Brazil: The Cautionary Tale

from somewhere you didn't notice he was lying. He starts sparking, then darting around, seemingly away from whatever danger he senses, but also maybe towards it. To the viewer. At first, it's funny because it looks like he's trying to scare the wind. But then a few seconds later, everything in the room starts moving, televisions fall over, lamps, wobble, painting, swim. But the dogs are reacting to our pea waves, the

earliest signs of an earthquake. Humans can't hear them. Sometimes we feel them as a jolt, but they sound an alarming signal to dogs and some other animals up to a minute or two before the bigger waves come and the damage begins. There's another thing I learned about earthquakes. The fault lines, the cracks in the earth whose movement caused the shaking. Each one has an upper limit to

its potency, determined by its length and depth. In other words, the existing fractures are what determined how bad the event will ultimately be. The pandemic, in so many ways, has felt like an earthquake to me. It was an event that we all felt, but not equally. There were existing fault lines. Some economies had programs that people could depend on when their jobs suddenly disappeared because of lockdowns. Others didn't.

Some health care systems were already dealing with doctor and nurse shortages going into a pandemic that would sap the last bit of their resources. Others didn't. And in some countries workers had few protections like paid time off if they caught the virus, others didn't. As soon as the impact hit in early we knew where those fault lines were and saw the damage immediately and death's, job losses

and so many other ways. And it's only now that some of the dust from the initial hit has settled that we're able to see what we're left with Jovis claims coming in, I mean really jumping from the week before pretty brutal. Three point to a million records. Six point six million Americans filed for unemployment last week. Many Brazilians lost their jobs during lockdowns. While prices for rent, food, and gas are on the rise, engine working women were

the worst impacted by the pandemic. Well now to the billionaire boom. According to Bloomberg's super yacht charters are up. Over three hundred and a billionaire was created every twenty six hours during this pandemic. No, I'm not waiting in line for a COVID test with the public. The gross in his time for a wealth tax in America. Welcome to the paycheck. I'm Rebecca Greenfield. It's not often that a crisis heads the entire world. The effects of war

and famine and natural disasters canry far and wide. COVID was different because it happened everywhere. But over the last two years we've seen how a million different variables, or those fault lines, determined our health, safety, and economic security. People with the fewest resources were more likely to die, especially in the earliest waves, and then poorer countries had less access to life saving vaccines. Then there were the economic disparities. Millions of people are at risk of hunger

because of the COVID nineteen pandemic. Even in the US and Europe, more and more individuals are relying on food handouts just to get by. With unemployment levels sloring, international organizations expect the income gap between the richest and the poorest to get even wider. The fear early on in the pandemic was that we'd come out of this crisis worse off. It felt almost inevitable. But that's not exactly

how things played out over the last few years. In fact, what happened varied widely depending on how governments and society has stepped in to address the crisis and what kinds of foundations they had. Going in over the next eight weeks, we're going to seven different countries to see how this world changing event shifted the balance between the very richest and the very poorest and everyone in between. Even before the pandemic, alarm bells had been going off about global inequality.

Places with greater relative equality are more stable, They provide people with economic security and more mobility to better their lives, and going into the pandemic. Some of the most equal places in the world, like the US and European countries, we're moving in the wrong direction. So when COVID rattled the global economy, economists and policymakers were worried about what might happen. So it happened. I decided to ask Ben

Steve Verman. He's a reporter at Bloomberg who covers wealth inequality, spending his days deepen data and talking with experts and economists. He's been keeping a close eye unwealth inequality during the pandemic. Right before the pandemic hit. What direction was wealth inequality headed in globally coming into the pandemic. There were several trends that we were watching. There were a few positive trends. There was a growth of the middle class in Asian countries,

especially China that overall reduced inequality worldwide. And then you had the number of people living in extreme poverty had actually fallen. So those were positive trends, but there was some concern that they were running out of steam, and we had these negative trends that we're making inequality worse. In the developed countries like the United States, middle class was not doing as well and then you also had not just the top one percent. Really it's the top

point one percent or point one percent. The people the very top were doing much better than every one else. And really there was a lot of concern about the amount of power and wealth that folks at the top had. So we were wondering would those trends continue, And there was a lot of pessimism that basically a recession would come along and it would hurt the middle class and the wealthy would benefit. Okay, so then March economy is

basically shut down entirely. It sounds like economists and politicians and policymakers they would all think it's definitely gonna get worse. There was a lot of pessimism at that early moment in in the pandemic, and I ended up writing about this and researching some of the history, and what I found was that when you have these major disruptions, if you look at past pandemics, for example, inequality doesn't always

