2004/04/13

A new approach to poverty. Why are some people rich?

Inter Press Service (IPS)

Rio de Janeiro, April 13. After decades of focusing on poverty in the search for ways to fight the enormous rich-poor gap in Brazil, researchers are now turning their gaze towards the wealthy.

''We must study inequality from the other extreme in order to determine its redistributive potential'', Marcelo Medeiros, of the Ministry of Planning's Institute for Applied Economic Research (IPEA), told IPS. Medeiros recently completed two discussion texts on the income sources and family structures of Brazil's wealthier social strata.

Meanwhile, a group of professors from various universities around Sao Paulo just published the book Os ricos no Brasil (The Rich in Brazil). They are the first studies of their kind, centered on the economic elite, and open new roads for the debate on the possibilities of transferring the wealth of the richer segments of the population to the poorer, said Medeiros. But his analysis, based on official figures form 1997 through 1999, seems to indicate there are difficulties in redistributing wealth. The data show that work-related income represents three-quarters of what the rich take in, and just two percent comes from interest, dividends or other financial applications.

Work income in this case includes not only wages, but also independent payments to professionals and the benefits that employees and executives receive directly from their companies, and which can be confused with capital income. Retirement and pension payments represent 18 percent of the rich segment's income, and rent payments five percent. This rich segment, according to Medeiros, includes those who earn at least 2,170 reais per month (equivalent to 1,140 dollars in the period studied), as family income per person in September 1999.

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