Poverty and inequality in the Czech Republic

At first sight, according to mostly used indicators, the Czech Republic seems to be a very equal country with low poverty and inequality. However, the real situation is more complex as many citizens find themselves just close behind the poverty threshold.

One of the mainly used measures of inequality is the Gini coefficient. Ranging from 0 to 1, the Czech Republic scores well with 0.246, whereas the EU-28 average was 0.305.  Not only the number itself, but also its perception and reflection in society are important.
Also poverty indicators seem to offer a positive picture. In 2004 the income poverty threshold was surpassed by 9.7% of the population, which seems to be an excellent number in EU comparison [1]. There are however some “buts” to this: 

  • A highly important role is played by social transfers [2] that actually halve the income poverty. Their abolishment or just stagnation (e.g. pensions [3]) threatens to throw large amount of people into poverty immediately.
  • The threshold is rather weak, as according to statistical findings many people find themselves very close to the threshold. The difference is played by hundreds of Crowns (100 Crowns is not even 4 Euro) and this shows how very sensitive to any political change the income poverty is.
  • The methodological line is somewhat doubtful. As the Czech researcher Hana Popelková [4] found out, the statistical findings are only made in typical household flats. That means that shelters, social institutions, homes for the elderly and also the homeless are excluded.

There are about 100,000 people living in social institutions, in various shelters or homeless. This increases the number of poor significantly.
Mostly threatened by poverty are single parents. Here it shall be stated that in this category the Czech Republic stands on the top – regarding how much a single parent with two children has to work to lift him/herself and the children out of poverty. “Thanks to” very low minimum wage it means 79 hours a week, which tops all OECD countries.[5] Single parents, usually women, are threatened by poverty more than any other group (35%). One of the chronic problems is the owed alimony. The estimates tell that every tenth child cannot afford school lunch and that about half of the alimonies are not paid.
Also pensioners, especially women are threatened by material deprivation. And again,  the statistics confirms that about half of the single seniors are very closely above the income poverty threshold. The situation may be especially dramatic in Prague as the rents are high and there is a considerable lack of social housing. Therefore, we could observe outflow of seniors from Prague, or tragic situations, when seniors pay the rent and nothing more for food or medicine.
The social sensitivity of the issue manifests itself when we take into account those who (yet) did not fall into poverty, but are really close to it. According to an expert in this field, sociologist Libor Prudký, more than 240,000 people face the danger of becoming homeless. By 20% of households make the rent and connected fees 40% of family income. It does not take much to become homeless, stresses Prudký; it can be job loss or illness.
Despite the officially presented numbers that offer a very positive picture in categories of inequality and poverty, the reality is rather different. The social situation remains very sensitive, which also has deep impacts on the political sphere.

1. See Eurostat for more comparison: http://ec.europa.eu/eurostat/statistics-explained/index.php/File:At-risk-of-poverty_rate_before_and_after_social_transfers_and_at-risk-of-poverty_threshold_%28for_a_single_person%29,_2012_and_2013.png 2. Smaller impact is by the children´s poverty.
3. The former right-wing government changed the formula for pension valorization that harmed the pensioners.
4. See Hana Popelková, Vývoj chudoby v ČR [Development of poverty in the Czech Republic].
5. “Viel arbeiten und trotzdem arm bleiben“, Die Zeit, 11 August 2015, http://www.zeit.de/wirtschaft/2015-08/mindestlohn-arbeitszeit-oecd-vergleich