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Minimum wage = coffee + bread

January 21, 2010

Since the first day of the year, the Brazilian minimum wage is 510 reais (the equivalent of 283 dollars or 201 euros). Why 510 and not 500 or 520? Is this enough for a minimally descent life?
Today I got a fascinating (and simple) explanation on how the government might have come up with this number  from Brazilian blog Vida Depois dos 50. It quotes Pasquim, a satirical newspaper from Rio that fought conservatism and dictatorship in the 70s. The guys of Pasquim found some forty years ago the  formula that explained (tragicomically)  how the value of the minimum wage was established. A formula that is still valid today.
According to Pasquim, at that time:
  • one cafézinho ( a shot of coffee, no milk) cost 0.12 cruzeiro (the currency in the rocking seventies)
  • one pão francês (the little bread Brazilians have for breakfast) was 0.04 cruzeiro
  • If you had the combination of one cafézinho and one pãozinho four times a day, your minimal needs would have been met
  • One family had in average four people
  • One month has 30 days.

So: 30 X 4 X 4 X (0.12+0.04) = 76.80 cruzeiros = minimum wage

In other words: a family of four needed this amount to pay for this diet for one month. And that was exactly the value of the minimum monthly salary at the time.

Are you still with me?

Well, Vida Depois dos 50 updated this calculation. Today:

  • one cafézinho is  0.75 real
  • one pão francês is 0.30 real
  • The other factors remain the same.

So: 30 X 4 X 4 X (0.75 + 0.30) = 504 reais, which is practically identical to the value of the minimum wage today.

How fascinating is that? If you keep that diet, don’t pay rent, don’t use any type of transportation, don’t send your kids to school, don’t ever have leisure, Brazilian minimal wage is perfect for you!
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3 comments

  1. I have always wondered how they came up with the minimum wage figure..this is so horrible it has to be true….I hope the family of four enjoyed eating it at night in the dark as they can’t afford electricity.


  2. And for those middle and upper classes who complain, this is why people live in favelas. As long a person receives little money, where else can they live?


  3. This is a classic case of institutionalized poverty. There has to be greater commitment from the upper classes and government to spread wealth and opportunity.



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