Understanding how the poor deal with the effects of the economic crisis into which Brazil plunged in 2014 was the aim of the research project "The crisis seen from the periphery: struggle for social mobility in the frontiers of (i)legality" conducted by Leonardo de Oliveira Fontes. An article published in the International Journal of Urban and Regional Research is one of the results of the investigation.
Fontes is currently a professor in the Department of Sociology at the State University of Campinas (UNICAMP) in São Paulo state and a researcher in Urban Ethnography at CEBRAP, a think tank based in São Paulo City.
"Throughout the study, 'entrepreneurship' appeared as one of the main strategies used by members of poor communities to participate in the economy in the context of the crisis. This finding, which I obtained via a qualitative survey, was corroborated by quantitative data. A survey conducted in 2021 by the Global Entrepreneurship Monitor (GEM) showed that 50 million Brazilians who did not yet own a business would like to start one in the next three years. That number was 75% more than in 2020," Fontes said.
The number was attributed mainly to the economic crisis, aggravated by the COVID-19 pandemic, and at least partly expressed the lack of a better alternative, since the average monthly income of informal workers had fallen from about BRL 2,200 in 2014 to BRL 1,991 in 2022. This compares with an average of BRL 2,472 per month for formal workers in 2022.
The outlying suburbs of big cities in Brazil are inhabited by low-income families and known as the periferia (periphery).
The entrepreneurs surveyed can be divided into two groups, according to Fontes: those who work entirely in the informal economy, and those who join the formal economy by registering as "individual micro-entrepreneurs" (microempreendedores individuais, or MEIs), a type of sole proprietorship with a simplified tax regime for self-employed workers earning up to BRL 81,000 (now about USD 16,300) per year.
José Tadeu Arantes
phys.org