New Middle Class Driving Brazil Economic Makeover

JENNY BARCHFIELD

RIO DE JANEIRO (AP) ⿿ The orthodontist bent intently over Flavia Soares da Costa's open mouth, tightening the glimmering silver brackets that are remaking her smile.

Not long ago, it would have been all but unthinkable for the 33-year-old former secretary and single mother to undergo such pricey dental work.

But Costa's fortunes have recently improved, with a promotion and a raise that brought her disposable income.

In fact, an estimated 40 million people such as Costa have joined the ranks of Brazil's middle class between 2003 and 2011, according to the Fundacao Getulio Vargas economic think tank, providing them with enormous purchasing power and sparking businesses to come up with new marketing techniques to woo them.

For most of its modern history, Brazil has been a nation of the starkest economic divides: Super rich, super poor. Businesses that sold anything but the most basic items trained their sights on the upper strata.

Now, Brazil is a major player in a global economic shift that is seeing formerly "developing" nations morph into "middle income" countries ⿿ where a burgeoning middle class is driving a boom in business to capitalize on the sea change.

From gyms to hair salons, travel agencies to home appliance stores, "everyone wants to dance with the new middle class," a recent opinion article in the Folha de S. Paulo daily said.

The metamorphosis is largely the product of a decade of mostly solid economic growth and an array of cash-transfer social programs that pay Brazilians a stipend for meeting social goals, such as keeping their kids in school.

The economic think tank defines the middle class, or Class C as it's known here, as households with monthly incomes of $600 to $2,590. In 1993, just over 45 million people were considered Class C. In 2011, their ranks had swollen to more than 105 million ⿿ accounting for 46 percent of the country's buying power.

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