Trust in the numbers?
March 29, 2013
Clear and to the point, data released by the Germany's Federal Statistical Office compared two different issues among the 27 member states of the European Union: first, how threatened people in each country are of falling into poverty, and secondly how disparate incomes are in each of the countries.
People in Bulgaria, Romania, Spain and Greece are at the greatest risk of becoming poor. The margin between high and low incomes in these countries is also large. This income disparity is particularly great in Spain, Latvia and Bulgaria. Germany, for its part, is rather inconspicuous, tallying in among the bloc's averages.
In the European Union, 16.9 percent of the population is at risk of falling into poverty. On average in the EU, the highest incomes making up the top 20 percent are 5.1 times greater than the incomes of the lowest 20 percent. But as nicely as all the numbers line up, the tables have come under criticism.
Czech Republic as model?
One country particularly stands out in the statistics: the Czech Republic. It looks as though it's done everything exactly right, grabbing the best spot in both categories. Incomes are only half as widespread as in Spain, which picks up the last spot. It also has the lowest rate of people at risk of poverty. So should everyone be turning to the republic to better structure European poverty policy?
No, Prague should not be the model for the European Union, according to Christoph Schröder of the Cologne Institute for Economic Research. Schröder thinks the informational value of these statistics as limited. "That's because they arbitrarily set the levels for how much of a threat poverty poses," he told DW.
The statistics consider those who make less than 60 percent of the country's mean income as threatened by poverty. In the Czech Republic, for a single person, that would mean earning less than 4,500 euros ($5,765) per year. In Luxembourg, for example, the statistics put the poverty line at about 19,500 euros ($25,000) a year. Such data, Schröder said, lack all the information required to create a realistic picture of national living conditions.
The bigger picture
The institute said that it has examined information not included in the EU study, such as how people in each of the countries perceive poverty, and whether they consider themselves poor. Nearly a third of Greeks said yes, although the German Statistics Office's figures showed a much lower proportion. Other surveys ask Europeans what they can afford, and whether they make enough to pay for rent and heating, a car, and vacations.
Combining data from such surveys produces a more precise picture of reality - one in which the Czech Republic slips into the middle of the table and Denmark and Luxembourg move to the top. Greece, Romania and Bulgaria, however, are ranked last in both sets of data.
"That's about what we had expected," Schröder said.
Statistics aren't enough
Poverty researcher Christoph Butterwegge said that he doesn't trust the numbers released by the Cologne Institute for Economic Research. The researcher from the University of Cologne said the institute represents business interests and is privately funded, which could influence the results the institute publishes.
Butterwegge said the institute's data showed that a uniform minimum wage would be "an inefficient instrument to fight poverty," as poverty threatens mainly single parents and the unemployed. Butterwegge, however, said while these groups would be affected, a "blanket, legally enforceable minimum wage is necessary to prevent the low-paying job sector from growing." He added that while the Cologne institute sees a legal minimum wage as "the devil incarnate," 20 of 27 EU member states have this in place.
Butterwegge told DW that analyzing statistics is like walking a tightrope. "On the one hand you can be highly critical of the numbers, and on the other we need them," he said, adding that the key is correctly interpreting what they do and do not say - then taking the right course of action based on that.