On March 1st of 2016, the Dutch Social Cultural
Planning bureau (SCP) – in cooperation with the Dutch Central Bureau for Statistics
– presented its annual report upon poverty and long-term poverty in The
Netherlands.
Although the poverty figures were not really extreme,
they showed beyond a reasonable doubt that the crisis had deteriorated the
financial situation of many Dutch people and families. On top of that, ‘some of
the usual suspects’ had indeed a bigger chance of dropping into long-term
poverty than other parts of the Dutch population.
Here is a large share of the English summary that the SCP
put on its website, accompanied by my comments, where applicable:
The
most recent economic recession, which began in the final quarter of 2008 and lasted
until the middle of 2013 was accompanied by a substantial rise in poverty in
the Netherlands. The number of people living in households with a lower
disposable income than the norm amount needed to meet basic needs (such as
housing, clothing and food) grew over that period from just over 600,000 to
more than 850,000. If that norm amount is increased to allow for (minimal)
expenditure on leisure and social participation, the increase is even more
pronounced: the number of people with a household income below this ‘modest but
adequate’ threshold increased from around 870,000 in 2008 to 1,255,000.
Long-term
poverty also rose over that period, though this only became fully apparent from
2011. According to the ‘basic needs’ criterion, there were 169,000 people
living in long-term poverty in 2011, and 316,000 according to the ‘modest but
adequate’ criterion; by 2013 these figures had risen to 226,000 and 410,000,
respectively.
My comments: When these figures are compared with the total Dutch population of
17,000,000, the poverty percentages are 5% (for people not even meeting the minimum
threshold, aka the basic needs criterion) and 7% (for the modest, but adequate
criterion). According to these same criteria respectively 1% and 2% of the
population suffers from long-term
poverty.
Families living below the
modest, but adequate criterion might not seem like a big thing to some readers.
However, this means that children in such families f.i. cannot participate in
school trips and extracurricular activities or cannot be member of one or more
sports clubs, as the means for membership and sports clothes are not present.
Especially for young children
this can easily lead to social exclusion and to the development of an unhealthy
lifestyle: a life behind the television, in combination with poor quality (fat)
food, snacks and insufficient mental and physical exercises and trainings.
All too often, such underprivileged
families take poor education and underqualification of their children for
granted, which causes to these children a bigger chance of leading a life in
poverty themselves, or causes them to get quicker access to criminality as an
easy way out of misery.
Of course these same effects
are even stronger within families that do not even meet the basic needs
criterion, especially when it comes to such important things like basical
clothing and nourishment.
Subsequently, the SCP summary
contains a clarification about the used methods for setting the long-term
poverty rates, which I don’t print for reasons of conciseness of this article. The
SCP explains that the aforementioned figures in the first paragraphs are at the
lower side of the poverty scale and probably too low. They tell about a third
method of measuring, the ‘episodic’ method, which yields more accurate results,
in their opinion:
We
used a third variant which takes this into account and which therefore offers a
more reliable measurement of the extent of the problem. We term this the
‘episodic method’. Here, we look for each reference year at both the two
preceding and the two ensuing years. We then find that the percentage of people
in long-term poverty averages just under 55% of the total poor population. In
the most recent reference year (2011), almost 600,000 people (58%) were in this
position.
Based
on the episodic method, the share of people in long-term poverty dominates
among the total poor population. As stated, over half (just under 55% on
average) of poor people have been in poverty for three years or more. Those who
have been in poverty for only one year account for just a fifth of the total
(the remainder are people who have been in poverty for two years). These
findings are based on the modest but adequate criterion; if the stricter basic
needs criterion is applied, the share of people in long-term poverty is
substantially lower (40-45%), while the share of people in short-term poverty
goes up slightly (around 25%).
My
comments: If this third method of calculating long-term poverty
is indeed more reliable, than these results are quite worrisome. It means that
55% of the people, who are living below the modest, but adequate criterion, do
that for a number of years in a row (i.e. around 700,000 people) . And although
the number for the structural ‘below basic
needs’- poverty is significantly lower, with 40-45%, it is still a considerable
number of around 400,000 people.
While a short period of poverty can be overcome by most
people, a (much) longer duration of poverty leads to a situation of despair and
hopelessness for the people involved. Besides that, it leads to people and families
eating into their non-monetary possessions and using their durable consumer
goods until they break down in the end, without having proper possibilities to
replace them in time.
