Wednesday

26th Sep 2018

Opinion

Mind the gap: inequality in our cities

  • Barcelona is a willing 'guinea pig' in EU pilot projects for forms of the minimum wage, according to its deputy mayor Laia Ortiz (Photo: Paulina)

Growing poverty and inequality across European cities is putting a strain on the European social model.

We need to rethink how welfare instruments provide social justice. One impact of the financial crisis has been to reignite debate on how a minimum guaranteed income can ensure a life of dignity for all.

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The European Pillar of Social Rights is an opportunity to strengthen social cohesion through a fairer and more equitable redistribution of wealth. Its 'Principle 14' says that everyone lacking sufficient resources has the right to adequate minimum income benefits, ensuring a life of dignity at all stages of life.

There are several elements to the debate.

Existing social welfare models are typically linked to conditions or obligations, are means-tested and act counter-cyclically.

Minimum wage and minimum income are the most commonly used and understood. In some places, such as the UK, there is also discussion about a living wage, a kind of minimum wage reflecting the differentiated cost of living in cities, already in affect in several cities.

A universal basic income, on the other hand, implies a government commitment to pay an unconditional benefit to all citizens, regardless of whether they are in work or not, and this option is getting higher on EU political agendas.

The European Parliament, for instance, recently adopted it in a report on minimum income policies as a potential tool for fighting poverty. The possible benefits of basic income include promoting a better work-life balance, to allow people to move in and out of employment according to changing circumstances, by providing income security or avoiding the poverty trap of current minimum income schemes.

Generating a better understanding of how these different models can lift people out of poverty will benefit better European social policy and lead to stronger social cohesion in Europe.

Theory into practice

Currently a lot of vulnerable people, such as the homeless, long-term unemployed or Roma people, find it difficult to access welfare entitlements due to lengthy and complex procedures.

This means that welfare is not distributed as it should be, creating inequality within the same city, region or country. Basic income would solve the problem of accessibility to the right to minimum income.

While the level of minimum wage or minimum income is determined by central government, in consultation with the social partners, city authorities have a big role to play in implementing it at local level to see what works and under which conditions.

In Barcelona, we are piloting four different minimum income models at the same time, over a two-year period to make a comparison between them.

Some 1,000 families have been selected and randomly allocated into four groups to test the four policy options, receiving different grants.

Participants of one group will continue receiving a minimum income of €403-663 per month (and additional quantities for each additional member of the household) even after they find work while the others will not, in an effort to test the effects of these policies on their behaviour.

By the end of this project we expect to better understand what type of intervention most effectively reduces poverty by better relating support services with people that need them.

We can make the European social pillar more impactful by taking account of the findings of experiences at the local level.

Localising the European social pillar

Cities are the right scale to implement this kind of initiative.

Through our membership in Eurocities, the network of major European cities, Barcelona is working with other cities to better link economic and social policies.

Utrecht and Helsinki have their own projects on minimum income, and we can always learn from each other's experience in this and other areas.

Cities can contribute with their knowledge and experience from the ground to European social policy like the European Pillar of Social Rights.

At the local level, we can implement and monitor the principles and rights from the social pillar.

Through Eurocities, we can feed back into EU social policies with evidence based on mutual learning and peer reviews between cities. This can help to capture the diverse social situations within member states' local realities, which aggregate figures based on national or regional averages are not able to do.

The social scoreboard indicators of the social pillar, such as the ones on inequality, living conditions and poverty, and the impact of public policies on reducing poverty, will also help improve European level social policies by adding data from the local level.

Cities are ready to work with the EU institutions and member states to find ways to tangibly improve people's lives. We want to contribute to an EU that puts people's concerns at the heart of policy.

Ultimately social rights should be available for all citizens.

This was the key message from EUROCITIES recent social affairs forum in Gothenburg, ahead of the EU Social Summit, where cities committed to our statement 'Social Rights for All'. There, we showed that by working together at local level, where we are closest to citizens, we can develop a stronger social Europe.

Laia Ortiz is deputy mayor of Barcelona and chair of the Eurocities Social Affairs Forum

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