Working Poors in the EU – Policy attention should rather be on minimum household income

The working poor are a substantial group in the overall poverty statistics and are estimated to constitute 10% of European workers. This report examines in-work poverty in the European Union, picking up where a previous Eurofound report on this subject, published in 2010, ended. It looks at how in-work poverty evolved in the aftermath of the financial crisis of 2008, based on analysis of the latest data from the European Union Statistics on Income and Living Conditions (EU-SILC).

While the prevalence of in-work poverty has been studied before, less is known about what it means to be one of the working poor. This report examines the social ramifications of in-work poverty by describing the wellbeing and living conditions of the working poor. It also
looks at different measures adopted by governments to prevent or alleviate in-work poverty, especially indirect measures that improve the living standards of the working poor. These indirect measures have not received much policy attention compared with direct measures to increase incomes, such as minimum wages and social transfers.

Key findings

• Although it is difficult to discern clear trends, there
  is a link between increases in non-standard forms of
  employment in many countries and the expansion
  in the proportion of Europeans at risk of in-work
  poverty.
• The working poor face significantly more social
  problems than the population as a whole: in-work
  poverty is associated with lower levels of subjective
  and mental well-being, problems with
  accommodation, as well as poorer relationships
  with other people and feelings of social exclusion.
  This finding demonstrates the importance of paying
  specific attention to this group and better
  documenting the social situation of people at risk of
  in-work poverty.
• Most Member States do not specifically address
  in-work poverty, and the examples in this report
  show that governments and the social partners
  have approached the issue through the discussion
  of poverty more generally, with a particular focus
  on measures to get people into work.
  Consequently, the number of policies that are
  designed explicitly to protect or improve the
  situation of the working poor is limited.
• While an adequate minimum wage is a core pillar of
  any model of social protection for the working poor,
  it is clear that policy attention should rather be on
  minimum household income to reflect more
  accurately the situation of many of the working
  poor.
• One advantage of measures that indirectly improve
  the living standards of the working poor is that they
  help these households without necessarily having
  them as their main focus. Unfortunately, this can
  also be a significant disadvantage because the risk
  exists that these measures fail to reach the working
  poor. The impact of indirect measures as a tool to
  prevent in-work poverty needs to be further
  evaluated.

Chosen excerpts by Job Market Monitor. Read the whole story at In-work poverty in the EU | Eurofound