Politicians often want the public to focus on economic prosperity as measured by GDP growth, falling unemployment rates and other indicators of affluence.
While these statistics are relevant to every country, there are many more indicators that need to be watched if we want to have a comprehensive understanding of prosperity and well-being in society.
Malta, like the rest of the western world, faces tough challenges in the decades ahead. Inclusive growth was one of three priorities of the Europe 2020 strategy defined 10 years ago, the others being smart and sustainable growth.
The time has now come to ask ourselves whether these objectives have been achieved.
Eurostat has published some statistics that aim to measure the level of poverty in the different member states. These statistics look at the present prevalence of poverty from different dimensions. AROPE – at risk of poverty and social exclusion – is one of the leading indicators of how successful a country has been in promoting inclusive growth.
In 2019, Malta’s AROPE amounted to 20 per cent of total households, quite near the EU average. However, a detailed analysis of this statistic reveals that some sectors of our society are struggling much more than others. More than half of households with a single adult and dependent children are at risk of poverty and social exclusion. This is significantly higher than the EU average.
Other disturbing indicators are that about 25 per cent of those over 65 years of age are at risk of poverty – a much higher rate than the 16 per cent EU average.
Even more worryingly, about 41 per cent of all people living in single-parent households were in persistent AROPE.
This indicator measures the level of income below the poverty threshold for four years.
There is a high risk that politicians will pick and choose some of the myriad analytical statistics of poverty to make a political statement.
But this is not what matters for the well-being of our society. Admittedly, poverty will never be eliminated entirely – the poor will always be with us.
However, it is abundantly clear that children and the elderly are among those at the highest risk of poverty. For these people, the prime minister’s desire to protect our “quality of life” has no meaning when they do not even enjoy the benefits of a decent livelihood.
Even if one were to make allowances for the amount of wealth generated in the black economy that is unlikely to be captured by official statistics, much more needs to be done to ensure that more people benefit from a growing economy.
The top priority should be to define better strategies to prevent more children, especially those living in single-parent families, from being caught in the poverty trap. Support for such families should go beyond the universal children’s allowance and stipends system.
Redistributing benefits and helping parents to find stable, full-time employment are key to addressing this issue. If all parents from poor families were in paid work, the poverty rate for individuals in households with children would fall.
This, however, would require that Malta rethink the policy of promoting economic growth based on the importation of cheap labour.
Income inequality has risen and remained stagnant in the last decade. Malta’s is not much better or worse than other western countries. But we need to be more ambitious in the fight against poverty.
We need to build an economy where every child and every pensioner are not at risk of poverty.
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