get worse. Sometimes it gets better. Sometimes these disruptions either they can destroy a lot of wealth at the top and then allow people at the bottom to rise up. Or it can change the labor market, it can change the financial market in these really surprising ways. So I didn't think at that moment we really knew what was going to happen. We were really entering into an unpredictable situation. So of those two potential scenarios, thanks getting worse or

something surprising happening, what ended up happening. We're only just starting to get the data to answer that question. What we do know from the last two years is that the billionaires and the top one percent have done very very well. The world's five richest people gained about one

point seven trillion dollars over a couple of years. If you just look at Elon Musk, for example, there was a moment after he became the richest man in the world where he was worth more than three hundred billion dollars, and there was a lot of chatter at the time that he might have a chance to become a trillionaire.

At the same time, governments, at least in the United States and the EU had more of a sense that we need to spread the relief, and so people at the bottom got a fair amount in terms of stimulus payments, extra unemployment checks, and enhanced child text credit that was introduced in the United States, and so if you actually look at the bottom fifty percent or so, their wealth

has actually gone up quite a bit. It's basically doubled in the last two years in terms of dollar amount, and it's still a tiny share of total US wealth, but their share has been growing. And we don't know how long this is going to last as inflation comes along here, inflation could actually just completely erase all these games in the next few years. We'll see, But for now, there's some signs that the poorest Americans sort of the working class you could say, and the bottom fifty of

the country have done pretty well. Considering so that sounds like a pretty US or maybe Western Europe focused story. How did it play out in other countries that were maybe starting from different places of an equality. Well, not every place had the resources to give a big bail out. Not everyone can afford to trillions and trillions of hours of stimulus, So different countries made different policy choices and that ended up influencing the economy and how those countries

went through the pandemic. Another issue there is COVID and how how countries managed COVID and how much either lockdowns or the virus itself disrupted their economy. Some were in lockdown for really long periods of time, and both of those things, the stimulus and managing the virus, ended up

having disparate impacts depending on where you lived. If you look at Taiwan, which really managed the virus quite well, its economy actually grew in unlike most of the world, and it actually grew faster than Somehow, US economy of course shrank in. But then if you look down at Peru, which had pretty severe lockdowns and it was really impacted by the virus, Peru's economy shrank more than eleven percent in one of the biggest drops in GDP in the world.

If you look at it, it's really country by country. Again, we're still getting the data. We don't know exactly where this is all going to end up. But one area I'm really interested in is South America and Latin America. Why is Latin America so interesting too? Before the pandemic, we had a situation where inequality was getting worse than a lot of Western countries. One of the questions we

had was where is this all headed. If you look at Latin America, these are middle income countries and they have a level of an equality that is about the same as Sub Saharan Africa, places that are much much poorer. So you have a situation where in Brazil, for example, you have almost half the wealth of the country is owned by the top one percent. In the United States, it's about a third. But the question was, are the US and other rich countries on the way to that

same kind of level of inequality? Are we going to also maybe have the same kind of extreme polity x and extreme gaps in society they seem to go along with high inequality. So it's basically a cautionary tale. Ben mentioned Brazil. It's one of the most unequal countries in one of the most unequal regions in the world. So that's the first place we're going this season, specifically to Brazilia. It's the capital and it also happens to be the

most unequal place in the country. My colleague Shannon Sims, an editor at Bloomberg, lives there and is giving us the view on the ground. Well, I first moved to Brazil back in two thousand and twelve. When I got here, it felt like a totally different country. There was a sense at that time that the middle class called classes was completely booming, So families were booking Disney World vacations, and they were investing in real estate, they were opening

new businesses. In two thousand nine, the Economist magazine published an iconic cover story that showed the famous Christ the Redeemer statute taking off like a rocket, and the headline read, Brazil takes off Latin America's success story. By two thousand fifteen, things had already started moving in the other direction. Growth was slowing down, the currency was hurting, and then the

pandemic hit, and it hit really hard. More than six hundred and fifty thousand people here have died so far, but the impact on the daily lives of braziliance has also been really startling. There are lots of things I could point to to show how bad things are, like how the Hayal plunged in value almost overnight in March, and how Brazilians have loaded up on debt that they can't keep up with. The average credit card interest rate

