Guide Working Poverty in Europe (Work and Welfare in Europe)

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In general the risk is higher for single households sole earners, especially women with dependent children , young workers and temporarily employed people as well as those with low levels of education. Paradoxically, men face a higher risk than women, even though women are more often in part-time employment with a lower salary.

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Yet women are more often secondary earners, meaning that the household income does not depend only on them. At EU level, the Europe strategy aims to lift 20 Mio. In its Annual Review on Social Developments in the EU the European Commission clearly pointed out the need to address the increase and risks of in-work poverty. During the term, the European Parliament raised awareness of the issue in several resolutions such as Strengthening the social dimension to the EMU or Role and operations of the Troika. This keysource presents a selection of reports and studies in the field.

Most publications analyse the relationship between of economic vulnerability and disposable income. Others shed light on the impact of social benefits, minimum wage and household composition on in-work poverty. In-work poverty. This paper explains what the issues at stake are and gives an overview of the current debate. It analyses the factors that lead to in-work poverty and investigates the link between low pay and low work intensity at household level, concluding that this is where work intensity needs to be increased.

Employment and Social Developments in Europe European Commission, 21 January , p. Chapter 2 p. Moreover, the report compares the performance of different national policies in EU Member States. Working poor in the EU. Eurofound, , 41 p. This study compares the extent of in-work poverty in 27 EU countries and concludes that in-work poverty has not been a policy priority in all but six EU countries.

In-work poverty and labour market segmentation in the EU: Key lessons. This report analyses structural factors that lead to in-work poverty such as a high segmentation of the labour market. It highlights that there was little debate in Member States on the topic and that national policies were often either lacking or not far reaching enough. It concludes that national policies should focus more on improving the quality of jobs and on raising pay levels.

Working poverty in Europe : a comparative approach. Available in the Library, Shelfmark S This book provides a comprehensive comparative analysis of in-work poverty in Europe.

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It presents different case studies from countries such as France, Spain, the United Kingdom and Poland and identifies the various dimensions of in-work poverty. It finds that low pay rates for full-time jobs are substantially higher for women whilst income poverty rates are much higher for men than women.

It assumes that low pay is a question of age in many EU countries with young people being stronger affected. Why are some workers poor? This article explains the role welfare regimes play in increasing or decreasing in-work poverty through national policies and takes a very close look on the impact of family policies. Germany has a booming economy but most Germans are not particularly wealthy. Germany's prosperity has often been pinned on its form of business responsibility known as the "social market economy.

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COM has chosen English as your language setting. COM in 30 languages. Deutsche Welle. The poor have access to university only through relatively few highly competitive scholarships. The lack of access to levels of education that are highly valued on the market tends to prolong existing inequalities in earning prospects between the poor and non-poor and to create the probability for the intergenerational transfer of poverty [ 11 ]. As a conclusion, we can reiterate that a considerable number of Croatian citizens, particularly the unemployed and inactive persons, suffer from a poor financial situation, adverse social and living conditions and absence of suitable access to public goods and services.

Due to the long-lasting economic recession from to , increased unemployment and budgetary problems, there was further deterioration of the social position of significant number of citizens. In order to alleviate the consequences of the crisis, the government is proposing and implementing various measures regarding economic, fiscal and particularly social welfare policy. The eradication of poverty is an ethical and moral imperative rooted in the principles stipulated and respected by the United Nations UN. It is, also, a part of various important international documents such as the Millennium Declaration and the Millennium Development Goals of the UN, as well as documents related to the European principles of solidarity and the welfare state such as the European Social Charter.

To live a life free from poverty and hunger is one of the human rights and fundamental freedoms incorporated in the Universal Declaration of Human Rights. The Croatian Government is also active in the eradication of poverty, which is obvious in various strategic documents like the Joint Inclusion Memorandum of the Republic of Croatia from , Strategy for Combating Poverty and Social Exclusion in the Republic of Croatia — and National Reform Programme The current social welfare protection system in Croatia is a mix of old and new programmes.

