Report

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

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