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Public policy and European society University of Castellanza Session 3(b) Poverty and social exclusion April 20 2016 Poverty rates in the EU 2003 At risk of poverty rate by country 2003; ‘at risk’ of live in households where household income ‘is below 60% of the national equivalised income. Source: Joint Report on Social Protection and Social Inclusion 2006; data from Eurostat. ‘At risk thresholds’ EU 25 2005 40000 35000 30000 25000 20000 15000 10000 5000 0 LV LT PL EE SK HU CZ PT EL MT SI ES IT FI SE FR DE IE CY DK BE NL AT UK Illustrative values for a household of two adults with two dependent children (under 14); threshold is 60% of the median income in the specific Member State LU National or European standards? Source: Fahey (2007) using 2001 EU indicators The median income in Romania is far less than the poverty threshold in most EU states National or European standards? Taking those with less than one third of average income in EU as in extreme poverty For total population of EU15 (1997) » » » » Total 2.7% Luxembourg 0.4% France 2.1% Greece 9.4% EU22 (EU25 less Latvia, Lithuanian and Slovakia) » France 1.9% » Poland 34.6% » Estonia 51.8% EU27 » France 1.8% » Bulgaria 63.6% Source Schmitter & Bauer (2001) Other poverty measures Objective » Material deprivation – Cannot afford to: keep house warm, have holidays once a year; replace old furniture, new clothes; eat fish or meat every other day; have friends/family to dinner once a week (2 or more of 6) » Housing defects – Shortage of space, rot in windows/doors, damp/leaks, no indoor toilet (2 or more from 4) » Financial problems – In arrears with utility bills in last month; could not pay for food at any time in last year (1 of 2) Subjective » Subjective economic strain – How easy to make ends meet (scale 1 to 6) (5 or higher) » Satisfaction with standard of living – (scale 1 to 10 – 1 very dissatisfied) (score 5 or lower) » Global life satisfaction – Overall satisfaction with life (1 very dissatisfied) (score 5 or lower) From Fahey (2007) An EU wide poverty measure? In the poorest 6 EU member states (2006) 45% of those in the top income quartile lacked 2 or more material items; in the richest 12 even in the poorest income quartile only 37% did. From Fahey (2007) Europe 2020 European Platform Against Poverty Aim to lift 20 million people out of poverty! But what does this actually mean…? Poverty in Europe2020 (1) At risk of poverty » Percentage below national poverty threshold 60% of national median income (2) Material deprivation » Number lacking 3 or more items on material deprivation index (3) ‘Work poor’ households » Number of households where total amount of hours worked is less than 10 per adult member So (1) is specific to each member state; (2) and (3) apply across EU. Poverty rates after the crisis Crisis and poverty Crisis has dramatically increased poverty rate in ‘South’ Poverty rate ‘anchored’ at fixed point in time (here 2008). Source: Employment and Social Developments in Europe 2013. European welfare states Three (or perhaps four) worlds of welfare Liberal Universal Conservative Mediterranean Despite variety everywhere inequality less than USA Changes since c2000 Major change: Germany – erosion of insurance principle, more inequality, more working poor Elsewhere NO big changes in system BUT impact of crisis Worst where welfare state incomplete (Greece!) Conclusion Traditional welfare state remains crucial: and the defining feature of Europe today