It has been frequently changed due to the altering social opportunities and conditions with the intention to ensure more efficiently the provision of social transfers and needed services. Croatian social welfare system consists of three basic components: cash aids, benefits and services in kind and a variety of foster care and residential programmes.

According to the statistics maintained by the Ministry of Demography, Family, Youth and Social Policy, there are various financial transfer benefits as well as numerous types of in-kind assistance provided. Furthermore, most local government institutions and bodies as well as many NGOs provided financial aid and services for various groups of citizens like poor, disabled and infirm persons, the elderly and so on. Money aids financed on a much larger scale than in-kind benefits and services, although there are a relatively large number of recipients of the latter.

In fact, this is deceptive because the main in-kind programme is the assistance in covering costs for public and communal services. The evaluation [ 22 , 20 ] has shown that financial outlays inside the large programmes pensions are less directed towards helping the poor, while those programmes on which fewer expenditures are spent welfare benefits are more strongly oriented to the impoverished.

Nevertheless, said outlays in Croatia were higher than in other transition countries with the exception of Hungary and Slovenia and similar to the ones in the Czech Republic and Poland. Since , because of economic crisis and deterioration of the situation on the labour market, there was an opposite trend of growth in the absolute amount of the mentioned expenditures and increase of their share in GDP to Comparing data on the share of social protection expenditures in the national GDP with the share of such expenditures in the GDP of the other EU member countries, Croatia ranks 18th, lagging by 8.

The means of subsistence represented the amount of money necessary to satisfy the basic needs of the observed household. They were defined as a sum of individual contributions depending on the traits of the household members. When calculating means of subsistence, children, the elderly and disabled people were automatically accounted; working-able persons in the age between 18 and 65 years were not included into account unless they did satisfy the conditions for being treated as unemployed.

According to Urban and Bezeredi [ 17 ], the poorest decile seems to have benefited the most from changes in means-tested benefits and in particular from the increase in the subsistence benefit levels.

On the other hand, the simultaneous introduction of a cap in this benefit, set at the level of gross minimum wage, had a negative impact on the second income decile. The scheme has been amended in September with some changes taking effect immediately, and the others set were implemented on 1 June The ZMN is a national scheme, means-tested and asset-tested.

Croatia spends about 0. A number of sources of income, including a range of other benefits, are not taken into account when considering eligibility for ZMN. For those capable of work, receipt of ZMN is conditional on being available for and actively seeking work. Although subject to review and adjusted in the light of changing circumstances, there are now no time limits of the receipt of ZMN, even for those who are capable of work, a change introduced in September Those who find work can continue to receive ZMN, in decreasing amounts, during the first 3 months of employment.

Mentioned changes from have improved the situation for single persons and single-parent households but couples with children, even if in receipt of child benefits, receive less under the ZMN scheme than under the previous social assistance scheme. Coverage of the ZMN scheme is low and has not increased significantly during the crisis.

There is no specific arrangement for the transition from unemployment-related benefits to ZMN benefits. Unemployment benefits received in the previous 3 months are included as income to be taken into account when assessing a claim as is income received from active labour market policies.

There is, however, provision for a tapered withdrawal of benefits on return to employment. Pursuant to the provisions of the Job Placement and Unemployment Insurance Act, unemployment insurance in Croatia includes among other unemployment benefit UB. Unemployed persons acquire the right to UB provided they had worked 9 out of 24 months prior to termination of employment and that such termination was not caused through their own fault or will. Depending on the total years of service, an unemployed person may claim UB for a period from 90 to days. The basis for determining the UB amount for a person whose work relationship has been terminated is the average salary earned in the 3-month period preceding the termination of employment reduced by statutory contributions.

Thus, the net replacement rate the share of the average unemployment benefit in the wage before unemployment for the 6-month period was In comparison with other EU member states, UB in Croatia has relatively low replacement rate and very low coverage rate [ 25 ].

