Tuesday

17th Jan 2017

Jobs not lifting Europeans out of poverty, commission warns

  • Low wage jobs are leaving workers in poverty, the EU says (Photo: Tax Credits)

One in four Europeans are at risk of poverty, the European Commission said Tuesday (21 January).

Unveiling its annual report on 'Social and Economic developments in 2013' EU employment commissioner Laszlo Andor said the EU's fragile economic situation had left the bloc with rising poverty levels.

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"We have seen a significant increase in poverty…even it unemployment is gradually reducing," he added.

According to the EU executive's research, a gradual fall in unemployment as the EU economy recovers is unlikely to be enough to reverse an increasing trend in poverty levels.

Increasing numbers of part-time workers and low wages are also expected to lead to a widening gap between rich and poor in Europe.

The EU's overall jobless rate stands at 11 percent, compared with 12 percent in the eurozone.

The EU's statistical agency, Eurostat, estimates that more than 19 million people in the eurozone are unemployed. Youth unemployment stands at 23 percent.

However, the figures reveal a yawning gap between European countries.

Greece and Spain had the highest jobless rates at 27.3 percent and 26.7 percent respectively - more than five times higher than Austria and Germany.

Only one in three Europeans are able to move above the poverty threshold within a year.

The commission paper also indicates that low wage levels mean that finding work does not lift thousands of Europeans out of poverty.

Twenty-one of the EU's 28 countries have a minimum wage, ranging from around €160 in Bulgaria to €1,874 a month in Luxembourg, but 11 countries have minimum wages worth less than €500 a month.

"In order for an adult to exit poverty, it is usually necessary to find a job. But it is not always enough: our analysis shows that getting a job is a way out of poverty in only half of the cases," said Andor.

"Unfortunately we cannot say that having a job necessarily equates with a decent standard of living,"

The commission also wants governments to make sure that social safety nets are available to all EU citizens. The report estimates that 29 percent of the EU's unemployed were not receiving welfare benefits.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

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