Poverty in the European Union
The perennial social affliction that is poverty is often associated with some far-off country, generally in Sub-Saharan Africa, where every day is a struggle for survival. Without a doubt, this form of poverty continues to blight a large portion of...
The perennial social affliction that is poverty is often associated with some far-off country, generally in Sub-Saharan Africa, where every day is a struggle for survival.
Without a doubt, this form of poverty continues to blight a large portion of the developing world, and requires a mammoth collaborative effort by developed nations in order to help eradicate it.
In reality, however, one need not look beyond European shores to witness the appalling imprint of this social evil.
The EU is often considered to be a haven of wealth and economic prosperity, a reality far removed from the problems faced in third world countries.
Yet a cursory glance at figures published by Eurostat (the EU's statistical arm) paints a highly different and disconcerting picture. In fact around 15 per cent of the EU's total population can be considered to be at risk of poverty, i.e. around 74 million people all around the 27 member states.
Quite apart from the controversies surrounding the reliability of the method employed for measuring the risk of monetary poverty (usually taken to be any person earning below 60 per cent of the median disposable income), together with other equally-significant considerations related to non-monetary poverty, the situation certainly merits close attention.
Matters are further exacerbated when considering that 19 per cent of children in the EU are at risk of poverty, a state of affairs that will unquestionably have a lasting impact on their future prospects in terms of education, healthcare and job opportunities.
In addition, 19 per cent of pensioners over the age of 65 in the EU find themselves in similar circumstances.
These individuals are highly vulnerable to the negative implications associated with poverty due to their great dependence on past savings and public pension systems.
Obviously, it is imperative to analyse the underlying reasons behind such figures, especially in light of the EU's oft-repeated mantra of solidarity and respect for human dignity. Unfortunately, over the years this step has proven to be a stumbling block, simply because there are so many possible factors which may place an individual at risk of poverty.
A low level of education is frequently cited as the main culprit, given that this limits one's ability to pursue more adequate employment with higher income prospects.
This implies that the individual in question must necessarily seek low-paying jobs with limited opportunities for growth and improvement.
The spectre of unemployment must also be factored into the unfortunate equation, since such individuals are more likely to be laid off from work during times of economic downturn, thereby worsening their already-precarious situation.
In addition, researchers have identified numerous other factors which would make an individual more likely to suffer from the malady of poverty.
These include ethnic background (witness the plight of Roma communities all around the EU), disability and even family size and composition (an EU Commission Report found that children from large families are more likely to suffer from poverty than those belonging to smaller families). Often it is not merely a question of low incomes. Discriminatory attitudes may also hinder one's ability to pursue higher living standards, thus creating a vicious cycle of poverty.
Hence, it is clear that when it comes to eradicating poverty it is important to adopt an all-encompassing approach that takes into consideration all these factors (and several others). Reforms to social services are already being enacted around the EU; these should seek to ensure that vulnerable groups have full access to such essential services like health care and education.
The general trend has been to shift the responsibility of providing these services from the government to the private sector, while simultaneously guaranteeing provision to low-income groups. These efforts are of utmost importance, especially as governments seek to keep public finances in check, although one must keep an eye open for the numerous pitfalls. For example, in the UK private pension schemes have lost around €57 billion in value since August 2008. In such cases the government must either intervene, thereby straining public finances, or permit millions of pensioners to teeter on the brink of financial ruin.
Clearly, policy initiatives must not be restricted solely to economic or financial handouts. The concept of empowerment assumes massive proportions, since poverty is a social stigma that breeds hopelessness and desperation. Measures aimed at facilitating entrance into the labour market must be pursued with vigour, coupled with attempts to stamp out any abuses or exploitation together with issues related to all forms of discrimination. In this respect, one cannot underestimate the role of NGOs and social partners as key players in alleviating poverty, in collaboration with the central government and local councils.
In light of the global economic crisis, the fight against poverty has become more topical and, crucially, more ominous.
As governments scramble to come up with large-scale bailout plans for their ailing banking sectors, one must also keep in mind the plight of the poor, who are more vulnerable to the negative implications of such large-scale shocks.
Ultimately, poverty eradication is not just an economic dilemma - it is a moral obligation.
