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EU policies producing poverty and unemployment

By Sarah Mac Donald - 31 March, 2014

New study reveals disturbing levels of poverty and deprivation in seven EU countries.

Social Justice IrelandA new seven-country study shows EU austerity policies producing increased poverty and unemployment according to Social Justice Ireland.

The study, which is produced by Social Justice Ireland for Caritas Europa, shows an extremely negative impact on the lives of vulnerable people, and reveals that many others are being driven into poverty for the first time.

The report, ‘The Economic Crisis and its Human Cost – A Call for Fair Alternatives and Solutions’ reveals disturbing levels of poverty and deprivation in the seven EU countries worst affected by the economic crisis: Cyprus, Greece, Ireland, Italy, Portugal, Romania and Spain.

“The prioritisation by the EU and its member states of economic policies at the expense of social policies during the current crisis is having a devastating impact on people, especially in the seven countries worst hit,” Dr Seán Healy, Director of Social Justice Ireland, said.

He warned that “the failure of the EU and its member states to provide concrete support on the scale required to assist those experiencing difficulties, to protect essential public services and create employment is likely to prolong the crisis”.

The report is the second annual edition in a series of in-depth examinations of the impact that current policies are having on people in the EU countries worst affected by the economic crisis.

It outlines the policy measures and trends across the seven countries and documents the growing number of people struggling with poverty and social exclusion.

The report presents a picture of a Europe in which social risks are increasing, social systems are being tested and individuals and families are under stress.

It strongly challenges current official attempts to suggest that the worst of the economic crisis is over.

It highlights the extremely negative impact of austerity policies on the lives of vulnerable people, and reveals that many others are being driven into poverty for the first time.

“Cuts to public services such as healthcare have been a feature of European countries affected by the crisis. These cuts impact most on those who are vulnerable and on low incomes. They are likely to result in increased health and social costs in the longer term” according to Michelle Murphy, Research and Policy Analyst with Social Justice Ireland.

“Negative health impacts are accumulating in countries that have been severely affected by the economic crisis. This is as a result of cuts to health expenditure and increased charges for health services which could have disastrous consequences for individual and public health,” she said.  

The main findings concern unemployment, youth unemployment, child poverty, in-work poverty, financial distress and healthcare.

In relation to unemployment, the report notes that it has now become a structural problem in many countries across Europe.

Ireland has had a 6% decline in its labour force since the onset of the crisis, one of the largest among OECD countries.

The SJI report warns that Ireland has a significant problem with long-term unemployment and the OECD predicts that structural employment in Ireland (which increased significantly between 2008-2012) will increase further.

On the issue of youth unemployment, it reveals that nearly a quarter of economically active young people in Europe are unemployed.

The threat of long-term unemployment and inactivity is exposing young people in Europe to poverty, material deprivation and the possibility of wage scarring throughout their lives.

Ireland has a very high rate of youth unemployment and one of the highest NEET (i.e. not in employment, education or training) rates in the EU.

The ‘at risk of poverty rate’ of young adults (18-24) in Ireland almost doubled between 2008 and 2011 and stands at 26.7%.

The lack of employment opportunities for young people in Ireland combined with high levels of poverty and material deprivation will have significant long-term social and economic costs.

On child poverty, ‘The Economic Crisis and its Human Cost – A Call for Fair Alternatives and Solutions’ report highlights that one fifth of Europe’s children are living at risk of poverty. 

In Ireland, 17% of children are ‘at risk of poverty’ and 30% of children are suffering from material deprivation.  These children are less likely than their peers to do well in school, enjoy good health or realise their full potential.

The working poor represent one third of adults of working age at risk of poverty in Europe. The ‘at risk of poverty’ rate for people employed across the EU is now almost 10%.

In Ireland more than 5% of people who have a job do not earn enough to protect them from poverty.

Financial distress among households affects one in four people in the lowest income households; by contrast it only affects one in ten people in highest income households.

Ireland’s share of people living in lower income quartile households experiencing financial distress was over 30% in March 2013, well above the European average.

On the issue of healthcare, the study shows negative health impacts reported due to cuts in healthcare budgets in Greece and Spain and says these should act as a warning of what may be in store for Ireland if the ad hoc cutting of the healthcare budgets continues.

In Budget 2013, 5% of the total healthcare budget was cut, despite serious concerns being raised as to the potential damage to necessary services and reductions in access for certain groups.

The full study may be accessed here: http://bit.ly/1puPFrM

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