Belgian lawyer and professor of international law Olivier De Schutter has been UN Special Rapporteur on extreme poverty and human rights since 2020. He is mandated by the United Nations Human Rights Council as an independent expert on these issues.
On 20 October, he will present to the United Nations General Assembly a new report on “The working poor: a human rights-based approach to wages”, based on the observation that more than one in five workers in the world lives in poverty.
Olivier De Schutter here shares his analysis on the issues of inflation, poverty and purchasing power within the European Union.
A major American publication headlined in July that “Europeans are becoming poorer”, partly because of inflation. Have Europeans lost a lot of purchasing power?
The whole question is whether social protection and wages keep up with inflation. Salaries in 2022 increased by 4.2% in the EU area, which means a real drop of more than 4% in purchasing power, since inflation reached 8.4% in the same year. The situation is more serious in some countries. In Italy, real wages fell by 12% between 2008 and 2022, a very worrying situation.
Three EU states, Belgium, Luxembourg and Cyprus, have a system of automatic wage indexation to inflation. However, in these countries we do not see the wage-inflation spiral feared by economists. IMF [International Monetary Fund] studies show that when inflation is due to external factors, wage indexation does not lead to this spiral. In 2022, inflation was due to increased energy prices, linked to the conflict in Ukraine, but also to speculation on energy markets, as well as rising food prices, again linked to speculation on agricultural markets. To protect Europeans from the risk of impoverishment linked to the return of inflation, the system of indexing wages to inflation is good, and it works.
The International Covenant on Economic, Social and Cultural Rights includes an obligation for States to ensure the indexation of income, including social benefits, to the cost of living.
Anti-theft tags have appeared on steaks in supermarkets in Germany, while an increase in shoplifting has been noted, +14.7% in France in 2022 and +25% in the Netherlands according to the police in these two countries. Is this a worrying sign for Europe?
Shoplifting is undoubtedly a sign, with the impoverishment of Europeans manifesting itself most visibly on the food front.
Household expenses include “fixed cost” items such as rent, transport, energy for heating, health care, etc., as well as “variable cost” expenses such as food. As the price of fixed cost items increases, households spend less on the variable expenses, starting with food. As a result, people are adopting unhealthier and less diverse diets, with very problematic impacts in terms of nutrition, particularly for children. All non-communicable diseases linked to “junk food”, such as type B diabetes, gastrointestinal cancers and illnesses linked to obesity, hit in particular the least advantaged households, and where parents’ level of education is the weakest. This is a measurable and measured social injustice.
According to a 2022 report from the World Inequality Lab, the richest 10% in the world pocket 52% of all income, while the poorest half of the population receives only 8.5%. Do these numbers mean anything?
Yes and no. Poverty has long been described by social sciences as insufficient income to satisfy the essential needs for a decent life – housing, health, education. Today, we have become aware of the fact that poverty must be analysed not as an absolute but relative value. We feel poor and socially excluded when wealth gaps increase within a given society, at the same time as social expectations.
In the work carried out by ATD Quart-Monde with the University of Oxford on the hidden dimensions of poverty, the feeling of social exclusion, the shame that is felt, is not only linked to the ability to satisfy essential needs. Modern poverty must also be analysed as relative to median income and aspirations. I welcome the fact that the EU has a comprehensive definition of poverty, based on three criteria: severe material deprivation to measure absolute poverty; income below 60% of the median income to measure relative poverty; and the situation of a household where both parents do not work, to measure people at risk of poverty.
The definition of the minimum wage in the EU is relative since it takes into account the median income. This is extremely important. The numbers you cited are global and significant. However, opinion surveys show that income gaps mainly concern people in the society in which they live. We must therefore examine how inequalities progress or regress in each society, which must guide us in choosing the measures to take.
In 2022, according to Eurostat, 8.5% of employees in the EU were at risk of in-work poverty. What is your analysis?
The idea of lifting people out of poverty through employment has sometimes encouraged the precariousness of employment with sub-status, part-time work, “mini-jobs” accompanied by minimal social protection, and salaries which do not protect against poverty. Basically, job precariousness is the price we pay for focusing on improving the employment rate, to the detriment of decent work.
