Average per capita income evolution R$ at 2009

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1 Average per capita income evolution R$ at * * , 40,5 7,95 506,70 514,75 518,96 527,24 483,99 506,53 507,72 477,89 492,45 524,75 572,69 585, ,65 630,25 1

2 2 Increase of Average househol Per Capita Income (all sources) 2001 to 2009Aumentodarendafamiliarpercapitaacumulada Menosde10%de10%a20%de20%a30%de20%a30%de30%a40%Maisde40% Average Income PNAD X GDP The magnitude of the resumption of growth in the period depends onthe database used: GDP period depends on the database used: GDP grows 3.78% in per capita per year, slower than the National Survey by Household Sampling (PNAD), 5.26 % per year, also discounting population growth and inflation. According to PNAD 2009 income i th GDP 15% f grows more once gain than GDP: 1.5% of per capita GDP against a positive growth of 2.04% in PNAD.

3 300,00 Welfare evolution R$ Sen s 1976 Measure = Average * (1 Gini) 280,00 260,00 240,00 220,00 200,00 180,00 160,00 203,00 204,93 207,36 210,84 196,67 204,79 208,87 199,29 211,21 226,57 250,68 260, ,81 286,92 140, , , ,41 100, * * Gini s index Evolution 0,62 0,61 0,60 0,59 0,58 0,57 0,56 0,55 0,54 0,53 0,52 0,5832 0,6068 0,5994 0,6019 0,6004 0,6001 0,5937 0,5957 0,5886 0,5830 0,5711 0,5682 0,5623 0,5550 0, , , * *

4 Inequality Gini s Index Source: CPS/FGV based on microdata from PNAD and Census / IBGE Accumulated Variation of Average Income by Income Tenths - Brazil (2009/2001) Richer 4

5 Variation of the Annual Per Capita of Average Income per Income Tenths - Brazil (2009/2008) Richer Variation of the Annual Per Capita of Average Income per Income Tenths - Brazil (2009/2003) Richer 5

6 Variation of the Annual Per Capita of Average Income per Income Tenths(2009/2001) Richer Total Income Participation in Brazil 41,8% 42,8% 15,4% Source: CPS / FGV based on microdata from PNAD / IBGE 6

7 Definition of Economic Classes Total Household Income from All Sources Earnings Brackets Inferior Superior Class E Class D Class C Class B Class A

8 Economic classes evolution Class AB/C Class D/E ,1 59,6 61, , ,9 30 Fonte: CPS/FGV a partir dos microdados da PNAD/IBGE Economic classes evolution Class AB Class C Class D/E , , , , , ,6 0 Fonte: CPS/FGV a partir dos microdados da PNAD/IBGE 8

9 Economic classes evolution Class E % -4.32% Class D % -3.00% Class C 34.32% 2.49% Class B 38.51% 3.49% Class A 40.99% 0.18% Fonte: CPS/FGV a partir dos microdados da PNAD/IBGE Population Difference by Economic Classes Class E -20,481,069-1,022,145 Class D -2,431, ,083 Class C 29,063,545 3,172,653 Class B 3,391, ,181 Class A 3,253, ,487 Fonte: CPS/FGV a partir dos microdados da PNAD/IBGE 9

10 The Population Pyramid divided in Economic Classes Class DE Class C Class AB Population by Economic Classes Total 175,398, ,758, ,001, ,218, ,384, ,440, ,194,383 Class E 49,319,851 45,147,533 41,047,646 35,196,724 33,659,359 29,860,927 28,838,782 Class D 46,884,477 48,286,025 48,713,422 48,006,542 46,298,711 45,399,117 44,453,034 Class C 65,871,283 70,620,183 75,266,800 81,889,806 86,476,548 91,762,175 94,934,828 Class B 6,977,329 7,100,301 7,583,287 8,549,859 9,271,379 9,925,842 10,369,023 Class A 6,345,080 6,604,018 7,390,555 8,575,570 8,678,295 9,492,229 9,598,716 10

11 The Key Role of the New Middle Class. Politics The 94.9 million Brazilians who are in the new middle class represent 50,5% of the population. This means that the new Brazilian middle class not only includes the median voter taken as the one who decides d the second round of an election, but that this class alone could decide an election campaign. The Key Role of the New Middle Class Economics The new middle class is also economically dominating, concentrating more 46.24% of the purchasing power of Brazilians in 2009 (it was 45.66% in 2008) surpassing those classes AB with 44.12% of total purchasing power. The other classes D and E now has 9.65% of the purchasing power (falling from 19.79% just before the release of the Real Plan. 11

12 Class A Evolution Class B Evolution 12

13 Class C Evolution Class D Evolution 13

14 Class E Evolution Economic Classes More Detailled Definition Total Household Income from All Sources Income Brackets limits Inferior Superior Class E Class E Class D Class D Class C Class C Class B Class B Class A Class A