here has hit almost three hundred and fifty. But there's one big, big group of people who we don't often hear about and who have had it particularly bad during the pandemic, single moms. Ever since I moved to Brazil, I've been struck by the number of single mothers here. Current estimates suggest that there could be as many as twenty million single moms in Brazil. That's close to the

entire population of Australia. The trend is only increasing. The number of birth certificates registered without a father jumped by about over the past year, which indicates the group is growing. Before COVID, single mom has already had it tough with trying to sort out childcare, taking unpaying fathers to court, commuting to jobs they were lucky to have in a tough market. They seem like they were barely hanging on

in a precarious position, almost like an underclass. COVID, it seemed, would have only made their struggle harder and only widened the distance between their reality and how they'd like their lives to be. So to better understand just how these women are managing in the wake of COVID, I followed one woman, a thirty five year old mother of two named Hanata, through her day, which starts before dawn at five am. It's still dark when I pull up to

Hanata's house. She's opening the gate for me and immediately starts blurting out how she's grappling with a dilemma already. Clusion. Today, we got a problem. My kids will go to school this morning. There's going to be a teachers strike, so they won't go. Teachers are striking for better pay here and some Umbaya, a working class satellite city on the

outskirts of Brazilia. So rather than drop her kids off at school on the way to work like she normally would, she's happy to set up Plan B. They'll stay at home until they walk alone to their after school programs. Fourteen year old Juan is learning trombone and nine year old Hailani likes dance and Notaza rummages through their backpacks, checking to make sure they have what they need for the day. As they stir in their beds, she wishes

them a good morning. Oh. As she gets ready for work, she makes sure to leave some dinner on the stove as well. That's because she won't get back before nine pm tonight, hopefully in time to pull up the covers on her kids as they get in bed, but maybe not, and not to course coffee from a brown thermis. As she eyes the time on her phone, she's got to be out the door when her alarm rings in about

five minutes. She works from seven thirty to five thirty every day and a big glass government building in the heart of Brazilia a forty five minute drive away. She's called a colpea, a cup lady, and she serves little sugary cups of coffee to government officials all day long. The people in suits who drink her coffee are the same officials making the kinds of decisions that can change the lives of Hanata and other single moms overnight women who are just trying to figure out how to get

by in the wake of the pandemic. Despite their numbers, single mothers are also one of the segments of the population that most often get left behind. The National Statistics Agency here reports that sixty three percent of households led by single moms are living below the poverty line. For those living above the poverty line, like Hanata, the unforeseen arrival of the pandemic and now it's economic fallout are

threatening to pull her under. To avoid that plummet, she's had to pivot, and so she is piled on top of her regular coffee lady job. A hodgepodge assortment of side hustles, jobs that are what economists might call part of the gig economy. As a pandemic has worn on, she's added more and more, and so now there's hardly a minute in her day when she's not workings. Fessile me the SA could think only time to get out the door. Hanata says COVID has turned her life upside down.

She said she's been backed into taking on these extra jobs just to keep pace with the cost of living. As she darts around the house, quickly packing up for the day, she tells me how she's battling to keep above the welfare line because she doesn't want her family's finances left to the whims of government assistance. In just the past year, consumer prices have risen more than ten percent here, and the most recent inflation forecasts show that

trend's only going to get worse. Nowhere has been spared by the economic impact of COVID, but in brazz Ill, the shutdowns disruption to the supply chain was compounded by extreme drought conditions that ruined crops last year, and that was before Brusha's invasion of Ukraine made everything worse the result, the price of a tomato doubled over a period of months,

along with so many other staples. The value of the local currency started evaporating amid all the turmoil, and soon and not that went from serving fresh salads to her kids to not being able to afford anything beyond rice and beans. Nya sena sini fister doesn't size, they say, saints it since basic bacasco guys gazolin the basics. Today you can't. It's six hundred seven hund the highs, the basics,

the most basic of the basics. So the cost of living through Brazilians due to COVID, due to the war, due to everything that's happening, the cost of living increased a lot. Really you a lot? No. I mean, it's not impossible to manage as a single mom, but it is complicated. As we get into her car, I noticed the gas gage shows that we have less than a quarter tank. It seems a little low for us to get all the way into the city. I don't know,

as Scotts. Now we're going to pick up Dona Halsa and she's a warrior woman to you know, to make a little extra cash. One of Hanata's side hustles is driving a woman named Dona Josa for a flat feed. Hanata met her when she ubered her home one night, and as it would turn out, Donal Hols is a single mom, herself a mask that a hole. It's been years that I get up at four am. It's been

years I raised my kids and this ridom. Hanata, who still has her eye on the time, instructs Dona Halsa to put on her seatbelt as Halsa hands her thirty hay eyes. Dona host is a small woman in her sixties from the northern Brazilian state of It's one of the poorest in the country and the kind of hot, desperate place where they say only the strong survive. Dona Holsa carries that battle faced spirit with her. I'm from

I got here in seventy five. When we got here, we would roll up our sleeves and get to work. She raised her children on her own, but as she tells me, things are worse today than she's ever seen them. Hosa works as a housekeeper and one of the richer neighborhoods of Brazilia called where organic grocery stores and cocktail bars and fancy playgrounds for the kids line the blocks.

