How does minimum wage affect the crime rate in Brazil?
By Stephanye Schäfer
From Palmela, Portugal
Since 2014, Brazil has been experiencing a severe economic crisis, in which the country’s gross domestic product fell by 3.5% and 3.3% in 2015 and 2016, respectively. For almost 4 years, there was a small economic recovery, until 2020 when the pandemic began and again impacted the economy. The prices in Brazil are very high and are concerning the citizens- the minimum wage is 1100 reais, which is approximately 210 dollars. To compare, the minimum wage of the USA in most states is 1257 dollars, which corresponds to almost 7000 reais. Now you might think that in the US, the cost of living is way more expensive than that of the average citizen living in brazil. Not quite. The cost of living in Brazil has actively increased since the pandemic, whereas the gas to fuel your car is 6 reais, while in the US is 0.95 dollars, which corresponds to 5.3 reais, which is even cheaper than in Brazil.
As the minimum wage is low and the needs are expensive in comparison, crime rates will consequently be high. Brazil has the seventh-highest crime rate in the whole world, especially in the favelas, which is a shantytown located within or on the outskirts of the country’s large cities, where people don’t pay taxes. Knowing that the minimum wage is low, people in this category start stealing and robbing the ‘richer’ ones out of no choice to provide for themselves and their families. This is not the only reason for the crime, of course, but studies say that if the minimum wage of Brazil was half of the minimum wage of a US citizen, Brazil could be one of the best countries to live economically, and the crime rate would significantly drop. Brazil also had very high inflation, and one of the major reasons for it is its relatively closed economy- export and import share to GDP is only 20‰. Lack of trade means that prices need to react more strongly to internal supply shocks.
At the moment, the Brazilian economy is very unstable, due to government intervention in economic activities and a high inflation rate. If the country wants to decrease its crime rate, it should consider the following factors. Lower the price of the needs of the products, so they can do their basic everyday activities and provide enough food for their families without any economic struggle. The government should also highly consider increasing the the minimum wage. The governments could also charge no taxes or lower them for people that receive a certain amount per year, or even provide the basic needs at a low cost. The country should include and, most importantly, think about its security on economically poor people, for example, a higher better workforce in the military or police department. The government has been ignoring this for so long and has not focused on changing the situation, which makes the crime rate grow.
To conclude, the minimum wage and the crime rate of Brazil are definitely strongly positively correlated with each other. The best way to overcome this problem is by changing the government and the workforce to improve this economic problem. The gap between the rich and poor is always increasing, which means the poor people get poorer, and wealthy people get wealthier. Such creates social pressure between the groups, leading to a higher crime rate between them. The minimum wage has to increase to decrease the crime rate of the country.