Poverty in the European Union: The crisis and its aftermath


The  economic  crisis  has  exacerbated  social  burdens  such  as  poverty  and  inequality, which  were  already  major  issues  before  the  crisis.  Due  to  the  multifaceted  nature  of poverty, the European Union uses a multidimensional indicator – the ‘at risk of poverty or  social  exclusion’ rate – based  on  three  different  dimensions:  monetary  poverty, severe material deprivation, or ‘very low work intensity’.

Since  2008,  the number of people ‘at  risk  of poverty  or  social  exclusion’ has  increased in most Member States. In 2014, nearly one in four persons (122.3 million people) was at risk of poverty or  social  exclusion  in  the  European  Union.  Amongst  the  groups at greater risk, those most affected were women, children, young people, people living in single parent households, those with less education, and migrants.

New  forms  of  poverty  are  emerging.  Contrary  to  popular  belief,  work  no  longer protects against poverty. The new ‘working poor’ are often in precarious and low-paid jobs. Homelessness is no longer the fate of middle-aged men with long-standing social problems, but
also  affects  families,  young  people,  and  migrants.  Lastly,  children  are amongst the hardest hit by the crisis in terms of poverty.

Since  2008,  the  main  drivers  affecting  the  poverty  rate  in  the  European  Union are cyclical: long-term unemployment, labour market segmentation and wage polarisation. The  emergence  of  new  family models,  such  as  single  parenthood,  and  the  persistence
of inherited poverty have strengthened the phenomenon.

In  Euope,  the  main  responsibility  for  combating  poverty  and  social  exclusion  remains with  Member  States.  The  European  Union’s  role  is  limited  to  coordinating  Member State  policies  through  the  Open  Method  of  Coordination  for  social  protection  (the ‘Social OMC’), providing some funding with the European Social Fund and the Fund for European Aid  to  the  Most  Deprived, and  the  Employment  and  Social  Innovation programme.  In  2010,  with  the  adoption  of  the  Europe  2020  Strategy,  the  European
Union set a quantitative target for the reduction of poverty and social exclusion for the first  time:  lifting  more  than  20  million  people  out  of  poverty  by  2020  compared  with 2008. Nevertheless, achieving this objective in times of crisis and austerity measures is
proving extremely difficult. The European Union has drifted further from its target.

Huge  efforts are  needed to  meet  the  Europe  2020  target  on  poverty  and  social exclusion.  A  better  balance  between  macroeconomic,  fiscal,  employment  and  social objectives  at  European  Union  level  could  be  necessary.  Investing  early  in  children  and youth,  as  well  as  policies  to  develop  skills  and  improve  employability will  help. Modernising welfare states will be crucial.

Source: Poverty in the uropean Union: The crisis and its aftermath [PDF] / Marie Lecerf [EU; EPRS: European Parliamentary Research Service, 2016]

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