Poverty and social inclusion are the central concerns of the European Union’s social agenda. This chapter provides an overview of patterns and trends in poverty and social exclusion across the EU, and discusses the factors at work and the challenges they pose. It begins by discussing the concepts and measures of poverty and exclusion employed in an EU context, highlighting the broad set of indicators now in use and the multidimensional nature of the EU 2020 poverty reduction target adopted in 2010. Poverty measured in relative income terms rose only marginally on average through the economic crisis, but an ‘anchored’ income poverty measure shows much larger increases for the hardest-hit member states, where deprivation also rose. As a consequence, the number at risk of poverty and social exclusion as measured in the 2020 target has risen rather than fallen. A relatively high risk of poverty is generally faced by those with low levels of education and skills, the unemployed, people with disabilities, single parents, large families, the elderly, children, ethnic minorities, migrants and refugees, but to an extent that varies widely across countries. More jobs do not necessarily go with lower poverty: some member states with relatively high overall employment rates still have above-average proportions of working-age persons living in jobless households, and the long-term unemployed, migrants and those with disabilities may not benefit from increases in overall employment rates. The current orientation of the EU towards addressing poverty reflects its multifaceted nature, and is framed in terms of a Social Investment Strategy. While social policies have a major role to play, poverty reduction has to be seen as a central aim of policy more broadly, including macroeconomic policy, if substantial progress is to be made.
Ireland over the period from 1995 to 2012 saw a remarkable economic boom followed by deep recession, going together with dramatic fluctuations in employment levels, major changes in the composition of the labour force and in occupation and social class structures. Collective bargaining and social partnership were central throughout the boom but collapsed at the onset of recession; a national minimum wage introduced in 2001 was key to subsequent trends in earnings dispersion. Over the entire period from 1995 to 2012, middle-income groups fared well relative to the rest of the distribution. Income dynamics in boom and bust are however central to understanding trends, with some types of households doing much better in the boom, while the bust also affected some groups much more severely than others. The impact of public expenditure on public services is also a core element of middle-income living standards.
Bertrand Maître and Brian Nolan
Bertrand Maître, Brian Nolan and Christopher T. Whelan
While those working part-time or in work for only part of the year are more likely to experience poverty, those working full-time all year and still not managing to avoid poverty are also a source of particular concern. This chapter investigates the extent and nature of low pay for these workers and its relationship with household poverty and economic vulnerability across European countries. In 2006, before the onset of the economic crisis, the percentage of these employees below two-thirds of median earnings varied across countries from 10 per cent up to almost 30 per cent. Relative income poverty was then a rare phenomenon for those who were not low-paid, whereas the low-paid faced a much higher poverty risk. In 2013 the pattern of low pay for these workers was quite similar, despite the economic turmoil, and there was little or no increase in poverty risk vis-à-vis relative income thresholds for those who were not low-paid. For the low-paid, there were some quite sharp increases in the risk of poverty, but only in certain countries. In both years the likelihood of a low-paid worker being in a household below the at-risk-of-poverty income threshold was linked to gender, age and, in particular, the presence or absence of other earners.