Minimum income, poverty and social exclusion

Minimum income, poverty and social exclusion are the most serious symptoms of the inequalities that our Égalité association and our movement #PaceTerraDignità – in the European elections, 6-9 June 2024 – proposes to overcome. An in-depth analysis follows.

1) Minimum income, poverty and social exclusion. Premise

European Parliament, the Council and the Commission have caused the most serious social and economic crisis since the Second World War and are now plunging us into the Third World War, which no people want.

Huge public resources have been diverted from the welfare state to weapons of mass destruction. Over 180 billion euros have already been diverted from the EU budget, 5,4 billion euros from the Italian one, just to supply weapons to Ukraine.

The European institutions have also declared the need for a minimum income, confirmed by international bodies (ie OECD, UN, World Bank), still awaiting concrete implementation.

2) European Council, recommendation 2023

The European Council adopted the recommendation on an adequate minimum income that guarantees active inclusion, on 30 January 2023, which refers refers to the objective of combating poverty and social exclusion. And at the same time, ensure more employment through income support. (1)

The 'people under-resourced'' - Meaning what 'those who live in conditions of scarcity, irregularity or precariousness of monetary and material resources, useful for health, well-being, and participation in economic and social life' (recital 15), whether able to work or not - must be supported with active income support measures and enabling services.

2.1) Principles of law

The need for a decent minimum income for all European citizens finds theoretical foundation in several acts. These include:

Charter of fundamental rights of the European Union (Nice Charter). The rights of access to social security benefits and social services including the fight against poverty, in case of residence and movement between EU Member States, must always be recognized and respected (2)

– Recommendation 2008/867/EC. Adequate income integration for a dignified life, intended for individuals unable to work, is part (theoretical, ed.) of the active inclusion of people excluded from the labor market (3)

– European Pillar of Social Rights. Anyone without sufficient resources is entitled to an adequate minimum income to ensure permanent access to goods and services. For those with work capacity, Member States should provide incentives for (re)integration into the labor market (4)

– Action plan on the European Pillar of Social Rights. By 2030, the EU and its Member States should reduce the number of people currently living in poverty and social exclusion by at least 15 million (95,3 million in 2022, according to Eurostat) and increase the employment of people in the 78-20 age group by 64%, with at least 60% of these people being employed each year. (5)

2.2) The Council's recommendation

The recommendation consists of 9 parts, 6 of which are directly aimed at ensuring the intended targets, as well as governance and monitoring of the measures taken by the Member States. The 6 main parts concern:

– adequacy of income support. What is needed is a combination of a minimum income, to be established with transparent methods that take into account all the relevant elements (e.g. disadvantaged situation of families, price levels), with other monetary and in-kind benefits. Also taking into account the needs of more sensitive subjects such as women, young people and people with disabilities

– coverage of the minimum income, to be established by law and allocated to all people without sufficient resources, with all the measures necessary to guarantee rapid and transparent access (including for the resolution of disputes), taking into account possible other sources of income in the households family members

– use of the minimum income. We must promote access to minimum income, by raising awareness among people in need and stakeholders, combating the stigmatization and prejudices that can be generated

– access to inclusive labour markets. The minimum income should be accompanied by labour market activation and adequate training, adapted to the context and to the recipients of the measures, also encouraging activities to be carried out internally within the company by the owner and/or employees (e.g. mentoring)

– access to enabling and essential services, to be guaranteed in an efficient and continuous manner. Avoiding financial and non-financial problems getting in the way

– customised support. An ad personam approach is needed to differentiate between those able and unable to work, to assess obstacles to social inclusion and employment, and to intervene appropriately.

2.3) Expected benefits

The minimum income is as a key element to abate poverty and social exclusion, it acts as an automatic stabiliser (to reduce economic fluctuations) and promotes a sustainable and inclusive recovery, in times of economic crisis and falling household incomes, including in the labour market and employment.

Member States' efforts in this direction can improve the social and health outcomes of their citizens, to their own and the EU's benefit. In addition to income and employment assistance, health care and healthy nutrition services should also be taken into account.

