What happens when Brazil’s coronavirus emergency aid ends?

“BRL 600 (USD 110) is too much. Someone in the Economy [Ministry] mentioned BRL 200. I think that is too little, but we can reach a middle ground,” said President Jair Bolsonaro on Wednesday, when talking about his wishes to extend the coronavirus emergency salary Congress created back in March. 

Forced into action to offset the economic effects of the Covid-19 pandemic, Brazil created the broadest and largest cash-transfer project in its history. In just five months, the Treasury Department has spent BRL 254 billion (USD 46 billion) to provide income to vulnerable people who would otherwise have next to no revenue.

Between April and August, roughly 65 million people received the benefit — including informal workers, individual microentrepreneurs, self-employed or unemployed workers. In other words, people whose bread-winning abilities were crushed by the months-long halting of the in-person economy, and who would not be able to make ends meet without government aid.

The positive effects of the emergency salary are impossible to miss. It prevented around 23 million Brazilians from instantly falling into extreme poverty and boosted Mr. Bolsonaro’s approval rating to its highest level since taking office. The data comes from a study by the Solidarity Research Network and considers the poverty line threshold at per capita revenue of USD 1 per day.

While five percent of the Brazilian population remain under this line, this rate would be at 17 percent if not for the government-sponsored benefit. And while USD 110 doesn’t go a particularly long way, it is more money than some Brazilians have ever seen in a single month. For one-third of the population, revenue increased during the pandemic thanks to the emergency salary...