Last Updated on Thursday, 24 October, 2024 at 9:23 am by Andre Camilleri
Dr Lina Klesper is International Legal Assistant with PKF Malta
On 17 October, the world observed the International Day for the Eradication of Poverty. This year’s theme – Ending Social and Institutional Maltreatment: Acting Together for Just, Peaceful, and Inclusive Societies –highlights the hidden dimensions of poverty, calling for a united effort to address the injustices faced by those living in poverty. These issues are central to Sustainable Development Goal 16 (SDG 16), which promotes peaceful and inclusive societies, and SDG 1, which aims to end poverty in all its forms.
As we strive to eradicate poverty, reducing inequalities within and among countries remains vital, which is the focus of SDG 10. Rising global income inequality, exacerbated by the cost-of-living crisis, has alarmingly increased poverty rates within nations, presenting significant challenges – particularly for often overlooked groups such as migrant workers and retirees. As the cost-of-living skyrockets, especially in urban areas, the gap between what people earn and what they need to cover basic expenses continues to widen. This disproportionately affects migrant workers and retirees, whose vulnerabilities are shaped by factors such as immigration status, age and gender, contributing to intersecting disadvantages.
Migrant workers and retirees often experience forms of poverty that are less visible but equally devastating: working poverty and old-age poverty. These “hidden dimensions” of poverty speak directly to the 2024 theme of social and institutional maltreatment, as systemic inequalities push these groups into financial precarity. To address these issues, we must recognize how both income inequalities and the high cost of living perpetuate poverty, even in high-income countries.
Across Europe, migrant workers play crucial roles in sectors like construction, domestic work, and services – yet they are often underpaid, facing systemic wage disparities. According to a December 2020 report from the International Labour Organization (ILO), migrant workers in high-income countries earn almost 13% less than national workers, with the wage gap in countries like Italy widening to as much as 30%, compared to 27% in 2015. This growing inequality makes it difficult for migrant workers to escape the “poverty trap” of working poverty, where full-time employment still leaves them unable to afford basic necessities like housing, food and transportation. Structural inequalities, such as limited access to higher-paying jobs and inadequate social safety nets, fuel this cycle of poverty.
Old-age poverty is another critical issue in Europe, particularly in ageing populations. Retirees, especially women, face the dual challenges of inadequate pensions and rising living costs. According to data from the European Commission, in 2016, 22.8% of women and 15.4% of men aged 75 or older were at risk of poverty or social exclusion. For individuals over 65, more than 12% live in relative income poverty, defined as having an income below half the national median household income.
Pension systems in many countries fail to keep pace with the rising cost of living, leaving retirees—particularly women, who may have had lower lifetime earnings due to gender-based wage gaps—struggling to cover basic expenses. In addition to financial hardship, retirees often face social exclusion driven by ageism, poor health, and limited opportunities to participate in community activities.
For these particularly vulnerable groups, inequalities, poverty and the cost-of-living crisis can have far-reaching societal consequences, such as social exclusion. When these groups lack the financial resources to engage in social activities, it deepens their isolation and further entrenches poverty. On a larger scale, extreme wage disparities in many European countries contribute to residential segregation, weakening social cohesion and exacerbating social tensions.
It has become clear that to tackle rising income inequality and the specific challenges faced by vulnerable groups such as migrant workers and retirees, policymakers must implement targeted measures. A solution that is not discussed enough is establishing a living wage that reflects the real cost of living in today’s expensive urban environments. While many countries have raised their minimum wage, these increases often fall short of addressing the widening income gap. A living wage ensures that even those in low-paying jobs can afford basic necessities, helping to alleviate working poverty.
Another vital policy measure is a redistributive tax system. By taxing the wealthiest individuals and businesses at higher rates and redistributing those resources to lower-income groups through subsidies or benefits, governments can reduce income inequality. This approach also provides essential funding for public services like healthcare, education and social protection, which are crucial for lifting vulnerable populations out of poverty.
Beyond financial reforms, addressing social exclusion is critical to combating poverty. Retirees need more opportunities for social inclusion through affordable housing and community programs, while migrant workers require better access to social safety nets and skill development programs. Ensuring these groups can fully participate in society is essential to breaking the cycle of poverty.
Reducing income inequality and fighting poverty is not just about economic justice—it is about creating a more equitable, inclusive, and sustainable future. Policymakers must act now to close the gap, address working and old-age poverty, and build a society where no one is left behind.
