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INEQUALITY IN EUROPE IN THE EARLY 21ST CENTURY
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An overview of the causes of trends
towards social polarisation
The polarisation recorded by statistics that is be-
ing seen across broad swathes of Europe essen-
tially derives from two basic tendencies: the rich
are becoming richer and the incomes of the
poorer members of society are becoming dis-
connected from economic growth. It is not our
intention here to delve further into the dynam-
ics of accumulation at the top of the income
scale and will instead leave that aside by making
the obligatory reference to Thomas Piketty and
the ensuing debate. Rather we are more con-
cerned with what is happening at the lower end
of the income scale. Here some propositions:
the percentage of people whose income lies far
below the national standard (or the median in-
come, in more precise terms) can primarily be
ascribed to the shortage of “decently” paid
jobs. A great many of the people who are de-
pendent on the income they derive from work
either cannot find a job at all or only one that is
poorly paid. At the time of the aforementioned
reference, forty years ago, the number of peo-
ple in both categories, the unemployed and
those on low wages, was considerably lower in
the richer countries of Europe.
An additional factor is the decline in family
solidarity in many countries. This means that
people have access to a lesser extent to income
earned by others, spouses in particular, but also
parents or grown up children. They live alone in
their homes, which they alone are left to pay
for. More and more mothers, but fathers too,
are raising children without the support of a
partner. This reduces their earning opportunities
on the labour market and at the same time in-
creases their irrefutable costs.
Finally, mention must be made of qualifica-
tion for the labour market. This has always
essentially hinged on education. Even though
formal access to the education system is no
more exclusive than it was in the past, at least in
the West, because of the increase in migration,
the issue of a language and culture barrier has
become more important. Migrants now make
up a significant share of the population across
the Union and many of them are at a clear dis-
advantage when it comes to acquiring qualifica-
tions that will count on the labour market. This
is reinforced and consolidated to a certain ex-
tent by the formation of corresponding sub-
cultures in certain residential districts. In the
former socialist countries where immigration
plays a less prominent role, trends towards a
certain polarisation of what was once an egali-
tarian education system took hold –good pri-
vate schools for high-income groups and not so
good public schools for the rest.
Part of this social polarisation syndrome also
has to do with the welfare state. From country
to country to differing degrees and in different
ways, the welfare state has clearly had a cush-
ioning effect on polarisation. But its architecture
and its resources were never meant to compen-
sate for a lack of earned income on a massive
scale. The part of the welfare state that is in-
tended to uphold earlier living standards once a
person’s working life had reached an end (the
pension system), is reinforcing social polarisa-
tion because low earnings inevitably lead to low
pensions. The part intended to prevent income
from dipping below a certain poverty threshold
(known as “welfare” in America) is increasingly
in demand because earnings no longer offer
protection from poverty. In this respect, increas-
ing social polarisation has gone hand in hand
with increased welfare state spending. The wel-
fare state, however, has been coming under in-
creased financial pressure not only because
more people are having to resort to using it but