Almost 80 million people across the EU live at risk of poverty and find it difficult to access employment, education, housing and other basic services. And in Malta, despite the fact that 65 per cent think of themselves as making ends meet, 53 per cent think the problem of poverty is widespread. As part of the 2010 European Year Against Poverty, we look at how the EU defines and measures poverty, the some of the reasons behind it and how the social condition is being addressed
The many faces of poverty
Poverty threshold and
material deprivation
EU member states have agreed a common way to measure poverty, which is to live on an income below a threshold, defined as 60 per cent of the median income of the country of residence – the 'at risk of poverty threshold'. According to this definition, nearly 80 million people, namely 17 per cent of the EU population, are poor. The at-risk of poverty indicator reflects the impact of social policies, especially on employment and income redistribution, and also reflects the political objective of the EU to fight income inequalities and ensure that the overall wealth of the EU benefits all its citizens.
The material deprivation rate provides a headcount of people whose living conditions are seriously affected by a lack of resources. It is defined as the percentage of people who cannot afford at least three of the following nine items: to pay their rent or mortgage and utility bills, to keep their home adequately warm, to cope with unexpected expenses, to eat meat or other proteins regularly, to go on holiday, to buy a television, a fridge, a car and a telephone. The material deprivation indicator reflects primarily the level of development of the country.
The gap between the material deprivation indicator and the at-risk of poverty indicator is bigger in the new member states.
Both definitions are conventional – they reflect a consensus between member states on the use of statistical tools to measure some key aspects of poverty.
Main groups at risk
and causes of poverty
Poverty has multiple faces. The groups most affected are children, the elderly, single parents, women, lone parents, disabled people, migrants and ethnic minorities (incl. the Roma).
Poverty has multiple roots. Among the reasons behind poverty, one finds a combination of structural, societal and individual factors such as poor housing, insufficient skills/low level of education, lack of real access to healthcare and other such services, difficult access to the labour market, over-indebtedness, discrimination, living in a disadvantaged area, etc.
Most poor people do not stay in poverty all their life, but some do, and poor children are more likely to become poor adults.
Grounds for fighting poverty
and exclusion
A democratic society is based on solidarity, and so no one should be left marginalised. Fighting poverty and promoting social inclusion for all is in the interests of the whole society.
Poverty has some hidden costs that society cannot afford. Social inequality feeds violence, whereas preventative policies are more effective and cheaper than interventions to combat lasting exclusion. The ageing of the European population and future workforce shortages imply that EU countries will need to raise their capacity to integrate more people into the labour market.
The EU has helped member states coordinate, learn from each other
and put the issue on the agenda
Since 2000, the EU has developed a specific strategy on social inclusion, with the aim of "making a decisive impact on the eradication of poverty". The EU adopted common objectives that policy-makers have to implement in order to make progress towards the social inclusion of all. It has been promoting mutual learning among countries, so that policy measures can rely on comparable knowledge throughout the EU and become more effective.
In addition, the EU has developed legislation against discrimination. The European Charter of Fundamental Rights guarantees some social rights, the more effective respect of which will contribute towards reducing poverty. The Lisbon Treaty ensures that the social objectives of the EU are taken into consideration in all the Community's policies.
By supporting employment, the European Social Fund also contributes to fighting poverty and social exclusion. It helps people enhance their education and skills, which improves their job prospects. The ESF spends over e10 billion a year across all member states, which represents more than 10 per cent of the total budget of the European Union EU.
Poverty is not fatal:
ways to pull out of it
Poverty is not a fatality: people do manage to improve their situation through a combination of both public and private support.
Empowering people to fight the discrimination they may suffer plays a key role in restoring their independence.
Having a job is the best protection against poverty, even if it is not always sufficient, as figures show that eight per cent of people with a job live below the poverty threshold.
Social transfers reduce the proportion of poor people by 35 per cent. Nevertheless, the impact of social transfers on the reduction of poverty greatly differs across member states.
The key objectives set by the EU to fight poverty and social exclusion are: ensuring access to sufficient resources (eg through minimum income), rights and services (eg social services), ensuring labour market participation, improving the governance of social inclusion policies (not least through the involvement of civil society).
The impact of social transfers on reducing poverty is, to some extent but not entirely, correlated to the level of these social transfers. Policy choices on how to best use the social protection budgets have an impact on the effectiveness of this type of expenditure.
What is the impact of the crisis?
