The evolving identity of Brazil's middle class
Defining who is 'middle class' in Brazil is a complex task, as the country's traditional middle class often sees itself as at odds with the new middle class.
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It's useful to have a realistic perspective on Brazilian social classes, since the media often provides a confusing view on what it's really like, especially with all of the excited and sometimes overblown talk of an economic miracle. The most recent example is this New York Times article from last weekend, heralding the influx of foreigners in Brazil, chasing the country's economic boom. It only glossed over the fact that many of these foreign workers are getting hired instead of Brazilians, either because of a lack of skilled local workers or because some firms prefer to import managers from the US and Europe. It also briefly mentioned that more educated Brazilians are returning to Brazil looking for jobs, a reverse brain drain, and are sometimes finding themselves competing with highly paid foreigners with hefty relocation packages. It failed to mention altogether than the vast majority of the work visas issued are temporary, for between 90 days and 2 years, and less than 4,000 work visas were extended in 2011 (meanwhile, nearly 25,000 temporary visas were issued this year, over half of which were for a stay of one year or less). This means that while Brazilians coming home from abroad are coming for good, many foreigners coming to work aren't relocating permanently – at least not officially.Skip to next paragraph
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Finally, it's important to understand the financial limitations of both the new and traditional middle classes: namely, a high tax burden, inflation, and a rising cost of living, all of which reduce purchasing power and increase consumer debt. This week, UBS released its cost of living study, which showed that despite rising salaries, Brazilian purchasing power has actually declined. It is now as expensive to live in São Paulo as it is to live in New York, but salaries in São Paulo are 61 percent less than in New York. Similarly, the cost of living in Rio is amongst the highest in the hemisphere, but Rio salaries are 66 percent less than New York salaries. (Read the full report here)
So what does this mean for the middle class? The culture gap between the traditional and new middle class will likely persist, but the new middle class is challenging perceptions about how increased access to higher salaries, skilled jobs, and increased consumption can change a person's standing in a country that has historically been highly stratified, and where social mobility wasn't always easy. It will be interesting to see how people self-identify in five years to define what the Brazilian middle class has become.
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