General Info

[Exec Talent]

I didn't miss your point. Your analysis applies to one segment of the public transit users. The transit fare increase applies to every use of the system. It is not limited to the daily commute for Petrobras and Banco do Brasil employees. It applies to all commuters, even the self-employed, the unemployed and the un-subsidized students. It applies to the shopping trip, the trip to the medico, all transit travel. It is but a single element in the grievances of the demonstrators. Otherwise they would have laid down their placards when the increase was rescinded. Inflation is currently in excess of 6 percent. The demonstrations are rooted in the bad economy, corruption, fiscal waste and incompetence of the government.

Seems the Brazilians are at least gaining the world's attention. Hopefully the protests will result in some positive changes. Lifelong bureaucrats are a drain on every economy. The problem is even after they retire they still are taking money from the pockets of the working man.

[Poucolouco]

You missed my point, or perhaps I did not explain it well. The deduction (currently a flat 6% or 7%) of the employees salary also likely will go up. So the employee will not get a free ride where their flat deduction stays the same (the money the company deducts from each paycheck in exchange for the VT) , but the company pays them R$0. 20 more per trip.

Your other point about pass-through is correct (where possible) and I have no argument with it. Of course for start-up companies with no revenue, the pass-through is harder.

I didn't miss your point. Your analysis applies to one segment of the public transit users. The transit fare increase applies to every use of the system. It is not limited to the daily commute for Petrobras and Banco do Brasil employees. It applies to all commuters, even the self-employed, the unemployed and the un-subsidized students. It applies to the shopping trip, the trip to the medico, all transit travel. It is but a single element in the grievances of the demonstrators. Otherwise they would have laid down their placards when the increase was rescinded. Inflation is currently in excess of 6 percent. The demonstrations are rooted in the bad economy, corruption, fiscal waste and incompetence of the government.

[Eric Cartman]

You should run it by your Economics professor, it's called cost pass through. The companies will not eat the increase. They pass it on to their customers by raising prices. Thus it contributes to inflation, which is one of the basic grievances of the demonstrators.

You missed my point, or perhaps I did not explain it well. The deduction (currently a flat 6% or 7%) of the employees salary also likely will go up. So the employee will not get a free ride where their flat deduction stays the same (the money the company deducts from each paycheck in exchange for the VT) , but the company pays them R$0. 20 more per trip.

Your other point about pass-through is correct (where possible) and I have no argument with it. Of course for start-up companies with no revenue, the pass-through is harder.

[Bravo]

Now that the bus fare will not increase 20 cents, I wonder if people will continue to protest in order to accomplish the other things they want done in Brasil. It took 1 week, hundreds of thousands of people in the streets and international news media before they finally agreed not to increase the tariff. I can only imagine how long it would take to accomplish something like having better hospitals and schools.

[Phunluv]

You should run it by your Economics professor, it's called cost pass through. The companies will not eat the increase. They pass it on to their customers by raising prices. Thus it contributes to inflation, which is one of the basic grievances of the demonstrators.

Yes, that's exactly it, someone has to end up paying. I suspect another factor at play here with the intensity of the protests is that these fares have been inching up in recent years but the transportation is as bad as ever, if not slightly worse than normal.

You can argue it's always been this way in Brazil but there's a different dynamic here because the World Cup and Olympics is like a big party Brazil is throwing for the rest of the world, trying to present a positive forward image, and the natives know it's kind of a facade.

Also the "Brazil Boom" of recent years is over. GDP growth was pretty flat this past year yet inflation remains high. I suspect if there wasn't so much money being pumped in to prep for the World Cup & Olympics, Brazil would actually be in a mild recession right now; you could even call it mild "stagflation" although it's hard to tease out just how much of the inflation is caused by all the spending on the big upcoming sporting events. My point is, even mild stagflation sucks (remember the 70's?) and so it's understandable that the natives are getting a bit restless.

[Poucolouco]

You get a flat % deduction of your salary, might be 6% or 7, and then the employer has to cover the full cost of your daily transport.

So if you make, say, R$1000 per month but have R$20 / day (R$10 each way) of buses / ferries / etc, you come out ahead.

Deduction: R$70 deducted from your paycheck (7%)

Employer VT: R$20 * 20 work days / mo (or whatever) = $400 in Vale Transporte (the transport benefit)

It breaks down when you earn a high salary, which is why nobody making, say, more than R$5000 per month takes the VT benefit.

However when I ran this logic past my Brazilian friends, they all said that the deduction will go up to compensate for the increased benefit (due to increased fares) to the end user / worker. So it's not like the companies will eat 100% of the increase.

You should run it by your Economics professor, it's called cost pass through. The companies will not eat the increase. They pass it on to their customers by raising prices. Thus it contributes to inflation, which is one of the basic grievances of the demonstrators.

[Golfinho]

Why?

Poor do not protest when they get all the "support". There are all kinds of financial aids: Bolsa familia, bolsa cracudo, bolsa puta, bolsa this and bolsa that. Even the convicts family gets more money than an honest worker. So you won't see the poor in the barricades. And the show goes on.

Just like in America, where they know how to buy off the poor: the dregs who come from nothing, no talent, no education, no future but they can sign up to the poor mans' college, be military enlistees. Tools suckin' tit, they get bought off and can go to poor countries strut around like little kings even though they are nothing in their home country.