15 14,31% 7,23% 7,28% ,81% 8,78% 8,05% Economic Classes Evolution More Detailed Classification 13,69% 11,28% 10,81% 13,04% 13,07% 12,81% 18,68% 22,69% 22,31%,53% 28,13% 18,88% 26, 2,01% 2,86% 2,94% 1,97% 2,46% 2,57% 1,83% 2,55% 2,50% 1,78% 2,54% 2,60% E2 E1 D2 D1 C2 C1 B2 B1 A2 A Income Mass by Economic Classes More Detailed Classification 29,2 2% 3 1,8% 32,9% 1,4% 0,5% 0,4% 3,1% 1,5% 1,4% 4,8% 3,1% 2,9% 6,6 6% 5,1% 4,9% 14,3% 13,8% 13,4% 5,8 8% 6,4 4% 6,4 4% 7, 6, 7,,1% 9%,0% 9,1% 9,7% 9,3% 18,6% 21,3% 21,4% E2 E1 D2 D1 C2 C1 B2 B1 A2 A1 15

16 16 Annual Rate of Poverty Reduction (Class E) 2003/2009TaxaAnualdeReduçãodaPobreza Até5%de5%a7,5%de7,5%a10%de10%a12,5%de12,5%a15%Maisde15%1993/1995TaxaAnualAté5%de5%a7,5%de7,5%a10%de10%a12,5%de12,5%a15%Maisde15%Source: CPS / FGV based on microdata from PNAD / IBGE Annual rate of growth in class ABC 2003/ /1995TaxaAnualdeCrescimentodasClassesABC Até5%de5%a7,5%de7,5%a10%de10%a12,5%de12,5%a15%Maisde15%Source: CPS / FGV based on microdata from PNAD / IBGE TaxaAnualAté5%de5%a7,5%de7,5%a10%de10%a12,5%de12,5%a15%Maisde15%

17 % Poverty In Minimun Wages Lines , , , , ,87 23,96 19,85 18,71 52,96 less than 1/4 1/4 to 1/2 more than de 1/2 17

18 Classic Indicators of Poverty 2003 % Poverty In Minimun Wages Lines ,0 32,50 30,58 Up to 1/2 Consumers and Producers 18

19 Simulador de Renda Is it Sustainable? The synthetic indicator of potential consumption power increasedby 22.6% between 2003 and 2008, while the index of the generation of income raised 31.2%. Difference of 38% in favor of the production side. During the crisis these indexes raised 2.49% and 3.05% respectively. 19

20 Net Generation of Formal Employment - BRAZIL Yearly (2000 to 2010 July*) * * up to august only Source: CPS/FGV based on microdata from CAGED / M T E. 20

21 Occupation Occupied 1992 to years or more* 21

22 Occupation Occupied years or more* 67,33% 61,29% 49,24% 41,84% class AB class C class D class E Fonte: CPS/FGV a partir dos microdados da PNAD/IBGE Occupation Profile of Economic Classes 2009 Position on the Occupation Category CLASS AB CLASS C CLASS D CLASS E Unemployed 2.14% 3.86% 7.20% 10.11% Inactive 30.53% 34.84% 43.56% 48.05% Agricultural employee 0.29% 2.33% 4.49% 4.68% Domestic employee 0.57% 4.53% 5.95% 4.27% Formal Employee 21.11% 22.96% 11.77% 4.31% Informal Employee 4.85% 6.75% 6.68% 4.47% Self employed 11.89% 11.85% 11.00% 11.05% Employer 9.81% 2.14% 0.55% 0.55% Public Employee 16.84% 7.09% 3.19% 1.61% Unpaid 1.95% 3.65% 5.62% 10.90% 22

23 Pension Contribution Private and/or Public (Social Security) Contributes to Social Security Contributes Soc. Sec. Pub. & Priv Contributes Soc. Sec. Public Contributes Soc. Sec. Priv Unemployed Inactive Digital Assets Computer with internet at Home 1992 to

24 Digital Assets Cellular Phone (at lest one at Home) 1992 to 2009 Digital Assets At Home COMPUTER Have computer with Internet Have computer Doesn t have computer Unknown TELEPHONE Have fixed and Cellphone Have fixed Have Cellphone Doesn t have fixed and Cellphone

25 Digital Assets at Home 75,82% Computer with internet ,90% class AB class C 9,69% class D 6,73% class E 95,92% 86,23% Cellular Phone ,23% 62,81% class AB class C class D class E Education Evolution (years) Average Years of Schooling Brazil Age 25 years or more 25

26 Education Evolution (%) of the population by Educational Level EDUCATION OF THE HEAD Without education or less than 1 year to to to or more EDUCATION OF THE SPOUSE Withouteducation or less than 1 year to to to or more Education Completed Years of Schooling (pop. with 25 years or more) ,00 7,18 5,46 4,98 class AB class C class D class E Attends or attended Schools ,67% 10,47% 2,07% 2,44% class AB class C class D class E 26

27 Public Services Sewage 1992 to 2009 Public Services Garbage collected directly 1992 to

28 Public Services 72,02% Sewage ,78% 40,45% 30,65% class AB class C class D class E Garbage collected directly ,85% 87,46% 76,97% 64,20% class AB class C class D class E Consumer Goods Washing machine 1992 to 2009 Washing machine ,72% 53,22% 24,96% 16,48% class AB class C class D class E 28

