An unequal union: startling new research into European inequality
Deborah Hardoon Deputy Head of Research
9th Sep 2015
The European Union is home to more billionaires than ever before, while at the same time the proportion of people at risk of poverty is on the increase and two thirds of people believe that their government represents the interests of the few in power, rather than the majority. Our new report, A Europe For the Many, Not the Few, reveals the extent of inequality in Europe and makes recommendations to counteract it. Here
Deborah Hardoon, Deputy Head of Research at Oxfam, presents some of the data from the report and explains what it shows us about the comparative levels of inequality in each country and across the continent.
Europe - home of Camembert and Audi's, Armani jeans and Scotch. The EU is an affluent region, with an average income per person of €26,000 and home to 342 billionaires. But whilst an elite few are doing very well indeed, the reality for far too many Europeans is a life of poverty, deprivation and discrimination.
Oxfam's report published today, A Europe For the Many, Not the Few, reveals some startling facts about the distribution of wealth and income in the EU. The accompanying online data explorer takes a look country by country at levels of inequality, poverty and other socio-economic indicators of gender
inequality and political transparency. The data starts to paint a picture of how these countries compare and contrast and I invite you to explore this data for yourself.
What the Gini tells us
We can start by looking at the Gini Coefficient, one of the most well known measures of income inequality. The Gini tells us with a single number on a scale of 0 (perfect equality, where everyone has the same amount of income) to100 (perfect concentration, where one person has all the income and everyone else has nothing) how equal/unequal the distribution of income in the whole country is.
Alone, the Gini is a very crude measure which attempts to summarise a complex story of the income distribution across the entire country. It doesn't tell us about the depth of poverty on the one end or the extreme wealth and power on the other. So whilst we start with the Gini, other data sources help to complete the picture. Let's take a look at Bulgaria for example. With a Gini of 35, this is the country with the highest level of inequality of all EU
countries, after taking into account taxes and transfers.In Bulgaria, 43% of the population live in 'severe material deprivation' In Bulgaria, 43% of the population live in 'severe material deprivation', without sufficient income to meet their material needs. Bulgaria is the poorest country in the EU with a GDP per capita of just €3,800. There are no billionaires in Bulgaria.
On the other hand, Spain has a Gini coefficient of 34, the 7th most unequal according to the Gini. In comparison to Bulgaria, Spain is relatively rich, with GDP per capita over €20,000 and home to 21 billionaires, but not all people share equally in this wealth. Two thirds of people in Spain believe that the government is largely or entirely run by a few vested interests looking out for themselves and Spain is the 4th worst
performer in the EU on Transparency International's measure for transparency and integrity in lobbying practices.
The other end of the scale
At the other end of the scale, the four most equal countries after taxes and transfers, Slovakia, Slovenia, the Czech Republic and Sweden, all have Gini coefficients after taxes and transfers of less than 25. Slovakia, Slovenia and the Czech Republic all have some of the lowest levels of income inequality before taking into account taxes and transfers, in contrast to Sweden which has the 6th highest level in the EU. In Sweden, progressive taxes and transfers have
worked hard to attenuate the level of income inequality resulting from wages, unemployment and other social, economic and demographic factors.
Even Slovakia, the country with the lowest Gini in the EU, shows signs of inequity. One in ten people in the country live in severe material deprivation and the country scores poorly on metrics for discrimination and lobbying transparency and integrity. Slovenia, on the other hand, stands out as having relatively low levels of poverty, one of the lowest gender pay gaps in the region and the highest
score on Transparency International's measure for integrity and transparency in lobbying.
It's clear that despite many similarities between the 28 countries within the EU, each country faces different drivers of income inequality and choices over social, economic and political national policies have played a major role in affecting the levels of income inequality. What is also clear is that as a whole, the union is now home to more billionaires than ever before at the same time as the proportion of people at risk of poverty is on the increase. Across the EU, 29% of people said that they had witnessed discrimination of some kind and two
thirds of people think that their government represents the interests of the few in power, rather than the majority of the population. In every country, women do more than their fair share of unpaid domestic work, up to three times as much in Portugal and Italy. As a group of rich nations, the 28 EU countries must do better to protect the most vulnerable if they wish to be recognised as thriving societies and effective democracies, rather than places of exclusion and injustice.
1. While some people forge ahead, others are left behind by society. Brussels, April 2015, in the area of the Stock Exchange Building (2015). Photo: Ximena Echague/Oxfam
2. A Europe for the Many, map of inequality data for 28 countries in the European Union. Credit: Oxfam
3. Gini coefficients of EU countries, before and after taxes and transfers (2013). Credit: Deborah Hardoon/Oxfam