Working poor, the existing situation in EU, and the new class after the financial crisis
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
With the onset of the economic crisis since 2008, a new term, the working poor, has emerged at European level. This new category features a portion of the population that, although working, is paid below the relative poverty line. The working poor is closer to the European poverty indicator, the relative poverty, which, in order to be considered as poor, should have an income below 60% of the average national income.
- One of the main reasons for the rise of this phenomenon was the sharp increase in unemployment, the increase in part-time work and the austerity measures. Undoubtedly, the working poor phenomenon deserves particular attention not only for the improvement of living standards but also for the fight against social exclusion in the long-term.
Working poor: The existing situation in E.U
Although unemployment rates since the crisis have risen sharply by 2012, unemployment is 10.8% in the Eurozone and 9.3% in the EU, but June 2018 the lowest rate in the 9 years of the crisis was recorded in the Eurozone, 8.3%. However, despite the decline in unemployment rate, the working poor continues to face problems both in the EU.
In 2008, the working poor in the EU was 8%, while in 2017 it amounted to 9.6% of the workforce. According to Eurofound , the countries of the South and the Balkans have the largest proportion of working-poor with Romania exceeding 18%, Greece at 13%, Spain at 12.5%, while the lowest percentage is recorded in Finland as it reaches just 2 , 8%.
Low wages and unstable working conditions are the biggest problems of working poor, as they are more exposed to poverty. The risk of poverty is greater for a household if one person is working, as there are less earnings. If there are 2 employees in a household and the second has a supplementary income then the threat of poverty is eliminated.
Among the working poor, different percentages are gender-based, as women are more vulnerable and have less labor force participation. In the cases that women are the second employee in the household, chances of exposure to poverty are reduced. Women are working more often than men in part-time or temporary employment, and their wages are lower. In 2010, in couples, 14% of women compared to 2% of men did not have any personal income.
Differentiation exists also among the types of employment between employees. In particular, those who work full time account the 5% of the working poor, and the part-time employees are the 15% of working poor. Respectively, temporary workers account for 16% of working poor. The latter two categories have grown particularly since the 2008 financial crisis and are in the most vulnerable situation.
As far as education is concerned, Eurostat statistics show that it plays an important role as the lower the level of education, the higher the chance for a lower salary. Specifically, in 2014, 28.2% of employees with low educational attainment had a fairly low salary, 20.9% of those with a secondary education level and 7% of those with a high level of education.
The threat of social exclusion…
One of the repercussions of working poor is the social exclusion as poor workers are not able to be involved in social activities. Moreover, issues of mental well-being, satisfaction in daily life with social impact emerge from this situation. Characteristically, 18% of them are constantly angry and 10% suffer from depression or frustration. According to a Eurofound study, workers experiencing poverty have slightly better mental health than the unemployed who are out of work or training.
- Within this context, there is a sense of lack of help from the social environment, which also affect the interpersonal relationships as confidence has been lost. Working poor are less likely to have people with common interests to talk or to spend time together, so they are more closed. Material deprivation, which is a common characteristic in the working poor category, creates a sense of non-recognition by society and a social marginalization.
EU should undertake initiatives
The EU has set the objective ,through the Europe 2020 Strategy, to reduce the number of poor by 20 million, paying particular attention to employment, education and training. Both the European Social Fund and the European Strategic Investment Fund seek to create new jobs and reintegrate young people into either education or training programs.
However, in order to improve the standard of living of this particular proportion of the population, that while working is on the poverty line and can not fulfill its basic daily activities, a series of tailor-made measures and initiatives are required. Since one of the variables affecting working poor is education, particular emphasis should be given for the amelioration and increase of the educational level of working poor. Access to lifelong learning and vocational education programs based on the needs of the labor market, with emphasis on digital skills, will enhance the ability and the skills of employees to adapt to more and different working environments.
- Additionally, strengthening the welfare state with the protection of minimum wage, working conditions, social benefits and the protection of part-time or temporary workers should be a priority for the EU. The EU, through the European Social Rights Pillar, aims to build a fairer and more socially inclusive EU. The three main categories are equal opportunities and access to employment, fair working conditions and social protection and inclusion. Under this framework, the fight against the phenomenon of working poor should be based on the institutional level.
Apart from this, single parents or families with children and 1 employee in the household are at risk of poverty. In these cases a proper work-life balance plan is needed (including childcare services) to facilitate access to work for the parents. In some cases, the lack of childcare services reduces the job-seeking or the 8-hour work of the single parents.
Consequently, it is inferred that job creation is not the only solution to reduce the poverty or unemployment rate as the working poor indicates that a series of measures and policies are needed to ensure quality and stable work. In order to reduce social exclusion and improve the standard of living of working poor, it is necessary EU to take drastically measures and to design policies both at institutional (such as minimum wage, social benefits, work-life balance) and individual level (by providing training programs, vocational education, lifelong learning).
*George Koulouris: Political Scientist based in Athens, working as Consultant/Communication Assistant at a management & consulting firm. His interests focus on social inclusion, education, employment, minority and human rights. He holds a degree in International & European studies from University of Piraeus and a Master of Arts on Sustainable Development
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