Jakub Majmurek: You are the author of the report, which shows that in 2023 utmost poorness experienced over 2.5 million people in Poland, or 6.6 percent of the population, and almost half – 46 percent – were in the sphere of social exclusion. What are the definitions of utmost poorness and social exclusion in the report?
Richard Szarfenberg: Both terms are utilized by the Central Statistical Office in investigation on household budget expenditure. The Central Statistical Office, in turn, draws its criteria from the Institute of Labour and Social Affairs – it is simply a investigation centre under the Ministry of the Labour and Social Policy, which erstwhile a year gives estimates of the minimum existence in Poland and all 4th about the social minimum.
We say that a farm is experiencing utmost poorness if spending per individual is lower than the minimum of existence. Households whose expenditure is below the social minimum are in a state of poverty, which is called social exclusion in the report.
The existential minimum is expenditure to cover the needs needed to last in wellness – and for only 1 or 2 months. In turn, the social minimum is intended to let full participation in social life, so it includes spending on leisure, recreation, participation in culture. It should not be confused with another indicator, or comparative poverty, which is defined as income or expenditure below 60% median or 50% average.
The social minimum was included in the discussion on social policy as early as the 1980s. any parties, e.g. Self-defense, have called for a social minimum. The controversy was so large at the time that the CSO stopped publishing data on the number of people surviving in the area of poorness for 7 years.
So what precisely are we talking about?
Extreme poorness is expenditure under PLN 913 per period in the case of a single-man farm and below PLN 2456 in the case of 2 adults and 2 children. As far as the social exclusion region is concerned, for a single-person holding it starts below PLN 1711 per month, in the case of a 2+2 farm below PLN 4620.
We talk about expenses all the time, not income?
Yes, it is simply a methodology adopted by the Central Statistical Office since the 1990s, for example to overcome problems related to the income generated by any households in the grey area. Families participating in the survey get a peculiar book, where they evidence their expenses.
Why specified large numbers as utmost poorness and the social exclusion zone? What happened last year?
There are many reasons, both social policy and macroeconomic factors. Inflation began to grow as early as mid-2021, in 2022 it was very advanced and this condition continued in 2023. In addition, last year there was small economical growth, only at 0.2% of GDP.
High inflation has a very negative impact on the spending of poorer households, as they mostly have no financial gap. Most of them spend everything they earn, and most of the time they inactive have debts to pay off, so rising prices here means serious financial stress.
If the government does not value cash benefits according to price increases, there is, at least in the short term, a problem of how to finance expenditure at pre-price levels – in consequence to it poorer farms simply start to quit part of consumption. This was the case in 2023 erstwhile the real slowdown in the economy and the emergence in prices – accompanied by a media message of terrible cost – led to a simplification in household spending.
And due to the fact that the poorness limits set by IPiss are even more valuable than inflation, many families are below their threshold by reducing spending. The educational benefit (500 plus) was increased by PLN 300 only from 2024 – and household benefits supporting the poorest families are frozen at the same level since 2016. The statutory criteria for social assistance in 2023 were lower than the minimum of existence. That means that even part of the household surviving below that threshold was not eligible for aid. Rulers should not let specified situations.
In the discussion on your report, there have been voices that it shows that the household benefit does not work as a tool for reducing poverty, and that it needs to be decidedly reconsidered, possibly even as it stands. What are your thoughts on this?
Mostly that household benefits should be valued. If kid benefits were valued, utmost poorness in 2023 would not increase so much, especially kid poverty.
Poland has a two-pillar strategy to defend families from poverty. In addition to universal educational provision, we have income-dependent household benefits and social assistance. The problem is that for years both benefits stood still. The erstwhile government was in the position that 500 plus solves the problem of household support and so there is no point in raising household benefits. possibly the erstwhile government would have even liquidated household benefits if he had not feared the political consequences of this. The current policy continues: the budget for 2025 plans to frost 800 plus, and the criteria and levels for household allowances do not change.
Will the 500 plus alone aid solve any of the poorness problems mentioned in the report?
Let's start with the fact that it wasn't valorization, it was a one-off election raise. Valorisation means a permanent, automatic mechanics for the growth of a certain benefit, e.g. linked to inflation. I am afraid that the 800 plus the current government will only begin to wonder around 2027 how the next election will be.
However, in terms of the effects of the 500 plus increase, this year in general will be better than 2023. economical growth will most likely be around 3%, surely not 0.2%. Inflation will proceed to be high, around 5%, but it will no longer be 11%. At the same time, prices of specified products as energy are increasing, so it can't be said that the situation has already returned to what we had, let's say, in 2019.
The question is now: what will be the year 2025? Already at the end of 2024, 800 plus will be little valuable than at the beginning of the year, and by the end of 2025 its real value will proceed to fall and it will be worth about PLN 725. Let us besides remember that 500 plus, erstwhile they were introduced, was 37% of the minimum wage, present 800 plus is only 24% of this salary. Thus, despite the increase in inflation, the benefit is comparatively little generous than at first.
I think that the situation in 2024 may improve, but next year the problems that occurred in 2023 may come back. This is due to the deficiency of political will to take care of both pillars of support for families. If we presume that we cannot increase the universal benefit in 2025 – due to the fact that we gotta spend 150 billion on the army – then we should at least take care of household benefits for mediocre children.
You mentioned a minimum wage. Should it not be more effective to eradicate poorness in fresh years? In 2023 the minimum wage was 2709.49 net. So technically, the 2+2 family, where both people work for minimum wage, with 500 plus for 2 children, should be outside the sphere of poverty.