She's worked for the same family for more than five years, but since COVID began, they cut back her days from five to two per week, so she used to make seven hundred and fifty eyes per week. Now she's paid three d And there's a big catch. They told her they don't want her taking the bus because she'll have too much exposure to the virus and can bring it into their house. That way, if she wants to keep working, she has to take an uber and she has to

pay for it. As a result, the cost of her daily commute increased tenfold, and Haulsa is not happy about it. Last last, she should be paying part of my fair I think she had the obligation to pay, don't you think? But no, I pay with the tiny bit that I learned. Hanata and Paulsa dive into a heated conversation about how COVID has underlined inequality here, I no sabe somewhere LETI rich thing that COVID only comes from poor people. So I'm not gonna let the cleaning woman come because she

could bring it to me. But they don't think about the fact that the people who actually bring the virus are those who travel around everywhere will take plane to go to other countries. We'll just stay in our little world. We just go downtown, back home, downtown, back home. We don't leave the house. The fact that rich employers view people like Hanata and Donna Haza as the source of infection is especially going to Hanata because of how the

outbreak happened here. At the beginning of the pandemic, there was a major super spreader event a luxury beach resort called Frangozo. It put on display how the wealth He's jet setting lifestyle was contributing to the outbreak. Meanwhile, Hanata has never traveled outside of the city. In fact, she's only able to travel as far as her gas tank can take her. We pull up to the gas station and Hanna to ask the attendant for thirty he eyes

worth the gas. I realized the thirty hey eyes Josa gave her earlier is the exact amount Hanata needs to get them into Brazilia this morning, and not just constantly on the hunt for cheap fuel, which is getting harder to find. Petro Bras, the state oil giant, increased prices

by nearly in mid March. Now Brazil has some of the most expensive gas in the world, and since she can only afford a little bit at a time, she has developed this finely tuned sense of exactly how much she'll need in the tank to get her to the next destination before the cardpt have meals she has, but COVID it has gotten worse. We could buy things then that we can only buy now. Working double the hours because the price of everything increased also jumps out America.

Just watch what happens when I go to the grocery store. I can't even buy a killo off chicken compan It's complicated. This is the reality for Brazilians, a choke hold. Every day. Hanata drops Holsa off and heads to the government ministry. Ten hours later, I meet her as she's getting out. Why as she's walking to her car, I asked her how her day went, But I noticed her mood has shifted. When I left her at work, she was a chipper. Now she seems like she's forcing a smile, and I

soon discover she's actually furious. One alone, just get out of his front of the face. I'm going to send an audio message and let's see if to answer me. Because the son of the owner is ignoring me. He is ignoring all of us. I've got to call quickly because the office is about to close. She sits down on the driver's seat and almost immediately starts sending a firm but polite voice note to her former employer. The company owes her seventy eyes. That is week's overdue for Hanata.

That's a month and a half pay missing from her bank account. It's not the only problem she's dealing with. She's also taking the father of one of her kids to court for not paying child support, money she desperately needs. And throughout the day she's had to be checking in on her kids because they're home alone. But she doesn't have time to worry about all that now, not when she could be making money driving Uber her new pandemic job. She's got four to six more hours of work ahead

of her. What did Let's go ahead and turn on the app. Let's work and make some money. Hanata had never considered driving an uber before until the pandemic made it necessary. She needed a quick way to start making money to keep up with a surge and costs of food.

A friend suggested buying a car and paying it off by driving Uber, except now costs of increase even higher than she imagined, So she's locked into having to drive Uber as much as she possibly can, and so she can barely hold her eyes open just to not fall behind on her carpet at it. Sometimes I leave work and say I'm not going to drive today because I am not in the right head space. But then I think I will have to drive around because I've got

this carnet and everything else to pay. She starts to pull up to a gas station, but sees the price and swerves back one of the road. Did she about the second month geez for already increased the price of gas? Shoot, I'm not going to fill up here. Riding around all day made me realize she'd been holding her life together by a thread, and then COVID came and took all these tenuous situations and just stretched her to the breaking point.