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According to calculations, in Croatia regarding this issue, vulnerable families are those in which an employed member earns a low wage or salary, families that receive all types of available benefits and social assistance, families with only one adult member who works and families with more children. The most significant determinants of the marginal effective tax rates are social welfare subsistence and unemployment benefit.

There are some local benefits like housing benefit and lump sum assistance directed towards the poor population. Local self-government LSG finance and disburse such benefit and determine income tests and amounts of benefit. Since January , it is explicitly defined that the beneficiaries must be receivers of subsistence benefit now Guaranteed Minimum Benefit.

The recipients of such benefit also have the right to claim the benefit for covering the wood-heating costs, which is also administered and financed by LSG units.

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Although there are various measures oriented towards the poor and vulnerable, combination of such measures targeted towards in-work poor is still missing. Despite relatively high expenditures, most of the benefits in the social welfare systems are low. This is particularly so in the case of social assistance benefits today Guaranteed Minimum Benefit and unemployment benefits. The social protection system is mostly public, but there is an increasing privatisation in some social protection sectors the pension and health systems and service provision in the social services system [ 27 ].

As a part of active labour market policy, in the period —, the Project Training for Employment for Workers Facing Unemployment and Long-term Unemployed Persons and other groups unfavourably positioned in the labour market was realised. It included surplus employees, workers facing the threat of layoff and long-term unemployed persons. The main objective of the project was to provide support in the implementation of active employment measures, and its purpose is to increase the level of employability of surplus workers and long-term unemployed persons through vocational training for employment.

The Ministry of Labour and Pension System, in collaboration with its implementing body which is the Croatian Employment Service, during , promoted fiscal relief for hiring long-term unemployed persons in accordance with the stipulations of the Employment Incentives Act. Active labour market policy programmes are continuously being implemented in accordance with the Guidelines for Development and Implementation of the Active Labour Market Policy. Due to the circumstances in which employment of long-term unemployed persons is becoming more difficult, a special focus of measures is oriented towards their activation through additional education or employment based on facilitated criteria and greater aid intensity.

Contracting of active labour market policy projects financed by the European Social Fund commenced at the end of The Strategy for Combating Poverty and Social Exclusion in the Republic of Croatia — indicated priorities and corresponding primary objectives within eight strategic areas. Education and life-long learning are specified as an area of long-term priority, followed by employment and access to employment; adequate housing and availability of energy; access to social benefits and services; access to the health system; efficient care for the elderly people; the fight against indebtedness and promotion of financial independence and balanced regional development.

Each strategic area includes several main strategic activities and the methods of their implementation, which are presented in more detail within a 3-year implementation programme on the national level. In accordance with the main goal of the Strategy Europe , Croatia aims to reduce the number of persons at the risk of poverty by 1,50, by This is based on the assumption that the economy will grow, the trends on the labour market will be positive and that there will be conditions for the opening of new workplaces.

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  5. Furthermore, it has planned to implement the labour policy measures oriented toward the long-term unemployed and other vulnerable groups the youth, persons with disabilities, the Roma. Additional efforts are dedicated to improve the adequacy of social benefits in the social welfare system, the accessibility and uniform availability of the various social rights and services like education, health care, social welfare and others. Finally, attention is given on the availability of housing, the reduction of regional differences and the prevention of indebtedness and financial dependence.

    In the achievement of the strategy goals and the implementation of related measures and activities, further principles are respected and followed: a multidimensional approach to dealing with the problem of poverty; solidarity and the principle of non-stigmatisation; subsidiarity principle; objectivity in the planning of measures based on clear indicators; coordination and equal and synergetic participation of all stakeholders in strategy preparation and implementation and an innovative social policy approach.