Access to employment is obviously important in the fight against social exclusion, as well as a factor in the unemployed regaining their dignity, but it must not be to the detriment of the quality of employment and the salary level.
I understand that to encourage a return to work, and to avoid “employment traps”, we are advocating that people who receive social benefits can continue to receive them when they are working. However, this should not result in subsidising employers who pay poverty wages, which seems very problematic to me. We must progress on welfare and minimum income, which the EU is doing, and at the same time ensure minimum wages are set at a level which protects against poverty.
The fight against poverty in France is seriously hampered by the phenomenon of non-take-up of social benefits. Is this specific to France or is the same phenomenon at work elsewhere in Europe?
The most recent figures from researchers at Grenoble-Alpes University and the Department of Research, Studies and Statistical Evaluations (DREES) show that non-take-up to Active Solidarity Income (RSA) in France is reaching 34%, or more than a third of potential beneficiaries.
But the situation in France is not exceptional. In Belgium, this level reaches 46%. In other words, almost half of the potential beneficiaries of the Social Integration Income (RIS) do not benefit from it. In Spain, 57% of potential beneficiaries of the “Ingreso Minimo Vital” income did not benefit from it in 2020, according to official estimates; the figure is 35% in Germany.
On paper, social benefits in the EU appear generous and should cover most of the population, but in practice, it is the poorest people who do not benefit, because they do not have good access to information, cannot overcome administrative obstacles, or collect all the necessary documentation, etc.
Brussels, the European capital, is the poorest city in Belgium – according to national statistics, 38.8% of its population is “at risk of monetary poverty and social exclusion” (AROPE) compared to a national average of 18.7 %. These are households living below the national poverty line, i.e. 1,366 euros per month for a single person and 2,800 euros per month for two adults and two children. What’s your assessment of these figures?
This figure of almost 40% for Brussels is spectacular, but above all reflects the fact that there is a lot of inequality in the Brussels region. As elsewhere in Europe, the risk of poverty is defined as income below 60% of the median income.
This figure does not mean, fortunately, that 40% of Brussels residents cannot satisfy their basic needs, but it is a warning signal to be taken seriously. It means that specific public policies must be adopted in terms of access to employment for the long-term unemployed in particular, and specific measures for immigrant populations who are most at risk.
Does fighting against inequalities necessarily mean taxing the richest, fighting against tax evasion and targeting “super-profits”?
It is part of a range of tools, but taxation is not the only tool, of course. We can fight poverty and inequality by better financing public services. Paradoxically, public services that cover the entire population are easier to finance even if they cost more, because the middle class is ready to pay for a system from which they will also benefit.
Systems targeting the poorest are less popular politically. People do not want to pay taxes to help the poor, and in electoral campaigns, pro-poor speeches are not the ones that most appeal to the average voter. On the other hand, no political leader in Europe can question the universality of access to education and health care.
In May you published an essay entitled “Changing compass. Growth will not overcome poverty”. We see that proposals for a paradigm shift in the face of the climate crisis are hardly listened to. Do you feel heard?
Yes, people are looking for something else. A lot of attention is paid to the messages from many researchers around the world on the need to change the compass, and to no longer take GDP growth as a criterion for success.
Governments are late, as are politicians. They follow a 20th century logic focused on growth, on the right as well as the left. They discuss how to create growth and distribute its fruits, as in the 1960s and the 1970s. Politicians remain stuck in the idea that the solution to any problem must involve increasing monetary wealth. However, the economy cannot grow indefinitely, because its metabolism, its consumption of energy and resources, is meeting planetary limits.
I have received a lot of favorable feedback on this idea that we can fight against poverty other than through economic growth. No one has any doubts that fundamental changes are needed.
USEFUL LINKS
- The working poor: a human rights-based approach to wages
- EU must reduce poverty by 50% by 2030: UN expert
- Special Rapporteur on Extreme Poverty calls for the creation of a global fund for social protection during interactive dialogue with the Human Rights Council, June 30, 2021
- International Day for the Eradication of Poverty