Things were never ze for Hanata. And then COVID came along and threatened to snap all of those fragile strings that Hanata was tying together. Job market disruptions from shutdowns and supply chain breakdowns that led to inflation. It all meant that Hanata's options for work got smaller, even while she had to work more and more to keep up

with prices. In the aftermath of the pandemic, Hanata is facing down economic forces that are too much for even a self described geheira or warrior woman, and not as a hustler. But she's working to her max. And she's just one woman, just one mom, in a place where there are twenty million like her, each of them just trying to sort out a way to get by in this new, harsh, increasingly unequal world. It's starting to get dark out and she's running low on gas as always.

Let me see how much it is here. Oh my god, it's going up everywhere. Just because the government said they're going to lower the price of gasoline. They say the station increased the price of gasoline. There's really screwing us. During Hanata's Uber shift, she drives from Asasul to Asanoichi, from one nice neighborhood to another, bringing people home from work to their families. She tells me how driving uber gives her a unique window and to other people's lives.

She says she sees people Austin showing off every weekend. Maybe says it's a trip on the yacht or drinks or women or drugs. Meanwhile, a lot of people are experiencing hunger. Inequality is on her mind that she goes from one ride to the next. Stine vivan Pi Social East. No, capitalist in equality is enormous. We don't live in a socialist country. We live in a capitalist country where the rich would always be on top and the lower class

will be at the bottom of the well. Her uber rights also make her think about her own life in limitations on the open back downing Elias, that's a suging Ways school. Yesterday I went to pick up a young person at one of those English language schools in the South Zone, and I thought, Wow, my daughter is never going to be able to attend a school like this

with the money I make. I looked it up. A year of tuition at that school cost more than fourteen tho US dollars per year, and not just total income is less than half that. My fast we think, don't The photoco was mostly if there are days when I'm totally wiped out because I have three jobs and I have my kids and run the household, and I can't disappoint.

She continues driving along the way. She passes the modern monuments, the hulking shopping malls, the Congress Building, and the Presidential Palace. If she's lucky, she drives across one of Brazilia's postcard bridges at sunset. I was seeing something I like a lot as well. It's when I passed by the side of the lake. I always stopped to look at the horizon over the water and thank God. No that. Oh, she's arriving home at nine thirty pm tonight, But she

could work longer. If she does eleven more rides, she'd get a hundred and twenty he eyes of incentive bay about US dollars today, though she makes the tough choice to forego that money so she can see her kids before they go to sleep. Yeah, she gets home and they have a family dinner, a late one. After she sends them to wash up and get ready for bed, she does the dishes and sets the alarm for five am.

The pandemics toll on Brazil and people like Hannada is the worst case scenario, a widening divide between the rich and everyone else, which has made daily life a struggle

for many people. But there's another issue. Something then and I talked about the real question is is there sort of a natural spot that inequality heads a capitalist society, Like over time, do we naturally become more and more unequal up to a certain level until something comes along and stops it, or can we do things policy things that will prevent inequality from getting to that point or from or reverse it so that without having a revolution, Like it would be nice if we could have a

more equal society without having the kind of disruption that World War Two, for example, brought along, or or the pandemics of the Middle Ages brought along. Next week on the Paycheck, we had to be part of the world where wealth and equality actually reversed. For one simple reason, poor and low income people got a lot of no strings attached cash. The first emotion I feel, I remember it was like almost disbelief, like me I got, like my name never gets Thanks for listening to The Paycheck.

If you like our show, please how to over to Apple Podcasts or We're where you listen to rate, review and subscribe. This episode was hosted by Me Rebecca Greenfield and reported by Me, Shannon Sims, and Ben Steve Verman. It was edited by Francesca Levi with help from Janet Paskin, Rocksheeta Saluja and Me. We also had editing help from Daniel Balby, Shelley Banjo, Kristin V. Brown, Nicole Flato, Gilda

to Carly, Elissa McDonald, and Kai Schultz. This episode was produced by Gilda to Carly and sound engineered by Matt kim Our. Original music is by Leo Sidrin. The voiceovers you heard were by Camilla Fontana and Isadora Colombi. Special thanks to Magnus Hendrickson, Mckinninda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Diallo. Francesca Levi is Bloomberg's head of Podcasts. See you next week.