The Working Poor in Europe

The Working Poor in Europe

Employment, Poverty and Globalization

Edited by Hans-Jürgen Andreß and Henning Lohmann

For a long time in-work poverty was not associated with European welfare states. Recently, the topic has gained relevance as welfare state retrenchment and international competition in globalized economies has put increasing pressures on individuals and families. This book provides explanations as to why in-work poverty is high in certain countries and low in others.

Chapter 10: Low Pay and Household Poverty During Ireland’s Economic Boom

Brian Nolan

Subjects: development studies, development studies, economics and finance, labour economics, social policy and sociology, comparative social policy, economics of social policy, labour policy


Brian Nolan INTRODUCTION Ireland has seen a dramatic economic boom over the past decade, with unprecedented levels of growth in employment and living standards. Unemployment has fallen very sharply, substantial numbers of migrants have been attracted to Ireland to work, and a minimum wage has been introduced to protect those in work on low wages. Despite this, the numbers of ‘working poor’ appear to have grown, certainly if one focuses on the poverty measures incorporated in the European Union’s (EU’s) Laeken indicators of social inclusion. Here we use data for Ireland from the new EU-SILC, and from the European Community Household Panel it replaced, to assess the extent and nature of ‘in-work poverty’ after Ireland’s economic boom. This is of particular interest for what it reveals about the relationship between economic growth and in-work poverty, and about the importance of how poverty is measured in such circumstances. MEASURING THE WORKING POOR As discussed in earlier chapters, the definition of poverty that is widely accepted in industrialized countries refers to exclusion from the ordinary life of the community owing to lack of resources. A household’s poverty status is usually measured by looking at whether its disposable income, adjusted for the number and ages of household members, falls below a specified income threshold, often derived as a proportion of mean or median household income in the country.1 ‘In-work poverty’ or ‘the working poor’, then, refers to individuals who live in poor households but are themselves in work. In measuring both...

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