income considers only the worker’s constant flow of payments, without extraordinary accruals such as thirteenth salary, vacation or overtime. If we consider the effective average income, which includes these one-off receipts, the drop was 6.2%. Compared to the same period in 2020, the decline was 8.5%.

Ipea points out in a conjuncture letter that, despite part of this downward movement being the inverse of what was observed throughout 2020, when usual income showed accelerated growth, usual income is below the levels observed before the pandemic.

All demographic groups had a decrease in usual income. The biggest drops were recorded in the Southeast and South, among older workers with higher education.

In terms of effective income, workers from the North, younger and with elementary education were the only ones to show small increases in the first quarter of 2022.

The worst impact of the fall in earnings in the first quarter was on public sector workers, with declines in usual and effective income of 12.9% and 10.9%, respectively.

Private sector employees (with or without a formal contract) also showed declines in earnings, but lower than those observed in the previous quarter, says Ipea.

Self-employed workers, who had seen effective income growth in recent quarters, and experienced smaller declines in usual income, showed a deterioration in income in early 2022, with effective and usual incomes falling by 2.8% and 6 .4% respectively.

household income per person

The average monthly household income per person fell by 6.9% in 2021, from R$1,454 in 2020 to R$1,353, the IBGE reported this Friday (10). This is the lowest value of the historical series, which started in 2012.

Despite being widespread among social classes, the drop in income was greater among people with lower incomes. The research shows that, among the 5% with the lowest income (R$ 39), the decline was 33.9%. Among those from 5% to 10% (R$ 148) it fell by 31.8%. Among the 1% with the highest income (R$ 15,940) it fell by 6.4%.

“In other words, in 2021, the 1% of the Brazilian population with the highest income had an income 38.4 times higher than the average of the 50% with the lowest incomes”, says the survey.

North and Northeast recorded the lowest values, R$871 and R$843, respectively, and also the highest losses between 2020 and 2021, of 9.8% and 12.5%, says the institute.

South and Southeast remained with the highest incomes, of R$ 1,656 and R$ 1,645, respectively.

*In update