Member Statesit is emphasised, already have significant resources (e.g. dedicated investment funds, e.g. ESF+, ERDF, InvestEU) at their disposal to be directed to social intervention measures, together with adequate infrastructure and equipment to accompany minimum income strategies and work reintegration (where possible).

3) European Parliament, resolution 2023

The European Parliament in turn adopted a resolution on 15 March 2023 on an adequate minimum income for active inclusion. (6) The Strasbourg assembly recalled the Council recommendation and requested:

– the Commission to propose a proposal for a directive reforming Directive (EU) 2022/2041 on adequate minimum wages in this regard

– the Member States to cooperate in the exchange of good practices and the development of a common framework to implement the recommendation. (7)

The Strasbourg assembly also pointed out that the indicator 'at risk of poverty or social exclusion' (AROPE) fails to consider the broader and more complex causes of inequality. Instead, it is necessary to adopt more relevant indicators and to disaggregate data (e.g. by age, income, gender) to better focus minimum income measures and unemployment benefits. (8)

4) European Commission and Member States, scattered initiatives

The European Commission mildly invited Member States to revisit their policies on the adoption of a minimum income, already at the proposal stage of the Council recommendation, on the basis of a microsimulation model called EUROMOD (9). In the meantime, through ESF+ funds, some minimum income and material assistance schemes have been tested by some Member States:

- Italy. The municipality of Brescia has administered more than 500 monthly E-vouchers to support people on the poverty line in their purchasing and livelihood choices (10)

– France. The project 'Un toit sur la tête, un job dans la poche' (A roof over your head, a job in your pocket) aims to promote the social inclusion of young people under the age of 25 who find themselves in a situation of vulnerability and/or precariousness, through a minimum income subsidy, measures to the activation of the labor market and adequate support for housing and employment (11)

– Germany, Hungary and Slovakia. The CRIS (Cooperate, Reach Out, Integrate Services) program favors research for the adoption of inclusion measures at work for individuals in disadvantaged conditions (e.g. lacking skills, people with health problems, different ethnic groups), such as the counseling, partially developed by the users themselves. (12)

5) Minimum Income Report 2022

The '2022 Minimum Income Report' of the Commission and the Social Protection Committee (SPC) provides a general and specific overview for Member States, structured around the three paradigms of:

-active inclusion, i.e. adequate income support

-inclusive labor markets

– access to quality services.

The data reported in the '2022 Minimum Income Report' - whose findings, please note, predate the mass poverty exacerbated by the 'war economy' - show the following:

– the adequacy of services has remained almost unchanged in the last decade of reference

– people suffering social exclusion and access to income are reported to have decreased, but objective difficulties of access still exist

– the participation of minimum income beneficiaries in labor market measures is often low and limited, and there is little coordination with bodies offering access to enabling services and other complementary benefits (13,14).

5) European Anti-Poverty Network

European Anti-Poverty Network (EAPN) is the most important network of local, regional and European non-governmental associations active in the fight against poverty and social exclusion.
EAPN -like the European Economic and Social Committee before it (15) - stresses the need to adopt a directive on minimum income and denounces the serious shortcomings in the Council Recommendation of the measures necessary to achieve the set objectives. In particular:

– absence of a universal rights-based approach, making the scheme valid for all
– lack of a common EU-wide method and framework on reference budgets, sustainability measures and best practices for the adoption of minimum income
– insufficient disaggregation of data
– residence and age restrictions for accessing the service (16,17).

6) ITALY, support measures

In Italy there have been various measures to support poverty, from SIA (Support for Active Inclusion), to REI (Inclusion Income) up to RdC (Citizenship Income) and PdC (Citizenship Pension), which turned out to be the tools more inclusive and universal, as it is also intended for single-family households, regardless of age or other conditions.

The support measures have been disaggregated, by the government of Giorgia Meloni, in the forms of Support for Training and Work (SFL) and the Inclusion Allowance (ADI) which respectively concern, to date, approximately 550.000 and 36.000 people. (18) With an exclusive approach - rather than a universal one, as recommended in the documents mentioned above (19,20).

