Poverty and Social Exclusion in Europe: Place-Specific Patterns and Common Challenges

By Isabel Ramos Lobato & Sabine Weck

Almost one-quarter of the European Union´s (EU) population lives at risk of poverty or social exclusion according to official EU statistics. Children, the unemployed, women and ethnic minorities such as Roma are among the groups who are particularly affected. The dramatic increase in the number of affected individuals since 2009, and the growing disparities between and within EU Member States (exacerbated by the fiscal and economic crisis), have placed the fight against poverty and social exclusion high on political agendas across Europe. To raise public awareness and strengthen political commitment to combat poverty and social exclusion, the EU proclaimed 2010 as the 'European Year for Combating Poverty and Social Exclusion'. A headline target in the Europe 2020 strategy for smart, sustainable and inclusive growth is to lift 20 million people out of poverty and social exclusion.

Influenced by French debates, the concept of social exclusion became popular in the 1990s, and it changed European policy debates from solely focusing on material exclusion and income inequality to integrating social and cultural disadvantages. Though poverty and social exclusion are often coexistent or concurrent, reflecting the same underlying processes, they should be seen as different concepts. Although there is no universally agreed upon definition of social exclusion, there is widespread agreement that whereas poverty is defined based on income and distributional issues, the concept of social exclusion calls for a process-related, relational and multidimensional understanding. Social exclusion is about non-participation versus participation and thus relates to different spheres of integration, such as employment, housing, education, political voice and social participation, besides income. Poverty is frequently defined at the individual level, whereas social exclusion often relates to population groups. Income-related poverty and social exclusion are strongly linked, and they may be (geographically) co-located but not necessarily, because other contexts such as socio-cultural ones can compensate for, and mitigate, experiences of poverty and social exclusion.

Common trends and place-specific patterns

Both poverty and social exclusion have spatial dimensions that are reflected by locally distinct patterns of urban advantage and disadvantage. To explain the patterns and trends of poverty and social exclusion, the relationship between processes at different scales and the interaction between dissimilar mechanisms that influence individual prospects must be considered. There are broader mechanisms connected to poverty and social exclusion processes in Europe, although these lines of interaction can have very different manifestations at the local level. One mechanism is economic restructuring across European countries, which is characterized by a selective process of casualization that may be associated with reduced entitlements to social protection. Because of uneven economic development paths, however, some cities have managed industrial transformations more successfully than others. Thus, distinct patterns of social inequality and exclusion can be identified across European cities. The European welfare regimes are another mechanism that influences poverty and social exclusion patterns. The different regimes are characterized by dissimilar levels of decommodification and state redistribution. Although social protection is widely decoupled from employment in the Nordic countries, protection schemes in some central or southern European countries are highly polarized between a core group of well-protected workers and the more insecurely protected outsiders. Thus, the risk of poverty and social exclusion varies significantly between social groups and welfare regimes. However, substantial differences between countries that are part of the same regime can be identified. Education and housing policies (which are not considered in the classification), as well as the varying influence of local policy arrangements and locally specific resources, may reinforce or weaken processes at higher policy levels. Thus, depending upon the relationship between national and local policies, cities within the same welfare regime or even within the same nation-state may diverge significantly with respect to the main groups affected by poverty and social exclusion or spatial patterns of disadvantage.

Beyond the influence of broader trends, different risk factors at the individual level can be identified that impact poverty and social exclusion processes, such as employment status, educational qualifications, citizenship, age, ethnicity, disabilities, being a single parent, etc. Access to relevant institutions and services (defined in terms of geographic or symbolic distance) or stigmatization of the area where one lives may also reinforce or reduce societal inclusion. There is a long-standing academic debate about the extent to which the places where socially excluded people live influence social exclusion processes over and above individual risk factors, especially in areas of concentrated disadvantage. Most researchers will agree that space may be important but that it does not necessarily influence individual socio-economic prospects, because such influence depends upon individual characteristics, local policies and wider political and economic processes. National and local welfare regimes and public services and social network resources, for example, can be intervening factors. Moreover, research could show that material and social well-being are not necessarily related given that subjective well-being and quality of life depend upon a range of dimensions and that those who are statistically defined as 'poor' or 'socially excluded' may not necessarily define themselves as such. Thus, individuals may be excluded in one sphere and included in others, because it is always the overlapping of different risk factors in a given local context that causes social exclusion processes.

