European minimum income: Not just surviving, but thriving

The EU should provide a 'safety net'  for all citizens, says German Green MEP Terry Reintke, making the case for a European Minimum Income Directive to ensure that losing your job doesn’t mean falling into poverty.

Green MEP Terry Reintke
Green MEP Terry Reintke

Image: Cornelis Gollhardt

Green MEP Terry Reintke

Terry Reintke

There is a poisonous fear descending on Europe: the fear of losing something. It is the fear of losing a job, of being deprived of social rights, of ending up in poverty and precariousness. People are afraid of having to work three jobs, 60 hours a week without breaks, without a pension to prevent the slide into poverty upon retirement, without a security net to fall back on. We can meet this fear with ignorance, by simply denying its existence – but in the end we will all lose when right-wing populists and those wanting to profit from this fear find scapegoats in the weakest members of our society. We can also meet this fear with the strongest asset that this continent holds: solidarity.

To fight inequality we will need to tackle big macroeconomic issues, we will need good regulatory measures and we will need more tax justice. But we will also have to start by understanding the reality faced by ordinary people – of the Romanian child, the worker in Ireland, the unemployed in Greece, the pensioner in the Netherlands, the migrant in the United Kingdom. Mr Juncker said that we need to ‘do big things big’ in the European Union. I want to take him at his word and propose the adoption of a European Minimum Income Directive that could do both: do big things big and accommodate the realities faced by ordinary people.

Tumbling into the abyss of poverty

Currently, about 113 million people in the European Union – roughly 22 percent of the population – are at risk of poverty or social exclusion. This means that almost one in four people in the EU are staring into the abyss of poverty. They are at risk of income poverty, severely materially deprived or living in a household with very low work intensity. These figures are blatant. Since 2010, when the EU committed itself to lifting at least 20 million people out of poverty by 2020, the number of people at risk of poverty or social exclusion has dropped by five million. It is unnecessary to emphasise that the 2020 target must already be considered a failure as it is unlikely to lift another 15 million people out of poverty within a year. At the same time, however, it is all the more important to finally find the right political answers to the pressing problem of poverty and exclusion in the EU. I am convinced that a European Minimum Income Directive would be one of the right answers to address this problem.

Minimum income schemes are last resort support measures specifically designed to ensure decent living standards for individuals and families who have no other means of financial support. This could be either because they cannot work or access a decent job, or because they are refused unemployment benefits. The term ‘minimum income’ should not be confused with ‘basic income’ or ‘citizens’ income’, though. The latter are independent from any other revenue and granted to citizens or residents of a country by a public institution. This is why they are often referred to as ‘unconditional basic income’.

 Most countries in the EU have minimum income schemes or related types of non-contributory means-tested schemes for people of working age. The characteristics of these schemes, however, vary widely and their inadequacy to ensure a decent life emerges as a major challenge facing many countries. According to a study by the European Commission, Cyprus and the Netherlands are the only two member states in which the level of benefit of minimum income schemes is assessed as being adequate. In twelve member states – among them Bulgaria, Germany, Estonia, Greece, France, Croatia, Hungary, Italy, Latvia, Portugal, Romania and Slovakia – the level is considered to be very inadequate. This makes the need for action all the more urgent.

Weaving a European safety net for all

The EU could become a leader in providing every person, at every stage of their lives, with the certainty that they will be safe in the event of job loss. It can stretch a safety net that allows every human being to fall softly if the worst comes to the worst. This safety net must be adequate to ensure a life of dignity and support participation in society. It should help people not only to survive, but to thrive.

A European Minimum Income Directive could lay down the framework conditions, such as the minimum level and the cornerstones of the design of minimum income schemes in the member states. These minimum standards should consider the economic and social situation in the member states and be based on the European risk-of-poverty threshold, which is set at 60 percent of the national median equivalised disposable income. The concrete implementation would then be the task of the member states, which could of course also maintain higher standards or create new ones.

For minimum income schemes to be effective in lifting people out of poverty, they must be set above the risk-of-poverty threshold. This is why it is so important to urge all member states to upgrade their schemes if they are below this threshold. Furthermore, they must also be accompanied by access to quality services and measures to facilitate entry or re-entry in the labour market for people in vulnerable situations, insofar as they are able to work.

It should be emphasised that minimum income schemes not only help the poor, but also stabilise the economy. The European Economic and Monetary Union will only last if it is complemented by a social pillar, which requires minimum social standards and ambitious projects such as a European Minimum Income Directive. With this in mind, it should be in everyone’s interest to start weaving this safety net for all.

Terry Reintke is a MEP and Vice President of the Greens/EFA group in the European Parliament. She stands for a Europe that offers prospects for everyone that should allow for a good life, equal participation, and social security. In recent years, she has also been a strong advocator for equal pay levels beyond the bare national minimum wage and the protection of workers that became victims of criminal exploitation. Especially in times of crises and rising right-wing populism, it is a matter close to her heart to push for a stronger social dimension of the European Union. For more information, please visit Terry’s website or follow her on Facebook or on Twitter @TerryReintke.