Clothes become just too old or too small for growing
children, washing machines, televisions and flat-irons break down and can
hardly be replaced by new ones. And so people become more and more encapsulated
in a poverty trap from which escaping is hardly possible.
In
earlier research, Achterberg and Snel (2008) investigated whether poverty was
becoming a more temporary or more entrenched phenomenon. They concluded that
the latter was the case, identifying an increase in the proportion of people in
long-term poverty (using the foresight method) between 1984 and 2000, while the
percentage in short-term poverty remained more or less unchanged. Despite a
number of differences compared with the study by Achterberg and Snel, we reach
the same conclusion in our study for the period from 2000 onwards. The share of
people in long-term poverty increased between 2000 and 2013, while the
percentage in short-term poverty remained stable.
On
the other hand, the growth in the share of people in long-term poverty appears
to be due mainly to the economic recession at the end of our study period;
until 2008 there were only slight fluctuations. There was also a visible link
to the economic cycle in the 1990s, when the percentage of people in long-term
poverty rose during the 1991-1993 recession before falling back again to its
original level. Given these findings, we may conclude that long-term poverty
has increased temporarily, but that there is also a substantial possibility
that it will fall again as the economy picks up.
My
comments: It might be that the rate of long-term poverty is indeed
correlated to the situation in the economy, as these snippets argue, but the
outlook for the coming years is nevertheless quite unfavourable for the
long-term unemployeds at this very moment.
A. the economic crisis that started in 2008 is more and
more turning
into a depression that could stay with us for a long, long time. Apart
from being an economic crisis, the current depression is a mood crisis. And as
long as the moods of the people in The Netherlands stay bleak, the outlook for
the whole consumer economy remains bleak too. This will undoubtedly have a
negative effect on consumption and demand for labour.
And B. the automation
and robotization of moderately complicated administrative, financial,
commercial and manufacturing jobs is a development that is gaining momentum by
the day. At this moment more and more of such jobs are at stake, as a
consequence of this automation/robotization. while there are few new drivers
for new and different jobs.
The fact that in The Netherlands the fixed contract is more
and more becoming a thing of the past, in favour of freelancers (i.e. ZZP’ers
in Dutch) and workers with (often very unfavourable) flexible or zero-hour contracts
– so-called flex-workers – is also an important factor in causing temporary or
long-term poverty.
Over the last ten years more and more people (roughly 1,000,000)
became ‘independent’ freelancers – quite often in name only, however, as they
have often only one principal and one assignment. The hourly rates, as well as the
duration of such assignments for these freelancers are both still under fierce
pressure from cheap workers from outside The Netherlands (or the European
Union).
This will undoubtedly have added to the elevated
poverty in The Netherlands since 2008, as “having no assignment” means often “having
no source of income” at all, except for welfare eventually (when all else
failed and privately owned sources of wealth have been depleted in the meantime).
Particularly as most freelancers – especially the ones
with the lower hourly rates and shorter contract periods– don’t have a proper safety
net in place to guard them against non-employment for a longer period. The ‘freedom’
of being a freelancer can so easily turn into the worries and despair of being
unemployed, without receiving unemployment benefits.
As a consequence of the neoliberal/neoconservative
winds that are blowing over The Netherlands and Europe, the patience and
compassion with ‘people living at the edge’ have strongly diminished. “People need
to be responsible for their own lives and they need to pay for their own
mistakes” are some of the platitudes that can be heard in such neoliberal
circles.
These neoliberals often conveniently forget that
many (now) freelance and flex-workers did not have a proper choice,
when they chose for an uncertain life as freelancer or flex-worker, as they were often forced to become one at
gunpoint – in this case job-loss. And on top of that, the same people forget that
the poverty trap is extremely difficult to escape from and that poverty in
general can become a generational problem, haunting whole families.
All these factors could mean that the current elevated
long-term poverty could stay with us for quite a while.
There
is currently a debate in the field of sociology, in which one camp argues that
poverty today is mainly the result of people’s own choices and personal life
events, which means that everyone can on occasion be briefly confronted with
poverty. Others counter this by arguing that there is a growing division
between the disadvantaged and more privileged sections of society and that
certain groups encounter long-term poverty much more often than others. In this
study – without wishing to test the veracity of either claim – we explore both
sides of this debate.
To
test the claim that everyone in the Netherlands today could occasionally be
confronted with a (short) period of poverty, we investigated whether different
sections of the population are at equal risk of being in poverty for just one
year. A distinction was made by household type, main source of household income
and ethnic background. The outcomes suggest that the risk of short-term poverty
is greater for people without children or with grown-up children, people in
households where paid work (salaried or self-employed) is the main source of
income, and persons with a native Dutch background. The probability is much
smaller for single people and single-parent families or couples with young
children, who relatively often encounter periods of poverty lasting more than a
year. This also applies for benefit recipients and non-Western migrants.