The impact of the fiscal and economic crisis

The financial and economic crisis has led to changing patterns of poverty and social exclusion in many European countries, but its impacts on cities and regions with less favourable economic and population structures and/or weak public welfare systems are far greater. Growing unemployment rates and precarious employment affect especially the most vulnerable population groups, such as the less qualified, immigrants or young people. However, although young people with lower qualification levels are still more likely to be unemployed, even those with a university education are not necessarily protected from unemployment or precarious employment. In cities and regions with weak economic development and shrinking employment markets, even well-qualified young people can have limited access to the labour market and be forced to migrate for better job prospects, which in turn increases interregional, national or European disparities.

In many European countries, there have been severe cut-backs in public spending in public sectors such as social protection schemes or educational programmes. Especially in countries hit hardest by the crisis, the forced adoption of austerity measures has a negative social impact that exacerbates the situation for vulnerable population groups. In many cities and metropolitan areas, local programmes are being cut to the most basic services. Thus, local experts report that austerity measures not only endanger the traditionally most vulnerable population groups but also increasingly impact people who used to have at least a minimum level of protection, such as young people or the lower middle classes. In particular, in Mediterranean countries, even middle-class families with medium and high education levels may face poverty and social exclusion given the increasing costs for housing, heating, food and education on the one hand and the concurrent reduction of state support and public services on the other hand. This crisis leads to shrinking family incomes that threaten families' capacities to support needy family members—such as young people—while at the same time, widespread austerity measures limit access to social protection outside the family and social network resources.

Policy challenges for combating poverty and social exclusion

It is very clear that no one policy or intervention can combat social exclusion, at either the national or the local level. At the national level, it is the welfare policy mix of prevention, support and activation that shapes and influences trends and patterns of social exclusion and inclusion. At the local level, there is a need for coherent action plans and a combination of civil society and public or private sector resources for effective action. Across all levels, there is a need to consider the place-specific interplay between different policies and their interaction with wider structural socio-economic processes, as well as a need for attention to the perpetuation of spatial disparities.

Effective policies depend upon reliable data to analyse and monitor social exclusion and poverty and the processes that are linked to both of these problems. However, for different reasons, it remains difficult to capture these processes statistically. On the one hand, given their small-scale nature, available regional or city-wide data can illustrate disparities within regions or cities, but they fail to provide policymakers with a clear picture of poverty and social exclusion processes. Thus, data on less aggregated levels are needed to identify the small-scale processes at work. On the other hand, based on the availability of data, sampling is often reduced to indicators of income or employment without capturing other important domains of social exclusion, such as political participation. However, because of the cumulative and multidimensional nature of social exclusion processes, it is always the combination of the various dimensions of exclusion that increases vulnerability and, thus, needs to be captured.

The EU's target-setting process in the Europe 2020 strategy has had a positive impact on the attention given to poverty and social exclusion issues across the Member States and has raised social awareness and commitment. Nevertheless, although some European countries have been able to reduce the number of people at risk of poverty and social exclusion, others seem to be further removed from the goal of social inclusion relative to the pre-crisis situation. In some countries, the economic and financial crisis has had dramatic repercussions on labour markets and available jobs. Reductions in public expenditures for social policies have likewise limited the capacity and the scope of local actors to promote social inclusion actively in many places. This is the experience of many European countries. Six million more people were at risk of poverty or social exclusion in 2012 relative to 2010 (Eurostat). Thus, there is a greater need than ever for more ambitious target setting to combat poverty and social exclusion at all levels of policy-making.

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