Holistic approach needed to tackle in-work poverty
In-work poverty rates – which denote the proportion of a given population living in or at risk of poverty despite being employed – have been rising over the past few decades. “In-work poverty is relative,” explains WorkYP project coordinator Luca Ratti from the University of Luxembourg. “It refers to a person earning below 60 % of the median wage.” Another important element to take into account however is the household situation. A single wage earner with kids is likely to struggle more than a single person on a minimum income. Casual working arrangements – which offer little security and few benefits – are also harder to capture in statistics, suggesting that the phenomenon could be even more entrenched than policymakers believe.
Vulnerable and underrepresented persons
The starting point for the EU-funded WorkYP project was a realisation not only that in-work poverty had become a structural reality in European labour markets, but that rates differed hugely across countries. “We were shocked by some of these disparities,” says Ratti. “We wanted to understand why in-work poverty has become a part of our labour markets. Secondly, we wanted to examine policy approaches. Because if you have a labour market where one in ten is ‘working poor’, then something is broken. Where is labour law for them?” Nearly a tenth of employed people in the EU are at risk of poverty. However, the WorkYP project began by looking at in-work poverty differently. Instead of viewing the phenomenon horizontally, as if everyone was in the same position, the project team identified four key clusters where in-work poverty appears to ‘peak’. These vulnerable and underrepresented persons included employees earning low wages in ‘poor’ sectors such as tourism and construction, as well as self-employed people who often work for only one client. Part-time temporary agency workers were also found to be far more exposed to in-work poverty, along with those with occasional and intermittent working arrangements.
Policy, law and social partners examined
The project team selected seven countries – Belgium, Germany, Italy, Luxembourg, the Netherlands, Poland and Sweden – based on their different social systems and legal orders. Analyses were carried out to better understand the role of labour law, social partners and other social stakeholders in the labour market. “Our consortium included social rights policy think tanks as well as academic institutions,” says Ratti. “It was important that we did not take an exclusively academic approach.” Workshops and conferences in the seven countries were organised, which helped to bring home the actual lived experiences of in-poverty employed people. National reports as well as a brochure on the project’s key findings have since been published.
Raising awareness of in-work poverty
A major success of the project has been to raise awareness of this phenomenon. Ratti detects a gradual shift in opinion among policymakers and the media. “I have found myself giving more interviews on this subject,” he notes. “Our final project meeting, which included Commissioner Schmit and the UN rapporteur on extreme poverty, also had an impact.” A key finding of the project has been that in-work poverty is a complex phenomenon. Many policy initiatives – such as the EU Directive on adequate minimum wages – are helpful, but cannot adequately address the challenges in isolation. They must be accompanied by complementary measures, such as state financial support related to the household. “I think this will require a dedicated EU strategy against in-work poverty,” Ratti concludes. “There are a number of good policy initiatives in the pipeline, but they need to be under the umbrella of tackling in-work poverty.”
Keywords
WorkYP, poverty, employed, median wage, labour, UN, household
