On 3 December 2013, the Dutch Social Cultural Planning
Bureau and Central Bureau of Statistics presented their "Annual Poverty Survey, edition 2013".
The conclusions of this survey were disturbing for the unprepared eye and a
tell-tale signal of:
a. the depth of the economic crisis that is enrolling
currently in The Netherlands;
b. the fact that Dutch politics must take decisive action,
in order to prevent a large group of really poor people from growing in The
Netherlands, without ever disappearing anymore.
This is the reason that I show this press
release almost in full, accompanied by my comments, where applicable.
I
invite everybody to download the full report in Dutch or the extensive summary in English at the aforementioned link.
One more thing: there are always people, who declare that
poverty in The Netherlands is totally different than poverty in say, Bulgaria
or Moldavia. These people are right: nobody will die in The Netherlands from
starvation, exhaustion or freezing to death.
On the other hand, if you reckon that The Netherlands is one
of the three richest countries in the European Union, you will agree that the
emergence of a large group of poor people is disturbing.
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| Persons and household in poverty Table courtesy of: Social-Cultural Planning Bureau Click to enlarge |
Main conclusions:
- The poverty rate in the Netherlands increased sharply in 2012, as in 2011. Estimates suggest weaker growth in 2013 and a further reduction in 2014.
- Long-term poverty also
rose in 2012.
- The risk of poverty is
highest for single-parent families, single persons aged up to 65, non-Western
households and people on social assistance benefit. The poverty rate rose
sharply in all these groups in 2012.
- Child poverty has
increased substantially since 2007.
- Poverty is concentrated in the major cities. The postcode districts with the most poverty are in the cities of Leeuwarden and The Hague.
Poverty thresholds
The report uses two
main criteria for measuring poverty:
- CBS discusses the risk of poverty on the basis of the low-income threshold. This threshold represents a fixed level of purchasing power and is adjusted annually only on the basis of price changes. CBS describes the risk of poverty primarily at household level.
- SCP describes poverty on the basis of the modest but adequate criterion.This is an amount based on the minimum necessary expenditure for food, clothing, housing and social participation. SCP measures poverty primarily in terms of individual persons.
Sharp rise in
poverty in 2012
The economic crisis
which began at the end of 2008 initially had only a modest impact on the extent
of poverty. It was not until 2011 that the poverty rate began to rise
substantially according to both thresholds, and the increase was even greater
in 2012.
Based on the
low-income threshold, 664,000 households (9.4% of all households in the
Netherlands) were at risk of poverty in 2012. This represents a sharp increase compared
with 2011 and 2010, when 575,000 (8.2%) and 514,000 (7.4%) households,
respectively, had a low income. A total of 1.329 million persons were on a low
income in 2012.
The number of persons
with an income below the modest but adequate criterion in 2012 was 1.197
million (7.6% of the Dutch population). The number of people in poverty rose by
152,000 in 2012, after having already grown by 100,000 in 2011. There were
551,000 households living below the modest but adequate criterion in 2012 (7.8%
of all Dutch households).
My comments: Both
criteria are (in my humble opinion) good ways to measure poverty, but using
these criteria combinedly can be confusing.
Personally, I would have preferred one definition and one method for
measuring poverty.
It is clear that there was a substantial growth of poverty in
2011 and 2012.
In the first years of the crisis (2008-2010), this crisis
largely seemed to be an “American” problem and a problem of the financial industry:
a huge hickup of the economy, as a consequence of boundless trade in mortgage backed securities and other securitized products, which brought banks and financial institutions in the US and (later) in Europe
and the rest of the world to their knees.
After the US and European governments had pumped billions of dollars and Euro’s into the system, by rescuing numerous large banks and
insurers, it seemed initially that this crisis would be over, before it had even really started.
In spite of the economic slump in 2009, the effects for
unemployment in The Netherlands had been kept artificially low. This happened, due to the Part-time
Unemployment Benefit and the initial reluctancy of companies to lay off
their excess personnel, afraid as they were that good personnel could become
scarce when the economy would start to grow again.
However, halfway 2011 it became not only clear that the
crisis had been transfered from the financial industry to the (European)
governments, but also that a series of bubbles all over Europe and the rest of
the world had popped violently:
- the Spanish Commercial Real Estate bubble;
- the Irish housing bubble;
- the Greek debt bubble;
- the Dutch housing and CRE bubble.