The INPS Observatory in fact, it indicates 1.121.690 beneficiaries of Citizenship Income and Citizenship Pension, between April 2019 and December 2023, with an average subsidy of €573,96 and €264,02 respectively. (21) The number of beneficiaries is therefore halved, and it is unlikely that the half million excluded are just scammers like the son of the founder of the Lega party, Riccardo Bossi.

6.1) Italy, the data

ISTAT statistics on income and living conditions (EU-SILC), which date back to 2021-2022, indicate that:

24,4% of the Italian population is at risk of poverty and social exclusion (8th place in the EU). This risk has a greater impact on
– women (26,2%, compared to 22,5% of men)
– minors (28,5% under 18 years, 20,0% over 65 years)
– unemployed (65,4%, compared to 12,7% of employed)
– families with children (26,3%. 22,6% those without children)
4,5% of the population is in a condition of serious material and social deprivation
family income the poorest families is 5,6 times lower than that of the wealthiest families (without income support, the value would have been 6,4). (22,23)

Fig. 1 – Monthly distribution of recipients of Rei, RdC/PdC and emergency income (REm) for the period April 2019 – December 2023 (source: INPS)

Fig. 2 – Distribution of the percentage of population at risk of poverty or social exclusion (AROPE) by individual Member State and EU average (source: Eurostat)

7) Minimum income in the rest of the world

OECD has collected on the website Benefits and Wages some notes on the policies adopted in its member countries and some non-member countries. Using a standard, TaxBen, to compare tax obligations and entitlements to social benefits and their influence on the net disposable income of households in different employment conditions. (24)

UN and World Bank are instead considering the hypothesis of promoting the adoption of a universal basic income (UBI) as a tool to fight against the precariousness of the labor market, unemployment, poverty and social injustice (25,26). Some countries (i.e. India, Mongolia, Iran) have started some experiments in this regard.

Fig. 3 – Comparison between the universal minimum income (purple) and other social assistance schemes, in terms of conditionality, delivery methods and targeting (source: UN)

8) Peace, Earth and Dignity

# SDG1 – the first of the Sustainable Development Goals, in the UN Agenda 2030 – concerns the end of poverty in all its forms and everywhere in the world. (27) An extension of the first of the Millennium Development Goals, 'eradicate extreme poverty', which only China managed to achieve by 2000. (28)

The war economy that the current leadership of the EU and its European member states are imposing on the populations - in the sole interest of big finance and the arms industry - has instead resulted in mass poverty that is destined to worsen further. Now more than ever we must reverse course.