Social protection systems have started to play their role as automatic stabilisers, and have helped EU member states respond in a coordinated manner.
The first signs of economic recovery are now apparent, but the full impact of the crisis on labour markets and public finances is still to be faced. The European Commission forecasts that unemployment is likely to reach 11 per cent by the end of 2010 and that social expenditure may rise from 28 per cent to 31 per cent of GDP between 2008 and 2010.
The social consequences of the downturn have started to materialise. Many households have seen their income fall, considerable numbers are more exposed to poverty and over-indebtedness and some have lost their homes.
Those most hit are workers on short-term or other forms of precarious contracts, migrants, young and older workers, but also categories who were previously relatively well protected.
The response of member states to the crisis was varied: ensuring budgetary discipline, consolidating labour market measures to support employment, activating and promoting re-integration in the labour market (such as flexible working time arrangements), supporting people's income through various measures (unemployment benefits, minimum income). Fighting poverty remains crucial to not wasting human potential and preparing the EU for the future. The crisis has emphasised the need for increased social protection in the context of greater constraints on public finances.
The EU has been active in tackling the social dimension of the crisis by mobilising funding, promoting employment and improving coordination between member states.
More information on tackling the social dimension of the crisis is available on http://ec.europa.eu/social/main.jsp?langId=en&catId=736
Nine out of 10 Europeans want
urgent action on poverty
Seventy-three per cent of EU citizens consider poverty to be a widespread problem in their country, while 89 per cent want urgent action by their government to tackle the problem. Those are the key results from a Eurobarometer survey on attitudes to poverty and social exclusion presented by the European Commission recently that was presented to mark the 2010 European Year Against Poverty.
"These results show that Europeans are strongly aware of the problems of poverty and social exclusion in today's society and want to see more action to tackle them," said Social Affairs Commissioner Vladimír Špidla. "While most people see their national government as primarily responsible, three-quarters also expect the EU to play an important role. This year's European Year Against Poverty gives us the perfect opportunity to put the fight against poverty centre stage across the EU."
Against a bleak picture of nearly 80 million people - or 16 per cent of the EU population - living below the poverty line and facing serious obstacles in accessing employment, education, housing, social and financial services, today's survey sheds light on the many facets of poverty and social exclusion.
EU citizens are strongly aware of poverty and social exclusion, with 73 per cent feeling that poverty in their country is widespread.
High unemployment (52 per cent) and insufficient wages (49 per cent) are the most widely perceived 'societal' explanations for poverty, together with insufficient social benefits and pensions (29 per cent) and the excessive cost of decent housing (26 per cent). On the other hand, a lack of education, training or skills (37 per cent), as well as 'inherited' poverty (25 per cent) and addiction (23 per cent) are the most widely perceived 'personal' reasons behind poverty.
Over half of EU citizens (56 per cent) believe that the unemployed are most at risk of poverty, while 41 per cent believe that the elderly are most vulnerable, and 31 per cent cite those with a low level of education, training or skills.
Close to nine out of 10 Europeans (87 per cent) believe that poverty hampers people's chances of gaining access to decent housing, eight out of 10 feel that being poor limits access to higher education or adult learning, and 74 per cent believe that it damages their chances of finding a job. The majority of Europeans (60 per cent) believe that access to a decent basic school education is affected, and 54 per cent believe that the ability to maintain a network of friends and acquaintances is limited by poverty.
On average, 89 per cent of Europeans say that urgent action is needed by their national government to tackle poverty. Across the EU, 53 per cent feel that their national governments are primarily responsible for combating poverty. Even if its citizens do not regard the European Union as primarily responsible for combating poverty, its role is nonetheless seen as important by many (28 per cent see it as "very important", and 46 per cent "somewhat important").
The Eurobarometer survey was carried out between 28 August and 17 September 2009. Overall, nearly 27,000 citizens in all EU member states were interviewed face-to-face, following a random selection of respondents.
Collective responsibility and
renewed commitment for the EY2010
Ten years ago, EU leaders pledged to "make a decisive impact on the eradication of poverty" by 2010. Today, however, a significant number of EU citizens still live in poverty and have limited access to basic services such as healthcare. Poverty and exclusion not only affect the well being of individuals and their ability to play a part in society; they also impair economic development. With this in mind, the EU is stressing the importance of collective responsibility in combating poverty, involving decision makers and participants in the public and private sectors. The 2010 European Year for Combating Poverty and Social Exclusion will seek to give a voice to those suffering on a daily basis.
