The inhumane face of crisis mirrored in numbers

Viable and adequate pensions. The common objective: promoting solidarity among and within generations, (EC Audiovisual Services).

The discussion and the argumentation about the unbelievable fall of living standards of the most deprived part of the population in the European Union during the crisis years is more or less an assertion, based on what every one of us sees and hears in one’s own personal social circle. Unemployment percentages tell only part of the story. As for the Press it usually produces stories about individuals. No reliable statistics had been published so far.

This is the reason why the rich people, even when they lament the deprivation and the insecurity of the poor, they don’t quite know what they are talking about. In this respect the widely held perception that the economic crisis has gravelly deteriorated the position mainly of the poor, is more of an ideological scheme rather than a proven reality.

To put an end to this vagueness over the repercussions of the crisis on the most deprived segment of our modern European societies, Eurostat, the statistical service of the European Union, undertook a relevant study that proved exactly that, posting concrete results and measuring exactly the degree of this impact. The study was published yesterday. The author, Emilio Di I Meglio, arrived at the conclusion that “Income fell most in the bottom income quintile (1/5 of population or 20%) in most Member States”.

No decent meal

The Eurostat researcher also found that, “Among material deprivation items, the inability to afford a meal with meat, chicken, fish or a vegetarian equivalent every second day showed the greatest change in 2011 at EU-27 level compared with 2010”. Given that income is the basic variable which can accurately measure living standards, Eurostat’s study focused on that.

Of course the author has adapted the income statistics. He works with the median, a more representative summary than the arithmetic mean as far as differences are concerned. The median divides exactly in two, the distribution of personal incomes in a country leaving 50% of measurements on each side.

As for the household disposable income, the study notes that “it corresponds to income from market sources and cash benefits after deduction of direct taxes and regular interhousehold cash transfers, adjusted of course for size and composition”. The author also observes that the “equivalised disposable income is an indicator of the economic resources available to a standardised household”.

With this little theory in hand let’s follow the basic points of this study. A good summary of the conclusion follows here: “Income decreased in the bottom quintile of the income distribution in most Member States. In 15 Member States, income inequality increased because income in the top quintile decreased less or increased more than in the bottom quintile”.

As for incomes the findings are breath-taking: “median equivalised disposable income in national currencies fell in 15 Member States in 2010 compared with a year earlier. The sharpest drop in real terms occurred in Greece, where the median equivalised disposable income fell by 12.3%. It fell by 6.6% in Bulgaria, 6.1% in Latvia, 5.8% in Spain, 4.8% in Estonia and 4.4% in Portugal. A sharp decrease of 9.7% was also registered in Iceland”.

The more recent data that this author uses come from 2011. In Eurozone however, and also in the entire European Union, the real crisis came with the application of the draconian austerity policies, which were first imposed in 2011. It was Greece, the first country to ask for a financial rescue from its Eurozone peers and this came towards the middle of 2010.

Actually it was from the beginning of 2011 when Greece started applying severe austerity measures. It took some time for Ireland and Portugal to join the club of the ‘programme’ member states in early 2011. The ‘programme’ consists mainly of the recipe provided by the troika of the European Commission, the European Central Bank and the International Monetary Fund. As for Spain and Italy austerity came towards the end of 2011.

Consequently all those results in Eurostat’s study with 2011 data, measuring the repercussions of the economic crisis on people’s living standards, do not tell the whole story because the phenomenon had just started in that year. For example unemployment keeps always rising fast in Greece, Spain, Italy, Portugal, France and many other EU member states. Given that this study proved that it is the unemployed who suffer the worst effects from the crisis, their situation must have become even more unbearable in 2012 and 2013.

Probably Eurostat has already undertaken a new such research with 2012 data and publish its results in due course. It must be noted that 2012 was the most difficult period for everybody. In any case the study gives very concrete evidence on how this ongoing crisis is affecting the most vulnerable part of society. And mind you today is not only the 10% of the population that cannot afford a decent meal every second day, but many more. Some prefer to commit suicide than admit it…

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