Debate: International Day for the Eradication of Poverty
Date: MONDAY, 17 OCTOBER 2022
Speaker: Nicolas Schmit
Language: EN

I am glad that Parliament decided to remind everyone that today is the International Day for the Eradication of Poverty, and I very much welcome this debate. Poverty is the root cause of many human rights and labour rights violations. For example, child labour, forced labour and human trafficking are each deeply connected to poverty. When it comes to the European Union, according to Eurostat figures, in 2021, there were an estimated 95.4 million people in the EU at risk of poverty or social exclusion, which was equivalent to 21% of the total population: a really frightening figure. According to AROPE rates, up until last year, relative poverty – linked to insufficient income – was declining from 2016 to 2018, but picked up again in 2019 and 2020. When it comes to adequate income, having a job is increasingly not necessarily a viable route out of poverty. In 2019, almost 1 in 10 workers experienced in-work poverty, a situation that is absolutely inacceptable. The COVID-19 pandemic halted the positive trend in poverty reduction over the past 25 years. The combined impacts of Russia’s war of aggression towards Ukraine and of climate change may be further detrimental if we do not take bold measures to support the most vulnerable, but also those households that are suffering from skyrocketing energy price increases without seeing their income being adapted to this evolution. The European pillar of social rights and the Porto targets put combating poverty at their core. The Union strategy to address poverty is reflected in the European pillar of social rights and its principles, whose objectives are providing equal opportunities for all, fair working conditions and social protection to fight against poverty and inequalities. Lifting at least 15 million people, including at least 5 million children, out of poverty and social exclusion is our joint European target, proposed by the Commission in its action plan for the implementation of the pillar, and welcomed last year at the Porto Social Summit and endorsed by the European Council. We have to stick to this objective because poverty is hitting more and more families. All EU Member States have set their own national targets to reduce poverty, adding up and exceeding the EU targets. Prior to Russia’s invasion of Ukraine, social indicators for 2021 mainly flagged up positive changes. This was thanks to the contribution of social protection and social inclusion systems. The at-risk-of-poverty or social exclusion rate for children remains higher than the rate for the general population. This is a real challenge, as children growing up in poverty or social exclusion are less likely to do well in school, enjoy good health and realise their full potential later in life. This is something we just cannot accept. Young people have been strongly impacted by the COVID-19 pandemic. In addition, young people are generally less well covered by social protection systems, resulting in a higher risk of poverty or social exclusion for 16 to 29 year olds. They often face job precariousness and a lack of affordable housing. While latest data confirm an improvement in the poverty and relative income situation of older people, older women face a significantly higher poverty risk and lower pensions than men do. Women’s lower earnings and under—representation in the labour market translate into their higher risk of poverty. Other factors make women more vulnerable, such as single parenthood, disability and a migrant background. Women are also very often over—represented in sectors where wages are low and precariousness is high, and they are very often obliged to work part—time. Russia’s war of aggression against Ukraine has caused a clear deterioration of the socio-economic outlook, and it has triggered a humanitarian crisis, with millions of Ukrainians having fled their country. At the same time, the criminal destruction of mainly civil infrastructure in Ukraine has pushed poverty up dramatically in this country. Against this critical context and key challenges, strong action is needed. We need to continue to tackle the source of the soaring energy prices, which are driving high inflation. We need to prevent households falling into a precarious economic situation, in particular lower—income families. We also need to review the adequacy and coverage of social safety nets, in particular, minimum income benefits and access to enabling services. Wage policies and adequate minimum wages are key to countering poverty, in particular in-work poverty, and to protecting households’ purchasing power. I call on all Member States to swiftly transpose and implement – even before transposition – the directive on minimum wages. I must say I have noticed that a certain number of Member States have now increased their minimum wages, by more than 5, 7 or 10%. Other countries have indexed their minimum wages. To effectively fight against poverty and inequality, we need an integrated approach based on the coordination of different measures and policies. The Commission has recently adopted a communication that provides guidance to Member States on making greater use of distributional impact assessments, and to better target the different measures. Concrete initiatives are put forward through the implementation of the European pillar of social rights. The objective of the European child guarantee is to break the vicious circle of intergenerational poverty. Now it’s time to put this child guarantee into practice, to implement it through national action plans. The recently adopted European care strategy – a sector where an overall majority of women are working – gives not only children a better education and better care but also supports long-term care systems. Finally, the Council recommendation on adequate minimum income ensuring active inclusion education and skills are key in finding good jobs with a decent wage, and so help to reduce poverty. Addressing energy poverty is a key part of the approach to the fight against poverty. With Parliament, we are working on combating homelessness, a form of extreme poverty which affects 700 000 people or more in Europe. The Commission recently put forward a regulation on an emergency intervention to address high energy prices which sets a revenue cap on companies that produce electricity at a lower cost. Therefore, we also propose that excessive profits should go to support households and companies. We need a holistic approach to tackle poverty and inequalities. We have to make sure social policies are considered on an equal footing as other policies, be it economic, fiscal or taxation policies. Fairness is one of the four strands of this Commission economic strategy. These are constituent elements of our unique social market economy. But we Europeans cannot ignore that hundreds of millions of people live in extreme poverty outside Europe. They are struggling to survive. This year, about 5 million children have already died from poverty. Today, on the International Day for the Eradication of Poverty, more than 11 000 kids will have died from hunger, absence of health care and disastrous living conditions. This is not fate. This could be avoided. Our commitment has to be clear and solid. Social justice is the condition and foundation of peace. Therefore, the EU should be at the forefront of building a fair, just and sustainable world economy that eradicates poverty.