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Press Release, , : Social justice in Europe: labor market recovery fails to reach all people

Driven by a labor market recovery, EU citizens' opportunities for social participation have improved slightly for the first time since the beginning of the economic crisis in 2008. Not everyone is benefiting from this, however. A high risk of poverty persists in many countries. Children and youth in southern Europe continue to suffer most severely from the impact of the economic crisis.

Gütersloh, November 14, 2016. Europe is gradually recovering from the economic and financial crisis, thanks to the upward trend on the labor market. Significantly more people are now employed than at the peak of the crisis in 2013. However, the share of full-time workers who cannot live from their work alone has risen slightly. Additionally, children and youth in particular are profiting too little from the economic recovery. Especially in the crisis-stricken countries in southern Europe, the share of young people threatened by poverty or social exclusion remains high. This is the conclusion of the authors of the Bertelsmann Stiftung's Social Justice Index 2016. Since 2008, the index has been used annually to measure the opportunities for social participation of people in all 28 EU states.The EU-wide decline in opportunities for social participation in recent years appears to have been halted for the moment. This is due primarily to the positive development of the labor market. Almost two thirds of EU citizens (215.7 million people) were employed in 2015 (65.6 percent), an improvement from the previous year (64.8 percent). At the same time, the unemployment rate dropped from 10.4 percent (2014) to 9.6 percent (2015). Unemployment in Europe nonetheless remains above the precrisis level (7.1 percent in 2008). The same is true of youth unemployment: EU-wide, 4.6 million young people (20.4 percent) are still unemployed (2014: 22.2 percent). The rate in 2008 was just 15.6 percent (4.2 million).

European paradox: poverty risk despite full-time employment

The upswing on the labor market is not accompanied by a significant drop in the risk of poverty, however. Almost one in four EU citizens (118 million, or 23.7 percent) is still threatened by poverty or social exclusion. In 2014, this figure was only marginally higher (24.4 percent). The corresponding rates in southern and southeastern Europe are especially high, with the risk of poverty and social exclusion persisting at systemic levels in Greece (35.7 percent of the population), Romania (37.3 percent), and Bulgaria (41.3 percent). By contrast, the poverty risk is lowest in the Czech Republic (14 percent), Sweden (16 percent), Finland (16.8 percent), and the Netherlands (16.8 percent).

The authors of the study point out a conspicuous continuing rise in the share of fully employed people who are nonetheless threatened by poverty. In 2015, 7.8 percent of full-time workers in the EU were at risk of poverty, compared with 7.2 percent in 2013. The reasons for this include a growing low-wage sector and a division of the labor markets into regular and atypical forms of employment. According to the authors, the increase in the numbers of "working poor" is alarming, as those affected are excluded from full social participation. Aart De Geus, chairman of the Bertelsmann Stiftung, says: "A full-time job must secure not only one’s income, but also one’s livelihood. When a growing share of people can’t live from their work over a long period, it undermines the legitimacy of our economic and social order."

Youth in southern Europe have lowest opportunities for social participation

In all 28 EU countries, the opportunities for social participation among children and youth are still considerably lower than before the crisis. EU-wide, 25.2 million (26.9 percent) children and youth up to the age of 18 are threatened by poverty or social exclusion. In the crisis-ridden countries of Greece, Italy, Spain, and Portugal, the rates are even higher, with every third child (33.8 percent) being threatened by poverty, on average. That is, one million more children and youth in these four countries are now at risk of poverty and social exclusion than was the case in 2008. The situation for young people in Greece remains especially dramatic. The share of children and youth there who suffer from serious material deprivation rose once again, to 25.7 percent (2008: 10.4 percent). The southern EU countries are additionally struggling with the problem of a high share of so-called NEETs (young people who are "Not in Education, Employment, or Training"). These youth (ages 20–24 years) live entirely outside employment and training structures, which leaves them with virtually no chance of social advancement. In Italy, this group includes almost one third of young people (31.1 percent). In Greece (26.1 percent) and Spain (22.2 percent), the rates are likewise significantly above the EU average (17.3 percent).

The index also makes clear the growing gap between young and old. EU-wide, many more children than older people (26.9 percent to 17.4 percent) are affected by poverty or social exclusion. While almost every tenth child in the EU (9.5 percent) suffers from serious material deprivation, the rate among people over 65 years of age is 5.5 percent. The share of older people threatened by poverty or social exclusion decreased from 24.4 percent in 2007 to, most recently, 17.4 percent (2015).

According to Aart De Geus, the situation of youth who have been left behind poses a danger for society’s future: "The diminishing prospects for many young people play into the hands of rising populist movements. We musn't risk a withdrawal of a disappointed and frustrated youth from society."

Additional information

With the EU Social Justice Index, the Bertelsmann Stiftung annually investigates the respective opportunities for social participation in the 28 EU member states on the basis of 36 criteria. The index examines six different dimensions of social justice: poverty, education, the labor market, health, intergenerational justice, and social cohesion and nondiscrimination. The Social Justice Index 2016 takes into account internationally available Eurostat data up to October 27, 2016.