For more information please visit www.impetuseurope.com or contact jonathan.spiteri@impet useurope.com.
Spiteri is a research executive at Impetus Europe Consulting Group Ltd.
Without a doubt, this form of poverty continues to blight a large portion of the developing world, and requires a mammoth collaborative effort by developed nations in order to help eradicate it.
In reality, however, one need not look beyond European shores to witness the appalling imprint of this social evil.
The EU is often considered to be a haven of wealth and economic prosperity, a reality far removed from the problems faced in third world countries.
Yet a cursory glance at figures published by Eurostat (the EU's statistical arm) paints a highly different and disconcerting picture. In fact around 15 per cent of the EU's total population can be considered to be at risk of poverty, i.e. around 74 million people all around the 27 member states.
Quite apart from the controversies surrounding the reliability of the method employed for measuring the risk of monetary poverty (usually taken to be any person earning below 60 per cent of the median disposable income), together with other equally-significant considerations related to non-monetary poverty, the situation certainly merits close attention.
Matters are further exacerbated when considering that 19 per cent of children in the EU are at risk of poverty, a state of affairs that will unquestionably have a lasting impact on their future prospects in terms of education, healthcare and job opportunities.
In addition, 19 per cent of pensioners over the age of 65 in the EU find themselves in similar circumstances.
These individuals are highly vulnerable to the negative implications associated with poverty due to their great dependence on past savings and public pension systems.
Obviously, it is imperative to analyse the underlying reasons behind such figures, especially in light of the EU's oft-repeated mantra of solidarity and respect for human dignity. Unfortunately, over the years this step has proven to be a stumbling block, simply because there are so many possible factors which may place an individual at risk of poverty.
A low level of education is frequently cited as the main culprit, given that this limits one's ability to pursue more adequate employment with higher income prospects.
This implies that the individual in question must necessarily seek low-paying jobs with limited opportunities for growth and improvement.
The spectre of unemployment must also be factored into the unfortunate equation, since such individuals are more likely to be laid off from work during times of economic downturn, thereby worsening their already-precarious situation.
In addition, researchers have identified numerous other factors which would make an individual more likely to suffer from the malady of poverty.
These include ethnic background (witness the plight of Roma communities all around the EU), disability and even family size and composition (an EU Commission Report found that children from large families are more likely to suffer from poverty than those belonging to smaller families). Often it is not merely a question of low incomes. Discriminatory attitudes may also hinder one's ability to pursue higher living standards, thus creating a vicious cycle of poverty.
Hence, it is clear that when it comes to eradicating poverty it is important to adopt an all-encompassing approach that takes into consideration all these factors (and several others). Reforms to social services are already being enacted around the EU; these should seek to ensure that vulnerable groups have full access to such essential services like health care and education.
The general trend has been to shift the responsibility of providing these services from the government to the private sector, while simultaneously guaranteeing provision to low-income groups. These efforts are of utmost importance, especially as governments seek to keep public finances in check, although one must keep an eye open for the numerous pitfalls. For example, in the UK private pension schemes have lost around €57 billion in value since August 2008. In such cases the government must either intervene, thereby straining public finances, or permit millions of pensioners to teeter on the brink of financial ruin.
Clearly, policy initiatives must not be restricted solely to economic or financial handouts. The concept of empowerment assumes massive proportions, since poverty is a social stigma that breeds hopelessness and desperation. Measures aimed at facilitating entrance into the labour market must be pursued with vigour, coupled with attempts to stamp out any abuses or exploitation together with issues related to all forms of discrimination. In this respect, one cannot underestimate the role of NGOs and social partners as key players in alleviating poverty, in collaboration with the central government and local councils.
In light of the global economic crisis, the fight against poverty has become more topical and, crucially, more ominous.
As governments scramble to come up with large-scale bailout plans for their ailing banking sectors, one must also keep in mind the plight of the poor, who are more vulnerable to the negative implications of such large-scale shocks.
Ultimately, poverty eradication is not just an economic dilemma - it is a moral obligation.
For more information please visit www.impetuseurope.com or contact jonathan.spiteri@impet useurope.com.
Spiteri is a research executive at Impetus Europe Consulting Group Ltd.