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Fighting social exclusion in rural areas

[ Summary ]

 

Chapter 1:
Social exclusion, a multidimensional phenomenon

 



1.2 How does the structural trend of
employment in Europe generate poverty?

 

In other words, to what extent does the mismatch between labour supply and demand in Europe, the cause of unemployment, create poverty?

Between 1945 and 1975, Western Europe witnessed economic growth essentially based on the concentration of businesses. The considerable gains in productivity that resulted from this provided more or less full employment in the industrialised countries. But for the past twenty years or so, technological progress, the globalisation of the economy and, more recently, of information have called into question this situation. After agriculture and the primary sector as a whole, the major firms in the secondary sector have stopped creating jobs.

Today, the only sector that has the potential to create jobs is the service sector, in addition to the precision instrument manufacturing industry [8].

Consequently, the labour market has become much more demanding in terms of training and professional experience. For unskilled people, the prospect of being hired (in the past, agriculture or industry supplied work) continues to dwindle. As for skilled young people who have no professional experience, finding work is difficult.

Therefore, unemployment tends to affect the same people and the same social categories, which is why long-term unemployment is so high. People who have been without a job for one year or more account for about 5% of the working population of the European Union and up to 12% in Spain, 8% in Italy, and 7% in Ireland. According to EUROSTAT, nearly half those unemployed were without work in 1996 and 30% had been jobless for more than two years. The social categories most affected by long-term unemployment are generally:

  • young people - unemployment is twice as high among young people as in older age groups (up to four times in France and Greece), although these past few years there has been a decline in the number of young people without work and a rise in unemployment among older people [9];

  • women - the relatively sharp increase in employment of women between 1995 and 1998 did not prevent the average rate of unemployment among women in the Union from remaining high during this period, on average 3% above the rate for men.

To what extent is long-term unemployment a factor of poverty?

From solidarity among family members to State assistance, various welfare mechanisms help cushion the effects of long-term unemployment. But quite often it is the entire family that is affected by long-term unemployment. In 1996, the proportion of households with children where neither parent worked varied from 8% in Italy to nearly 20%, or one family out of five, in the United Kingdom [10]. Single-parent homes (the parent usually being a woman) also constitute the highest proportion of low-income people in most Member States [11].

As for State assistance or welfare and unemployment benefits, there are limits. For example, unemployment benefits stop after a year in most countries of the Union, leading those who are still without work at the end of this period to take any kind of work or to live on income support in countries where that exists.

Sometimes contradictory trends emerge from the comparison between social indicators and unemployment trends. Thus, in the United Kingdom, a country whose unemployment rate has substantially declined these past few years (8.2% in 1996 compared with 10.5% in 1993; respectively 6.5% and 8.1% for women), the income indicator shows that in 1995-96, a quarter of the population and 34% of the children were living below the poverty level [12]. Several reasons explain this paradox:

    1) the income indicator measures the inequalities more so than poverty - when higher-than-average incomes increase as a result of economic growth, the median income increases from a statistical point of view. However, this does not prevent an increase in the poverty level, for the real income of the disadvantaged social categories remains unchanged. More than the spread of poverty, it is therefore the phenomenon of social “polarisation” that is the problem. Thus, these past few years, absolute poverty in Europe has declined, among other reasons because of a certain growth in employment, and relative poverty has steadily increased;

    2) the rise in poverty distorts unemployment-lowering mechanisms - among the disadvantaged classes, the demand for jobs has gone down because unskilled workers become discouraged over time and end up no longer applying for jobs. This alters the unemployment rate but does not affect the social indicators of poverty/exclusion;

    3) finding a job is no longer enough to climb out of poverty - job creation currently consists often in an increase in underpaid jobs with no prospect of a career and unsteady and short-term jobs.

Therefore, the question that arises is the following: is it possible to get out of the spiral fuelled by “low wages - unsteady employment - job stagnation” which is plunging a growing number of individuals and families into poverty? In other words, what institutional support measures are relevant today when we talk about integration or inclusion, given the inadequate anti-poverty mechanisms whose only method is to put people back to work?

 


[8] European Commission, Directorate-General
for Employment, Industrial Relations and Social Affairs,
Employment in Europe, 1997, p. 55-58

[9] Idem, Part 1, section 1, Recent employment
and unemployment trends, pp. 27-41

[10] The Economist, September 25th-October 1st.
1999, p 50

[11] See EUROSTAT, Statistics in brief, op. cit.

[12] The Economist, September 25th-October 1st.
1999, pp. 49-50



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