Besides that, the PIIGS-countries (Portugal, Ireland, Italy,
Greece and Spain), as well as France, had shown that their economies offered too
little autonomous growth potential and that they were too dependent on imports
from The Netherlands and Germany.
The economy in these countries slumped (especially in Greece, Spain and Portugal) and unemployment soared dramatically. This led to dropping imports in these countries, which had dramatic results for
the Dutch exports and employment.
At that time, it became clear that the former banking crisis was so much more than a simply solvable hickup of the economy. It was here
to stay in The Netherlands and, as a consequence, people
would be laid off by the masses.
This is (imho) the reason that poverty has risen
dramatically, since 2011.
Growth in poverty
set to weaken
The estimates indicate
that the poverty rate will continue to rise in 2013 according to both criteria,
but to a lesser extent than in 2012. According to the modest but adequate
criterion, the poverty rate is likely to decline slightly in 2014, whereas on
the basis of the low-income threshold it will continue to grow in 2014, but
less strongly than in 2013.
According to the
modest but adequate criterion, the number of people in poverty is expected to
rise by 16,000 in 2013, to 1.213 million persons (7.7% of the population). This
total is likely to decline by 35,000 in 2014, taking the total number of people
in poverty to 1.178 million (7.4%), slightly fewer than in 2012.
Based on the
low-income threshold, the number of households in the Netherlands at risk of
poverty will increase by almost 40,000 in 2013, taking the total to 703,000
(9.9% of all Dutch households). The estimate for 2014 suggests a slight
increase of 14,000, which would mean 717,000 households with a low income
(10.1%).
My comments: In these SCP/CBS estimates,the
slightly improving poverty situation in 2013 and 2014 seems to be based
upon the assumption that the economy in The Netherlands will improve slightly during these years, when compared to 2011 and 2012.
I have serious doubts about this assumption, as especially
unemployment has soared in 2013 and it will probably further rise in 2014.
According to me, all the signals for prospective improvement have been based
upon ‘a mirage’.
Households, companies and the local and central goverments
are still unwinding their debt and try to save money with ferocious austerity
measures:
- Consumption almost came to a stand-still;
- The central and local governments are taking one tax-hike after another;
- Companies are trying to do more with less and much cheaper personnel.
There have been some greenshoots lately, but in my opinion
these are outliers in a general trend that still points downward, instead of
upward.
Also sharp rise in
risk of long-term poverty
More than 170,000
households had lived on a low income for almost four successive years in 2012,
17,000 more than in the previous year. This means that the share of households
living below the low-income threshold long term rose from 2.4% to 2.7%.
Long-term poverty also
increased in 2012 according to the modest but adequate criterion, from 2.2% to
2.7% of all people in the Netherlands.
My comments: In
spite of all the VVD bleating (the liberal-conservative party of PM Mark Rutte) about the ‘participation
society’, there is a growing group of people which is dropping out from
‘our’ society.
Although these people are probably not 'poor' to Moldavian eyes,
they are nevertheless much poorer than the rest of the Dutch society.
Instead of spurring them with draconic measures, concerning
their welfare payments, mini-jobs
and VVD-propaganda about the participation society - in order to get them into a poorly paid job without further
development possibilities - it would be better to actively help these people.
People should be helped to get a good job, by giving them free, additional vocational education, courses to teach them new skills and hands-on experience, through interships at companies.
Of course I am not much in favour of putting energy in helping
people, who don’t want to be helped at all and sabotage all attempts to get them
on the right track again. Unfortunately, I know that these people exist.
Still,
although I disapprove of such behaviour, I think that these people should
receive a welfare payment after all, of which they can live properly.
On the other hand: most people are of good will and would cherish
it when someone would lend them a hand, without grabbing a part of their
welfare payments with the other hand.
These people of good will should be
helped and supported by the local and central governments. And people that can’t
work, because of a physical or mental disability, should be treated with
respect and empathy: not as 'spongers upon society'.
Further increase in
poverty among at-risk groups
In all groups which
have traditionally been at high risk of poverty, the share of households with
an income below the low-income threshold increased further in 2012.
The percentage of
households in receipt of social assistance benefit which had an income below
the low-income threshold went up from 69% in 2011 to almost 74% in 2012; for
single-parent families the increase was from 28% to 30%; for singles aged up to
65 the figure increased from 18% to 20%; and for non-Western households the
increase was from 25% to just under 29%. The risk of poverty among non-Western
households in 2012 was substantially lower for members of the second generation
(just under 20%) than for the first generation (31%).
