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Study Addresses the Impact of Small Entrepreneurs on the Expansion of the Middle Class

The third edition of the “Voices of the New Middle Class” that was launched last Monday analyzes the contribution of the entrepreneurial middle class to efforts for poverty reduction

Vozes da Classe Media PR

Brasília – 3 May 2013

In recent years, nearly 40 million Brazilians have been incorporated into the middle class – those with a per capita income between R $ 291 and R $ 1,019 – a segment that now accounts for more than half of the country’s workers. This new configuration of the population brings a new dynamic to the economy and has direct effects on the socio-political relations of Brazil.

To better understand this phenomenon, the United Nations Development Programme in partnership with the Caixa Economica Federal and Strategic Affairs Secretariat (SAE) developed the publication “Voices of the New Middle Class.” This publication consists of bimonthly studies with information on the development, values, behavior and aspirations of the Brazilian middle class to subsidize the formulation of public policies directed to the sector.

The third edition of the publication, launched last Monday the 29th, seeks to understand the entrepreneurial side of this portion of the population, with the theme “Entrepreneurship and the Middle Class.” The study focuses on the contribution of small entrepreneurs to the expansion and rise of the Brazilian middle class.

The following findings are highlighted in the publication and lead to the conclusion that progress is being made towards a more equitable society:

  • Increase in available jobs
  • Growth of the Brazilian working class
  • Decrease in the income gap between employees in small enterprises and their employers

During the launch of the publication, the UNDP presented the results of the analysis about the profits of individual entrepreneurs and microentrepreneurs; wages of people employed in small businesses; rents divided by their families; risks and opportunities for social mobility, experienced according to their characteristics and profile of their enterprises. Small entrepreneurs, for example, account for 39% of total remuneration in the country, which exceeds R $ 500 billion. The study also points out the importance of small enterprises in the formal labor market and for sustainability. According to Marcelo Neri,  Interim Chief Minister of the Strategic Affairs Secretariat (SAE) of the Presidency of the Republic of Brazil and the President of the Institute of Applied Economic Research (IPEA), the fuel behind the expansion of the middle class is not domestic consumption but rather the creation of job opportunities: “the great symbol of the new middle class is the ‘Portfolio of Work’ and labor rights.” The business of subsistence, in the words of Marcelo Neri, are being exchanged for formal jobs and businesses with greater potential for accumulation and growth. Of the six million jobs created by small business ventures between 2001 and 2011, 95% were formal.

Jorge Chediek, UNDP Resident Representative and Coordinator of the UN System in Brazil, argued that this middle class, fortunately, is rising, but it may become stagnant and even return to poverty. Therefore, according Chediek, the project’s goal is to “know the expectations, the vision of the middle class, not only through the studies generated from outside, but also through their views.” Chediek emphasizes that academic studies conducted with the middle class in Brazil should serve as an example for other developing countries, so that we can achieve “a global middle class.”

The third edition of “Voices of the Middle Class” is available here.

The video of the conference proceedings is available here.

Source: UNDP

Short URL: http://pressroom.ipc-undp.org/?p=14366

Posted by on May 4 2013. Filed under Humanizing Development, Inclusive Growth, Inclusive Growth around the world, News, Partners, Social Protection, Thematic Areas. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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