#PaceTerraDignità

Dario Dongo and Andrea Adelmo Della Penna

Note

(1) Council Recommendation of 30 January 2023 on an adequate minimum income ensuring active inclusion (2023/C 41/01). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023H0203(01)
(2) Charter of Fundamental Rights of the European Union, Article 34 http://data.europa.eu/eli/treaty/char_2016/oj
(3) Commission Recommendation of 3 October 2008 on the active inclusion of people excluded from the labor market. Chapter III (Social protection and inclusion), point 14 http://data.europa.eu/eli/reco/2008/867/oj
(4) Interinstitutional Proclamation on the European Pillar of Social Rights https://eur-lex.europa.eu/legal-content/IT/ALL/?uri=CELEX:32017C1213(01)
(5) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Action Plan on the European Pillar of Social Rights (COM/2021/102 final) https://eur-lex.europa.eu/legal-content/IT/ALL/?uri=CELEX:52021DC0102
(6) European Parliament Resolution of 15 March 2023 on an adequate minimum income ensuring active inclusion (2022/2840(RSP)) https://www.europarl.europa.eu/doceo/document/TA-9-2023-0076_IT.pdf
(7) This aspect was also proposed in point 14 of the final report of the Conference on the Future of Europe
(8) European Semester for economic policy coordination: employment and social priorities for 2023. European Parliament resolution of 15 March 2023 on the European Semester for economic policy coordination: employment and social priorities for 2023 (2022/2151(INI)) https://www.europarl.europa.eu/doceo/document/TA-9-2023-0079_IT.pdf
(9) See https://euromod-web.jrc.ec.europa.eu/
(10) European Commission. E-vouchers help an Italian city fight the stigma of poverty. 28.9.22
https://european-social-fund-plus.ec.europa.eu/it/projects/vouchers-fight-poverty-stigma (accessed on 12.3.24)
(11) Grand Lyon. « One day, one job in a few »: 1,2 million euros of European finance to accompany 300 young people in precarious situations in the territory. 23.9.21 https://www.grandlyon.com/fileadmin/user_upload/media/pdf/espace-presse/cp/2021/20210923_cp_programme-easi.pdf (accessed on 12.3.24)
(12) See t.ly/5BDnf
(13) European Commission. The 2022 minimum income. Volume I. Publications Office of the European Union. https://data.europa.eu/doi/10.2767/37278
(14) European Commission. The 2022 minimum income. Volume II, Country Profiles. Publications Office of the European Union https://data.europa.eu/doi/10.2767/701127
(15) EESC. For a European Framework directive on a Minimum Income (own initiative opinion). https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/european-framework-directive-minimum-income-own-initiative-opinion
(16) Van Lacker A. et al. (2020). Expert study on a binding EU framework on adequate national minimum income schemes: Making the case for an EU framework Directive on minimum income https://www.eapn.eu/wp-content/uploads/2020/10/EAPN-european-minimum-income-eu-framework-expert-study_October-2020-4734.pdf
(17) EAPN. Minimum Council Recommendation: Not Enough To Fight Poverty https://www.eapn.eu/wp-content/uploads/2023/02/eapn-EAPN-2022_Minimum-Income-Council-Recommendation-5646.pdf
(18) The latest public data shows 287.704 ADI applications accepted, out of 446.256 applications submitted https://www.inps.it/it/it/inps-comunica/notizie/dettaglio-news-page.news.2024.01.assegno-di-inclusione-adi-avvio-dei-primi-pagamenti.html, and 117.023 applications submitted for the SFL https://www.lavoro.gov.it/notizie/pagine/supporto-la-formazione-e-il-lavoro-domande-117023-persone
(19) Proto G. (2023) The abolition of the minimum income in Italy in the European horizon. Menabò 196/2023 https://eticaeconomia.it/labolizione-del-reddito-minimo-in-italia-nellorizzonte-europeo/
(20) Gaetano Proto was also critical of the RdC, having caused an increase in the unemployment rate. V. https://www.astrid-online.it/static/upload/dal-/dal-reddito-di-cittadina.pdf
(21) INPS Observatory. RdC quarterly report April 2019 – December 2023 https://www.inps.it/content/dam/inps-site/pdf/dati-analisi-bilanci/osservatori-statistici/Report_trimestrale_RdC_Aprile_2019-Dicembre_2023.pdf
(22) ISTAT. The risk of poverty and social exclusion is stable https://www.istat.it/it/files//2023/06/REPORT-REDDITO-CONDIZIONI-DI-VITA2022.pdf
(23) See https://ec.europa.eu/eurostat/web/income-and-living-conditions/visualisations
(24) See https://www.oecd.org/social/benefits-and-wages/
(25) A. Universal basic income: potential and limitations from a gender perspective https://www.un-ilibrary.org/content/papers/10.18356/2618026X-22/read
(26) Gentilini U. et al. (2020). Exploring Universal Basic Income – A guide to Navigating Concepts, Evidence, and Practices. World Bank https://documents1.worldbank.org/curated/en/993911574784667955/pdf/Exploring-Universal-Basic-Income-A-Guide-to-Navigating-Concepts-Evidence-and-Practices.pdf
(27) Dario Dongo, Giulia Caddeo. Sustainable Development Goals, SDGs. The challenge of humanity. Égalité. 5.9.19
(28) Dario Dongo. Poverty and social exclusion. Equality. 19.10.19

Dario Dongo

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Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.

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Andrea Adelmo Della Penna

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Graduated in Food Technology and Biotechnology, licensed food technologist, he follows the research and development area of ​​Wiise Srl, a benefit company.

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