[Eric Cartman]

While I was caught up in the shit in Sao Paulo this past weekend my girl who came down from Belo Horizonte explained to me that just as the place of work has to cover lunch, they also have to cover most of the bus fare. She said that of the 20 cent that it is going up, the worker only has to pay 6 cent of it. She is 40 and a university student and seemed to think the whole protest thing is bullshit.

You get a flat % deduction of your salary, might be 6% or 7, and then the employer has to cover the full cost of your daily transport.

So if you make, say, R$1000 per month but have R$20 / day (R$10 each way) of buses / ferries / etc, you come out ahead.

Deduction: R$70 deducted from your paycheck (7%)

Employer VT: R$20 * 20 work days / mo (or whatever) = $400 in Vale Transporte (the transport benefit)

It breaks down when you earn a high salary, which is why nobody making, say, more than R$5000 per month takes the VT benefit.

However when I ran this logic past my Brazilian friends, they all said that the deduction will go up to compensate for the increased benefit (due to increased fares) to the end user / worker. So it's not like the companies will eat 100% of the increase.

[Prosal]

I was surprised that there seems to be so few "typical poor guys" (black people and nordestinos) in the protests. It seems like the majority are white. A mixture of Patricinhas, Mauricinhos, students, maconheiros, hippies, veados, communists and plain troublemakers.

What happens in Brasil, Turkey, etc. Is exactly what happened in USA, France, Italy, ect in 1968. The middle-class 18-29 yo population is demographically the most important part of the population. They require more rights, freedom, less corruption etc.

[Perkele]

I was surprised that there seems to be so few "typical poor guys" (black people and nordestinos) in the protests. It seems like the majority are white. A mixture of Patricinhas, Mauricinhos, students, maconheiros, hippies, veados, communists and plain troublemakers.

Why?

Poor do not protest when they get all the "support". There are all kinds of financial aids: Bolsa familia, bolsa cracudo, bolsa puta, bolsa this and bolsa that. Even the convicts family gets more money than an honest worker. So you won't see the poor in the barricades. And the show goes on.

[Sperto]

I was surprised that there seems to be so few "typical poor guys" (black people and nordestinos) in the protests. It seems like the majority are white. A mixture of Patricinhas, Mauricinhos, students, maconheiros, hippies, veados, communists and plain troublemakers.

[Mr Enternational]

After watching so many financial shows about what happens to the city's economy after hosting the Olympics, I couldn't understand why Rio was so excited to win the games. The money that is spent is horrendous and then the city has no need for all the new venues that they built for the games.

At least here in Atlanta they were smart enough to build most of the different venues at the many colleges and universities that we have. That made it well worth the price of admission because all the schools got something new and the venues did not go to waste afterwards. The tennis stadium was not attached to a school and 17 years later it doesn't get any use at all (still looks brand new though).

[Mr Enternational]

There also is a bit of "what an entitled gringo you are" if you express a sentiment saying that the bus price hike (R$0. 20 per ride) doesn't seem that high. Which may be true, as I suppose if you ride 1-2 buses every day to and from work, you're up to maybe just under R$1. 00 per day or R$30 per month, which is hitting some people in their budgets.

While I was caught up in the shit in Sao Paulo this past weekend my girl who came down from Belo Horizonte explained to me that just as the place of work has to cover lunch, they also have to cover most of the bus fare. She said that of the 20 cent that it is going up, the worker only has to pay 6 cent of it. She is 40 and a university student and seemed to think the whole protest thing is bullshit.

[Helpmann]

1) Cost of living increases.

2) Sluggish economy.

3) All the money being spent on the World Cup and not public services (transportation, schools, hospitals.)

The protests in Brazil seem inline with the current protests in Turkey and the occupy Wall Street protests in the US, where you see primarily the young and middle class in the streets.

People do not appear to be upset because they cannot feed their families, because the price of bread and rice is too high, like during the Arab spring. People appear to be frustrated that they cannot consume as much as they did two years ago.

Nevertheless, GDP growth in Brazil was just 1% last year compared to Peru and Colombia, which had near 7% and 6%, respectively in 2012. Also, the real has depreciated to the dollar by about 30% over the last two years.

-Helpmann

[Eric Cartman]

1) Cost of living increases.

2) Sluggish economy.

3) All the money being spent on the World Cup and not public services (transportation, schools, hospitals.)

Most of the Brazilians I talk to here say that while the protests have their root in the items above, the exaggerated gatherings and violence are being promoted / organized by the opposition political party to discredit Dilma's government. The Brazilians I talk to criticize the violence, but sympathize more with shops that are vandalized ("think of the poor shopkeeper who works all day and now has to try to fix the damage") vs. The banks that are vandalized ("well, they have insurance"). Still they are critical of the people taking advantage of the situation to steal and cause damage.

There also is a bit of "what an entitled gringo you are" if you express a sentiment saying that the bus price hike (R$0. 20 per ride) doesn't seem that high. Which may be true, as I suppose if you ride 1-2 buses every day to and from work, you're up to maybe just under R$1. 00 per day or R$30 per month, which is hitting some people in their budgets. Keep that in mind next time some skank at Balcony tries to justify R$400 or asks an extra R$50 for "cab money."