EMERGENCY PROGRAMS AND PANDEMIC: IMPACTS ON THE MASS OF INCOME AND INEQUALITY IN BRAZIL FROM A MACRO-REGIONAL PERSPECTIVE1

Abstract

Based on a macroregional approach, this article aims at examining the potential impacts of the pandemic and the emergency monetary payments proposed by the government on income inequality in Brazil. It also highlights the central role that social policies play in supporting families' income in crisis times. Combining a new virus of rapid transmission, the lack of an effective drug or vaccine, and overwhelmed health systems, the global health crisis adds another layer of economic and social hardship in the form of social distancing measures. Although necessary, the latter have negatively impacted economic activity, causing a crisis in supply (the paralysis and/or strong reduction in companies' activity) and demand (the significant losses of the working class, which saw their jobs and income abruptly plummet). Despite being impacted by the sharp drop in revenue and increased health expenditures, governments worldwide have put in place emergency programs that simultaneously try to save the jobs and income of the most vulnerable workers and populations and financially support companies. In Brazil, emergency programs have focused on preserving jobs and income aimed at mitigating the losses of formal and informal workers. However, how they were thought, their insufficiency, the delay in their implementation, and their bureaucratic obstacles caused significant losses to the employment and income of the population. Using IBGE data, I suggest two potential fallouts of the current emergency programs: 1) the greater concentration of people at the base of the income structure and their relatively lower average income will reduce the impact to the poorer macro-regions, given the reach and the value of the proposed aid; and 2) the monetary payments will improve the income distribution at the expense of workers in the middle and upper strata of the distribution.