Minimum wage, social security benefits and low-income families

Abstract

This article discusses families with per capita income of up to ¼ of the minimum monthly wage in Brazil. The conditions of participation in the labor market and the influence of social security benefits on the pattern of income earned are analyzed. The concern, therefore, is with the importance of social security benefits in attenuating the fragility of the income of these families and the consequences of the gap between their income and the minimum wage for this pattern of income. Characteristics of the members of low-income families showed that, in view of the structural changes in the production process and the current juncture of the Brazilian economy, persons of active working age lack the pre-requisites for participating with dignity in the world of labor. A study of the composition of the income of the poorest families shows that the income of inactive members (retired persons and pension receivers) is essential in preventing these families from falling below the poverty line. The profile of the members of such families is analyzed on the basis of microdata from the National Household Survey by Sample (PNAD/IBGE) of 2004, according to age, educational level, color or ethnic group, and participation in the labor market, strictly speaking. Factors studied include the type of work exercised and the position in the occupation. The comparison of the profile of members of the poorest families with that of all families shows that the income of retired members and pension receivers are essential not only in reducing the fall in inequality, but basically in reducing poverty itself.