The new middle class families return to the bottom of the pyramid

Between 2014 and 2018, from 5,210,000 Brazilian families should leave the class C towards the base of the social pyramid, due mostly to unfavourable framework of low-skill workers, reversing the expansion of the new middle class in recent years. The estimate is the Consulting Trends, which sees no space for consumption back to pull the GDP growth.
"Class C will be featured? We don''t think in the near term, "says the Director of industry and market intelligence analysis of Trends, Adriano Pitoli, author of the study. The shrinkage of the new middle class would reverse the process of social mobility that lasted until recently. Between 2006 and 2013, according to the study, 3,870,000 of families left the classes D and e into the new middle class in the wake of the boom in consumption and income.
Pitoli assigns the class C decline not only the worsening unemployment, but also to a change in economic dynamics. "The adjustment of the minimum wage and the impact of the Family were important, but the main factor was the economic dynamics of the sectors of services and pulling GDP consumption. Are sectors that employ lower labor qualifications, "he explains. "With the acute crisis, there are sectors suffering proportionally more than the GDP. The crisis is affecting more workers in low-skill. "
Unemployment is greater in that range due to the higher cost to fire, rehire and qualify workers more prepared. In the medium term, believes Pitoli, there is no room for the consumption of goods and services pull the expansion of GDP, which would last until 2020. "We are watching the phenomenon of ex-new class C," he says.
Survey of Depec (Department of research and economic studies) of Bradesco also points to shrinkage of class C, that cycle must still get worse over the next year.
Based on data from Pnad, Ana Maria Bonomi, Barufi of Depec, calculates that 72,000,000 Brazilians were part of the classes D and e at the end of the first quarter of this year. At the end of 2015, the estimated number was out of 70,600,000. At the end of 2014, the D and e segments amounted to 65,500,000 people. "More than ever the social protection system will be relevant in the country", says Ana Maria.