Are Czechs least threatened by poverty of all EU nations?

Germany’s Federal Statistical Office recently released an analysis which says that the Czech population is the least threatened by poverty of all the EU member states. According to data from 2008, some 8.6 percent of Czechs, or over 900,000 people, face poverty risk. But critics say these numbers have little relevance, and poverty is looming over many more Czechs. Jan Richter has the details.

Photo: European Commission

According to the analysis by German statisticians, 16.3 percent of people living in the European Union are under threat of poverty. The worst ranking countries are Latvia, Bulgaria and Lithuania, each with more than 20 percent of their populations facing the risk of destitution. At the other end of the chart is the Czech Republic, with some 8.6 percent.

The average monthly salary in the Czech Republic in the third quarter of last year was just over 23,000 crowns, or 1,300 US dollars. According to the statistics, some 900,000 people live on 60 percent of that, which is less than 14,000 crowns a month.

Very similar results appeared a year ago when the EU’s statistics body, Eurostat, released a study which said that 9 percent of Czechs were threatened by poverty. Both analyses measured how many people earn less than 60 percent of the average income. But Tomáš Tožička, from the NGO Czechia against Poverty, says the reality is bleaker than that.

Tomáš Tožička, photo: Deník Referendum

“If we just take 60 percent of the median income as the main indicator, it doesn’t say almost anything about poverty. A more sophisticated indicator would for example be purchasing power parity which says how much people can buy for let’s say one hour of their work. From that point of view, we see very different results.”

Looking at the charts based on purchasing power parity with regards to the country’s GDP per capita, the Czech Republic ranks 36th on a list compiled by the International Monetary Fund in 2010.

Tomáš Tožička also points out that the statistics are based on data from 2008, the year when the global financial crisis began. Since then, unemployment in the Czech Republic has risen by some two thirds putting more people at poverty risk. Another issue is the impact of the Czech government’s budgets cuts. In a move criticized by the opposition, the right-of-centre coalition plans to save 11 billion crowns this year on unemployment and other social benefits.

However, one thing the statistics do suggest is the relatively even distribution of income within in the Czech society. Most people earn less than the average but more than what is considered a poverty threshold. Tomáš Tožička says this goes back further than the four decades of communism when everyone made more or less the same money.

'Ghetto Nr. 1'

“I think the tradition of a welfare state and some social cohesion within the society is much longer, longer than some 150 years, so the communist regime was only a part of the process. But the situation is developing very rapidly, and we will see how long it will last.”

In the Czech Republic, people over 65 years of age as well as families with three or more children are increasingly threatened by poverty. And so is the country’s Romany community whose numbers are estimated between 150,000 and 300,000.