Emergency aid essential to recover Brazilians’ income

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Photo: Brenda Rocha/Shutterstock

New analysis by the Brazilian Institute of Applied Economic Research (Ipea) confirms what reporter José Roberto Castro previously highlighted on The Brazilian Report: the BRL 600 (USD 107) emergency aid is making up for a progressively larger share of Brazilian household income, due to an acceleration in aid payments. As a result, the total amount of money provided by the aid is superior to salary losses in Brazil as of July.

According to Ipea, the aid provided BRL 28.5 million for the national economy in July, or 16 percent more than the total income lost among formally employed workers — measured by the difference between pre-pandemic payroll and current levels. In June, that share was 15 percent.

Despite acting as a cushion, the aid is not enough to offset the deep economic losses caused by Covid-19. On average, Brazilian families earned BRL 2,077 in July, the equivalent of 87 percent of their regular income. That share was 4 percentage points above June’s performance, says Ipea. 

Self-employed workers remained the hardest-hit, earning an average of BRL 1,376 in July — or 72 percent of their habitual income. However, this is above the 63 percent recorded in June. 

The share of households that relied solely on emergency aid as an income source remained stable at 6.5 percent, meaning that 4.4 million homes would be left with zero income without government benefits.

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