To
answer the opposing question, i.e. whether there is a concentration of
long-term poverty in certain sections of the population, we performed similar
analyses and looked at the chance of being poor for at least three years. In
line with the foregoing results, couples without (young) children, households
living mainly on income from employment and Dutch natives much less often face
a period of long-term poverty than households with young children, benefit
recipients and pensioners and non-Western migrants.
Closer
analysis reveals an interaction between family composition and ethnic origin:
as stated, the presence of young children is associated with a higher risk of
long-term poverty, but this effect is much stronger for non-Western migrants
than for Dutch natives or Western migrants. Non-Western migrants with children
face long-term poverty significantly more often than Dutch natives or Western
migrants with children, and also than non-Western migrants without children.
Finally, a caveat needs to be applied for pensioners: although they are at
heightened risk of long-term poverty, the chance that they will fall into
poverty in the first place is relatively small.
It can hardly be a surprise that especially people from
ethnic groups are more vulnerable for long-term poverty than native Dutch
people. Although (in my conviction) straightforward racism is seldomly the
cause for unemployment and poverty among ethnic groups in The Netherlands, these
ethnic groups have often more difficulties in finding a job at
their level of education. On
top of that, their
education itself is also quite often below their capabilities. Also general unemployment is much higher among
ethnic groups in The Netherlands than among native Dutch people.
One cause could lie in a combination of latent racism
and undisputed prejudice, which dictates that people and children from ethnic
groups are less smart and/or less talented and/or less reliable and/or less
energetic (strike where applicable) than children of native groups.
This leads to the phenomenon that in case of two equal
candidates for a certain job (one native Dutch and one ethnic candidate), both with
the same skill-set, the one with the native Dutch name is chosen at
the expense of the ethnic candidate.
A comparable thing happens often at the preliminary
school or the secondary school: when an ethnic child by itself is qualified for
a higher grade secondary or vocational education, teachers in many occasions tend
to chose for a lower grade education “to be at the safe side”. By doing such
thing, they deny such a talented child the education that would suit him best and
bring his talents to the forefront.
Both situations are of course strong catalysts for a
trip towards long-term poverty; especially in tough economic times.
If
we look at the trend in long-term poverty in different sections of the
population, we find that some groups have faced poverty more often than others
over time. Couples with children living below the poverty line are an example:
the share of long-term poverty in this group rose between 2005 and 2011 from
just over half to almost two-thirds. This group have therefore easily surpassed
single-parent families, traditionally the group at greatest risk of long-term
poverty. As regards main source of income, the figures show that people in paid
work are less often long-term poor than benefit recipients or pensioners.
However, the share of long-term working poor has increased sharply: in 2005,
40-45% of all working poor had been poor for at least three years; in the 2011
reference year, this had increased by around ten percentage points. Finally,
the extent of long-term poverty has also increased among poor non-Western
migrants, from just under 60% in the 2005-2006 reference years to around 67% in
2010-2011. This increase was relatively limited among Dutch natives and Western
migrants, in both cases rising from around 50% to just under 55% of the total
group of poor.
My
comments: I think that these data speak for themselves, in
support of my aforementioned comments.
This is a not very surprising, but nevertheless alarming
report from the Social-Cultural Planning bureau. The fact that we are now in
the midst of the strongest economic crisis since eighty years is not very
comforting either. The outlook will remain bleak, in my humble opinion, for the
people that are currently in a situation of longterm unemployment and poverty.
I think that the only way to fight this longterm
poverty, is by spurring real innovation and really improved secondary and
vocational education and by stimulating a Dutch manufacturing industry.
Not just innovation to enhance the introduction of more
cheap commercial and financial services and cheap exports of bulky goods or agricultural
produce, but innovation to find new drivers for high quality jobs in innovative
industries.
One other very important thing is that the people in The
Netherlands refind their trust in their fellow countrymen and in the European
Union. The chill populist winds blowing through Europe cause distrust and
dividedness between groups of people and between the leading religions and
political factions in our country.
Only when our hearts and minds are cleared from our ubiquitous
depression and our mutual distrust in each other, the economy can find a stable
way towards new prosperity. When that happens indeed, I think that the
long-term poverty will diminish strongly again.
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