The picture of poverty across the EU

The most recent data available (2016) show that 23.5% of the EU population, that is about 118 million people, are at risk of poverty or social exclusion. 17.3% of the population in the EU is at risk of relative income poverty, 7.5% is severely materially deprived, and 10.5% is living in households with very low work intensity. (Source: Eurostat, January 2018)

However there is a wide difference between Member States: for instance, between 13.3% and 18% of the population is at risk of poverty or social exclusion in Austria, Denmark, the Netherlands and Finland, whereas over than 35% of the population is at risk in Bulgaria, Greece and Romania. (Source: Eurostat – SILC Database, January 2018)

 

Children (0-16) have a particularly high rate of poverty or social exclusion, standing at 25.9%. One-parent households and those with dependent children have the highest poverty risk. For single parents with dependent children the risk of poverty is 48%. The risk is also particularly high among young people (16-24), standing at 30.5%. Women are globally more at risk of relative monetary poverty, with a rate of 17,9%. (Source: Eurostat – SILC Database, January 2018)

Of course, these figures do not include some of those in the most extreme situations such as some minority ethnic groups, especially the Roma, immigrants including undocumented migrants, the homeless, people living in or leaving institutions, etc. Just to give an example, in 2016, 39,2% of the non-EU-born population in the EU was assessed to be at risk of poverty or social exclusion (AROPE), a risk significantly higher than the 22.8% concerning the native population (Source: Eurostat – SILC database, January 2018).

 

Focusing on severe material deprivation, overall at the EU-28 level, it has decreased by 0.6 percentage points (pp) between 2015 and 2016. The most notable rise was in Romania (+1.1 pp), while some countries achieved decreases between 1.4 pp and 3.7 pp (Bulgaria, Cyprus, latvia, Hungary, Malta and Poland), even though some of these countries still account for very high levels of severe material deprivation, such as an alarming 31.9% in Bulgaria – the highest in the EU. Overall at the EU level, single-person households with dependent children are the most severely materially-deprived (15.7%) followed by one adult younger than 65 years (12%) and households with three or more adults with dependent children (11.4%). (source: Eurostat, January 2018)

 

In most, but not all, Member States where poverty affects a large share of the population, it also tends to be more severe. The depth or severity of poverty (i.e. how far below the at-risk-of-poverty threshold the income of people at risk of poverty is) for the EU as a whole in 2016 was 25%: this means that half of those living under the poverty line were at least 25% below the relevant at-risk of poverty threshold. The depth of poverty ranges from as low as 13.9% in Finland to as high as 31.9% in Greece and 36.2% in Romania. In Italy, this rate jumped from 23.2% in 2008 to 31.6% in 2016, while in Slovakia it jumped from 18.1% in 2008 to 26.1% in 2016. (Source: Eurostat – SILC Database, January 2018)

 

The depth of poverty has worsened in most countries during the crisis: among people facing monetary poverty, more people have dropped to the bottom of the income distribution ladder since the beginning of the crisis.

 

Unemployment is a key factor in people being at risk of poverty.

In 2016, 48.7% of people who were unemployed were at risk of poverty. Severe material deprivation among unemployed people is also higher than within the whole population. In 2016, 10.8 million people in the EU suffered both severe material deprivation and were living in a household with very low work intensity; almost 8.4 millions of them were also at risk of poverty and social exclusion. (Source: Eurostat – SILC Database, January 2018)

In 2016, 9,6% of the people in employment were living under the poverty threshold. In-work poverty increased by 1.3% at the EU-28 level between 2010 and 2016. in 2016, 18.9% of workers were in poverty in Romania, 13.1% in Spain and 14.1% in Greece. Generally speaking, men are more affected by in-work poverty than women (10% for men, against 9.1% for women). (Source: Eurostat – SILC database, January 2018)

Thus, while a job is a key route out of poverty, not all jobs pay enough to actually lift someone out of poverty.

Is the EU going to eradicate poverty?

The EU has set itself the objective to overcome poverty and make significant progress on the eradication of poverty since 2000. In 2010, the Heads of States and Governments committed themselves to reducing poverty and social exclusion by at least 20 million people. Is this going to happen? In 2014-2015, the Commission performed a mid-term review of Europe 2020. Overall, instead of meeting the goal, there has been a 1.6 million increase in the number of people at the risk of poverty and social exclusion since 2008. (Source: Eurostat, March 2016)

 

The 2016 overall figure for the percentage of people-at-risk-of-monetary poverty (17.3%) is higher than that from 2005 (16.5%), but in a context of decreasing household income this may hide increasing monetary poverty in reality. The AROPE indicator has not varied a lot since 2008 (23.5% in 2016 against 23.3% in 2008), but the crisis appears to have stopped the previous trend of slow continuous reduction. (Source: Eurostat – SILC Database, January 2018)

 

It is very important to acknowledge that since the crisis the divergence between different parts of the EU is growing, with a new divide emerging between Southern and Eastern European countries where the social situation is deteriorating more severely than in Western and Northern countries. Countries with robust welfare systems have shown better resilience.

Austerity policies implemented although the EU have accelerated this social deterioration, through the limitations in wages and benefits and the cuts in services.

 

Whether poverty and social exclusion will be effectively combated over the next years will depend notably on the capacity of the EU and the Member States to acknowledge the negative impact of harsh austerity policy and to implement a balanced approach to crisis recovery likely to preserve human capital, human dignity and the European Social Model.