In the dynamics of real household income in the 1990s and the beginning of the millennium, two major periods of development stand out. The first (1990-1997) is characterized by a significant decrease in real incomes.
Their level in 1997 was less than one-third of that in 1990. This decline affected all major sources of income (wages, pensions and social benefits). The reasons are due to the deep economic crisis, financial destabilization, and restructuring of the economy. Learn about Labor Market and Economic Activity.
The second period (1998-2003) is characterized by a process of the slow recovery of the purchasing power of income. As a result of economic growth and financial stabilization since 1997, the level of real incomes of the population shows a clear upward trend. In the period 1996-2003, real income increased by 31.6%. In the last two years alone, their growth is 27.3%.
The achieved increase in real household incomes restored their purchasing power to the level of 1995. This is largely due to the low correlation of economic growth with household incomes.
Some European countries are significantly behind in terms of income compared to EU countries. The average gross gross income per household member of the household in 2003 was EUR 91, while that in the EU is more than ten times higher.
Population income inequality exhibits two opposite trends. By 1995, inequality was increasing rapidly and then declining. Over the past three years, there has been a rebound in income differentiation.
The polarization of the population by income, measured by the ratio of incomes between the poor and the rich, shows the same trends as the differentiation in income. In 1995, the ratio of the ten percent richest to the ten percent poorest households was 11.9 times, and in 2000 it dropped to 9 times. In 2003 this ratio was 9.6 times.
Compared to EU countries, income inequality is not large. Poverty is a multifaceted phenomenon that includes both a lack of resources to meet basic needs and a lack of conditions and prerequisites for a dignified and fulfilling life. Measurement of poverty is based on the establishment of the monetary or material well-being of the population, determined by income or consumer spending.
The NSI estimates for poverty in Europe justify the following conclusions:
Poverty has decreased in recent years. The relative share of poor households decreased from 15.6% in 1998 to 14.4% in 2003. The lowest poverty rate was recorded in 2002 and amounted to 13.4%.
The level of relative poverty does not differ significantly from that in EU countries. Available comparative data show that in 2001 the share of the poor in the EU was 15%, while in Bulgaria in the same year it was 15.5%. For the new EU members, the share of the poor is as follows: Latvia 17%, Lithuania 16%, Estonia 18%, Hungary 10% and the Czech Republic 8%.
Poor poverty line compared to the EU average. The difference in absolute poverty lines is too significant for the country. For EU countries, the poverty threshold in 2001 is EUR 8319 per year and for some European countries it is EUR 639, ie the difference is 13 times.
The reduction of poverty in the country in recent years does not lead to the reduction of persons at risk of poverty. According to the MNS data and the poverty line selected, the proportion of at-risk-of-poverty is around 20%. These are persons in households who have a consumption level very close to the poverty line. For them, even the smallest risk (a change in economic status or employment, an increase in the number of members, etc.) is likely to lead to a drop in the contingent of the poor. Read about the Employment of the population over 50 years. This significant contingent of people at high risk of poverty implies preventive measures to prevent further impoverishment of a large population.
The analysis of available statistical information enables the identification of the following important groups of the poor and at risk of poverty: unemployed persons and households with unemployed persons, economically inactive persons with low income, single parents, large and large households, disadvantaged persons, people with disabilities, illiterate and poorly educated people, ethnicity (Roma and Turks) working poor.
The aforementioned risk groups imply a policy that guarantees the re-socialization of citizens, creates conditions for employment and increased incomes, promotes their access to social services, vocational education, and healthcare, overcomes inequality caused by differences by region, gender, age, ethnicity. , health and more. At the same time, the fight against poverty and social exclusion must be differentiated, taking into account the specificities of each category of poor or at risk of poverty.
Summarizing the results of the analysis of income, poverty, quality of life and expected trends in their development, several key problems can be identified:
- Raising the standard of living and quality of life;
- Focusing poverty on the most at-risk populations;
- Undertaking preventive policies and measures for the at-risk-of-poverty;
- Improving the quality of life in the field of housing, environment, and quality of public services of the population;
- Ensuring healthy and safe working conditions as a process that requires considerable effort from all stakeholders.