29 99,54% 97,62% 96,00% 7/10/2010 Consumer Goods Refrigerator 1992 to 2009 Refrigerator ,69% 97,49% 92,50% 79,82% class AB class C class D class E Consumer Goods Television 1992 to 2009 Television ,16% class AB class C class D class E 29

30 More than 3 bathrooms 1992 to 2009 More than 3 bathrooms ,24% 1,07% 0,23% 0,35% class AB class C class D class E Financed homeowners 1992 to ,74% Financed homeowners ,97% 2,98% 1,69% class AB class C class D class E 30

31 Evolution (%) Population by Housing Condition Own already paid Own still paying Rent below the median Rent above the median Given Other condition ORDER OF ENTRY IN THE MODEL 1 Number of per capita 2 Telephone 3 Spouses education 4 Type of family 5 chefe contribui para previdência head contributes to social security 6 Washing machine 7 # of bedrooms per capita 8 Head s education 9 position on the head s job 10 school attendance of child(7 to 14 years) 11 school attendance of child (0 a 6 anos) 12 position on the head s job 13 Computer 14 Refrigerator 15 school attendance of child (15 a 17 anos) 16 type of home (own, lease and financing) 17 Syndicalized Head 18 Freezer 19 # of bedrooms per capita 20 sewage 21 Radio 22 # of bathrooms 23 number of residents 24 Television 25 Garbage colected 26 age that the head started to work 27 number of rooms 28 share of labor income 29 # of bedrooms 31

32 Pre Crisis (Dec 2002 a 2009 x Crisis (Dec 2008 a 2009) Class ABC Class AB Class C Class D Class E Income Gini THEIL 0,4% 2,4% 8,2% 1,5% 0,4% 1,6% 4,2% 1,8% 0,1% 3,8% 4,2% 2,0% 3,7% 1,4% 3,8% 0,0% dec02 to dec08 dec08 to dec09 Source: CPS/FGV based on microdata from PME/IBGE Variation in Economic Classes in Post-Crisis Class ABC Class AB Class C Class D Class E 0,8% 1,0% 0,8% 5,3% 0,7% 1,2% 0,8% 3,0% 0,6% 6, 7% 2,3% 0,6% 2,7% 2,2% 0,2% 2,5% 2,5% 1,2% 4,1% 1,1% set08 to dec08 dec08 to jan09 jan09 to set09 out09 to dec09 Source: CPS/FGV based on microdata from PME/IBGE 32

33 Class ABC Class AB Class C Class D Class E 0,4% % 13,0% 2,4% 1,5% 3,8% 0,1% 3,9% 5,5% 4,2% 2,0% 7,8 3,7% 2,9% 3,4% 1,4% dec02 to dec08 dec08 to dec09 janjun09 to janjun10 jul09 to jul10 7,7 7% 12,4% 8,2 % 8,6% % 11,3% Source: CPS/FGV based on microdata from PME/IBGE 3,8% Class ABC Class AB Class C Class D Class E 12, 0,4% 2,4% 3,2% 3,4% 3,7% 4,8% 4,2% 4,4% 5,5% 4,2% 2,0% 5,5% 7,2 2% 5,3% 9,2% 10,3% 9,7% 13,0% 3,7% 4,6% 4,9% 8,4% 9,3% 8,8% 10,0%,4% 8,2% 0,1% 7,9% 8,7% 7,2% 10,0% 8,8% 9,0% 1,3% 1,4% 1,5% 2,5% 2,4% 3,3% 3,6% 2,5% 3,0% 3,4% 1 dec02 to dec08 dec08 to dec09 jan09 to jan10 feb09 to feb10 mar09 to mar10 apr09 to apr10 may09 to may10 jun09 to jun10 jul09 to jul10 Source: CPS/FGV based on microdata from PME/IBGE 33

34 income Gini THEIL 0,4% 1,6% 1,9% 1,4% 4,2% 1,8% 5,1% 2,7% 0,0% 3,8% 3,6% 7,7 7% dec02 to dec08 dec08 to dec09 janjun09 to janjun10 jul09 to jul10 Source: CPS/FGV based on microdata from PME/IBGE income Gini THEIL 0,4% 1,6% 1,8% 1,5% 1,5% 2,2% 1,9% 2,2% 1,4% 7,2% % 6,2 2% 5, 4,2% 1,8% 3,8%,8% 3,4% 4,3% 2,7% 0,9% 0,0% 3,8 8% 3,9 9% 3,6 6% 5,1% 4,6% 3,7 7% 7,7% dec02 to dec08 dec08 to dec09 jan09 to jan10 feb09 to feb10 mar09 to mar10 apr09 to apr10 Source: CPS/FGV based on microdata from PME/IBGE 34

35 Elections and Expantions" Variation in Median Income and Electoral Cycles* % % % % % % % % % % % % % % % % % % % % % % % Obs:In 1991, 1994 and 2000 PNAD did not go to the field 35

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