    The government is fully aware of the importance of lifelong learning as a precondition for successful employability and sustainability on the labour market, the fulfilment of personal potential and development of active citizenship. A central role in the implementation of the lifelong learning policy belongs, among others, to adult education, which represents a key component of the lifelong learning continuity. The share of persons between the ages of 25 and 64 participating in education and training in Croatia is only 2.

    The government believes that employment is the best route out of poverty. It is committed to reduce poverty and dependency on social welfare benefit system and to help unemployed people in finding work and support themselves and their families. Continuation of the implementation of reform measures in this area aims at enhancing the efficiency of the system of social benefits, further stimulation of employment of unemployed and activation of inactive persons, strengthening transparency of the system and increasing the adequacy of social welfare benefits.

    Percentage of people in work and below the poverty threshold remains unchanged

    This is achieved with consolidation of social benefits through the development of the mentioned Guaranteed Minimum Benefit and the One Stop Shop. However, a substantial body of research has shown that that the governments are not able to solve mentioned issues on their own. What is more, there is no single model for poverty reduction that is optimal for and applicable in all societies.

    What the government should and could provide is a stable legal framework, social infrastructure that, with the co-operation of its citizens, would establish the rule of law. Croatia, as each and every other country, has to find and develop constitutional and legal arrangements that best suit its own historical, social, cultural and economic situations, conditions and possibilities. Otherwise, the poor will suffer most from the lack of a clear legal framework and unwillingness of other parts of the society to respect the rule of law. It is important to enforce and strengthen the current legal framework rather than pursue further changes in the legislation and the organisational structure.

    However, in order to make the laws work, political will and leadership commitment is vital, just as important is the empowerment of citizens and their full participation in the political and decision-making process. The society and state have to be committed to the reduction of poverty. The right way to solve problems of destitute citizens is not by punishing the rich but by doing more to support the poor to become more affluent. Regarding labour activity, for the poor citizens, it is crucial to create preconditions for equal and successful access to the labour market.

    This can be realised with activation and integration as well as adequate support and targeted efforts in enhancing social inclusion and mitigating adverse personal and social consequences of unemployment. This means not only empowering the bonds of trust and mutual respect among all citizens in the society but also equipping poor citizens by increasing their social capital and employability.

    This can be accomplished by enhancing their skills, knowledge, attitudes and values, which will enable them to be successful in equal participation on the labour market. A primary goal of economic and social policies must be to get people into work or back into work. For majority of welfare benefit recipients, dependency on social welfare support cannot provide an adequate alternative to regular employment regarding material well-being and psychological satisfaction.

    One of the most important priorities of economic policy in Croatia currently represents the increase in employment, with the goal to solve the problem of low employment rate.

    see url There is a strong link between low educational attainment, inadequate employability, long-term unemployment and poverty. Many of the poor and long-term unemployed have multidimensional problems that often include a low level of education attainment and motivation. The issue of long-term unemployment in Croatia is very serious and although there was a respectable improvement in active and passive labour market policies, there is still a scope for their further enhancement. Sometimes, it seems that unemployment problems could be resolved immediately, if only there were enough available financial resources for implementation of various employment measures.

    That means to insure appropriate emphasis and orientation on the long-term unemployed and those with a low level of employability. Furthermore, a coherent framework of employment measures is essential and needed with clearly defined components, which empower each other in resolving the issue of long-term unemployment and help people who can become long-term unemployed.

    To improve the design and implementation of the active labour market policy measures, the evaluation of effects of performed activities can be of great benefit. Thus, available financial resources are directed to those participants and programmes where there is the biggest benefit and the largest investment return. Next to the improvement of employment opportunities, there is a need to enhance reconciliation of family life and work, primarily related to the inclusion of kids into adequate and affordable preschool institutions.

    Furthermore, it is essential to reinforce the social safety net and welfare system through a better design, amended targeting and monitoring the effects of social welfare measures. Finally, it is vital to empower non-governmental sector in the provision of social services and decentralise some social services to the lower level of the government.