The poverty rate
measured on the basis of the modest but adequate criterion was also highest in
2012 for social assistance benefit recipients (47%), single mothers (24%) and
migrants (from Poland: 18%; from Turkey: 19%; from Morocco: 21%).
My comments: too
often you hear stories that companies – and Human Resource departments – are
biased towards the minority groups, which are mentioned here. The government
should be focused on this problem, in order to prevent that poverty becomes mainly an
ethnical problem in The Netherlands.
On the other hand, ethnical groups should work on their
control of the Dutch language (which is paramount for everybody) and should stop with
hiding themselves behind counter-productive ethnical and religious rites and
symbols, which go far beyond what can be considered normal.
The best way to get a
job is by being fit for this job, in any kind or way.
Adults who are poor
are often in work; more than half are of Dutch origin
In absolute terms,
adults in poverty are often in employment. Based on the modest but adequate
criterion, there were 348,000 working poor in the Netherlands in 2012 (of whom
165,000 were self-employed, both with and without staff). At that time, there
were 255,000 poor social assistance benefit recipients and 79,000 people aged
over 65 in poverty. The majority are also of Dutch origin: of the 813,000
adults in poverty in 2012, 488,000 were natives.
My comments: The
government should thoroughly investigate the issue
of poor freelancers, without a
sufficient source of income. It should also investigate underpaid jobs in
all kinds of industries.
It is a bad development that people can have a job and still
be poor at the same time. In my opinion, this phenomena has soared during the
last few years, due to the influx of people from the eastern European countries, who were willing to work for much lower (and sometimes even illegal) salaries.
This phenomena was reinforced by the diminishing inspections and assessments coming from
government institutes, like the labour inspection.
All these institutes had to deal with vigourous austerity
measures, which almost made it impossible for them to do their job properly.
Too often these indispensable inspections were left to ‘the market’ and to ‘self-regulation’
of the industry: the latter has proven to be a eufemism for the government doing nothing!
Strong growth in
child poverty
The number of children
in poverty in the Netherlands has increased by over 100,000 since 2007;
according to the modest but adequate criterion, the number of children aged up
to 17 years rose to 384,000 in 2012 (11.4% of all children in the Netherlands,
+3.4 percentage points). One in three poor people are aged under 18. Child
poverty is however still below its peak in 1994.
My comments: Especially
among children, poverty is a harsh phenomenon.
These children can’t participate
in school-holidays, swimming education, sports and other necessary extras for
children. They often get bullied by other childrend for looking peculiar and wearing the wrong
clothes.
On top of that, they run a substantial risk for serious health, growth and learning problems, as a consequence of being underfed due to poor nutricion.
Financial difficulties
Households at risk of
poverty often face financial difficulties. Eight out of ten households with an
income below the low-income threshold reported that they had insufficient money
in 2012 for things such as food, clothing, furnishing their home and holidays.
During that year, 11% of households with a low income were behind with their
rent or mortgage payments. That is a much higher figure than in 2008 (7%) but
is slightly lower than in 2011 (13%). The share of low-income households who
felt forced to get into debt grew from just over 5% in 2008 to almost 8% in
2013.
My comments: This
is the economic crisis sneaking up to people. People with little income have
often largely similar expenses as upper and middle-class families have.
Especially local governments are the champions of imposing (hidden)
taxes on people, through:
- Housing taxes;
- Taxes on drinking water and energy;
- Increased parking costs;
- Increased costs for all kinds of permits;
- Increased costs for passports, driver’s licenses, wedding arrangements, extracts from the population register and other municipal services, that people can’t go beyond.
Besides that, the central government (especially the VVD)
has declared the ‘war on social renting’, by increasing the monthly rent payments
and lowering the threshold for social rent houses.
The main victims of this doomed, mindless policy are the
lower middle class people, who earn ‘too much money’ for a social rental house,
but much too little money for a ‘free sector’ rental house or an owner-occupied
house.
These people get financially stuck and might fall into
poverty, due to their excess housing expenses.
Summarizing, the ‘Annual Poverty Survey 2013’ has been an
alarming report, which showed that the government must take action, in order to
prevent that the group of poor people becomes bigger and more out of control.
Nevertheless, the situation in The Netherlands is still much
better than in other European countries. Let’s keep it that way, please!
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