Minimum wage is not a good tool to fight poverty. She only includes full-time employees. If we are working little than full-time or for contract contracts little than a tenure, we can get lower income than a minimum wage. It does not take into account the needs of the family. The same is for a single individual and individual who has a household to support.
From the data we have available, it is besides clear that in families that receive most of their income from work – not from, for example, various social transfers or self-employed work – utmost poorness increased importantly in 2023.
I pay the minimum as a tool for reducing poverty, but not only must be supported by various benefits, specified as household benefits. In 2022, various disposable benefits were introduced as part of anti-inflation shields, e.g. carbon and then electric. The mediocre families were truly waiting for them. I remember talking about them with a planet Bank expert who told me that these benefits could have prevented the emergence in utmost poorness in Poland in 2022. Only in 2023 most of them were gone.
A book late published Zero poorness Society. Ensuring a Decent Income for All (A society without poverty. Providing a dignified income to everyone) by Ive Marx and Sarah Marchal. They identify the 4 pillars on which policies must be based that effectively combat poverty: I pay minimum universal household benefits, benefits for mediocre families, and yet various additional benefits, specified as mitigating energy poverty. We have specified a strategy in Poland, we just gotta take care of it, valorizing benefits. If we were doing this, due to inflation and slow economical growth, poorness would most likely increase in 2023, but not as much as it did.
The study states that people who have different forms of assistance do not always benefit from it. Why? Is this about stigma?
The fear of stigmatisation is surely a serious problem. Therefore, it was so crucial to introduce a universal benefit for children – although at first it was only common for second and subsequent children, it was the first 1 with a profit criterion. And then you could see that people had a problem admitting that they were besides getting married first.
Social assistance is surely the most stigmatizing, covering the poorest – it is simply a separate system, different from benefits for mediocre families. utilizing it requires a social individual to be admitted at home with a comprehensive household environmental interview questionnaire. Social assistance benefits for those able to work are besides so low that any may consider that they are not worth the effort to get them.
What can be done about this problem?
It would surely aid to automate the full process and reduce situations requiring social workers at home. Only on the another hand, politicians fear that if aid is besides easy to obtain, it will be defrauded by fraudsters. However, if we multiply the procedures to control and defend against fraud, any of the households that it should benefit from, unfortunately there are no perfect systems, we request to decide which of these problems is to be reduced.
In 2023, the poorness of seniors besides increased. The mechanisms like 13th and 14th pensions didn't work?
These are not good tools to deal with the poorness of elder citizens. any of them do not have the right to a pension or pension, so they will not receive allowances either, they are only entitled to social assistance benefits, which, as we said, are very low. If individual is entitled to the lowest pension, they are mostly above the utmost poorness threshold, but at the same time seniors frequently have peculiar needs. For example, they live in apartments that are large and costly and to pay for them, they gotta limit another expenses needed, which shifts them either to utmost poorness or right above it, inactive in the sphere of poverty.
We have a serious discussion about the pension system. For experts, it has long been clear that if we want to do something about the poorness of older people, especially women, then the government must rise and equal the retirement age. However, this will inactive not be a solution for those who will have pensions much lower than minimum or will not have rights to them at all.
For political reasons, it seems impossible to rise the retirement age.
I don't know if these political causes are imaginary. If we proceed to convince the public that this is simply a good and essential solution, will it actually do as it did in 2015 and punish the government that carried out specified a reform? If we even consider that the PO lost the election in 2015 just due to the retirement age, which is not so obvious.
The problem of elder poorness will reduce someway widow’s pension?
Yeah, but she's not gonna include the poorest seniors without pension rights or singles again.
The budget is presently under discussion and these problems we are talking about do not appear in it.
No, no, no, no, no. Although the active parent package, worth respective billion PLN, was introduced for families, where both parents work at least part-time. So you can't say that the PO behaves like in 2009 and cuts everything. Tusk may have learned that sometimes it is just essential to tell the Ministry of Finance that there must be resources for certain social expenditure.
At the same time, we discuss all specified expense whether we can afford it, and completely outside the discussion is that we will spend half a trillion PLN on reinforcements between 2025 and 1927. Is it essential and deliberate spending, or is it rational?
If the government asked you about the advice: "What to do with poverty", what are the 2 or 3 most urgent moves before 2025?
The most urgent is to improvement the income criteria entitling social assistance and household benefits – a pillar dealing with the poorest households. 1 might besides think about integrating the system, for example the introduction of 1 educational and household benefit, which is common, but besides increases for households with little income.
Secondly, erstwhile it comes to pension schemes, the aim should be to guarantee that the lowest pensions are sufficiently high, at least 20% higher than the social minimum for seniors. Finally, thirdly, a mechanics of genuine valorisation – not electoral increases all 4 years – of all educational and household benefits is needed. For any of them, the basis for valorisation should be the minimum wage, not just inflation.
What will be the social cost of letting go of poverty? What arguments would you usage to convince the public that it is worth investing in?
The fight against poorness is primarily a substance of value – those who are the weakest in our society should be simply well protected and effectively supported. This is the value of solidarity, something very basic to me.
In terms of multi-generational costs, however, the harm to poorness for parents, through stress and conflict, translates into wellness and educational outcomes for children and their subsequent lives as adult workers and citizens.
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Dr. Ryszard Szarfenberg – a political scientist specialising in social policy, poorness and exclusion, prof. at the University of Warsaw, worker of the Institute of Social Policy of the University of Warsaw, president of the Executive Board of the Polish EAPN Committee (European Anti- poorness Network).
