The immediate impact of the global financial crisis and neo-liberal austerity policies on in-work poverty dynamics in Lithuania

ABSTRACT

The article analyzes the extent and features of in-work poverty in Lithuania in the aftermath of the global economic crisis of 2007–2008. It argues that the significant expansion of the phenomenon during this time period was fostered by neoliberal policies that have been shaping the welfare system in the country for more than two decades. Furthermore, it draws attention to employment conditions and seeks to understand the experiences of those who live in in-work poverty. This article reveals that, during the period investigated, in-work poverty in Lithuania was associated with being a woman, having children, belonging to single-parent household, and being employed in a precarious working environment.

KEYWORDS:

• In-work poverty
• fiscal crisis
• austerity
• neo-liberal policies
• Lithuania

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The Asian Tigers are the very successful economies of Hong Kong, Singapore, South Korea, and Taiwan.

2. Indicates the data extraction year.

3. The European Commission defines in-work poor as ‘Individuals who are classified as employed (distinguishing between “wage and salary employment plus self-employment” and “wage and salary employment” only) and who are at risk of poverty’ (European Commission 2009, 11). The relative monetary poverty threshold in the EU is set at below 60% of the national median equalized disposable income.

4. In case of Lithuania, to people whose individual monthly income does not exceed 1.5 times the government-supported income (SSI). During the period of this research, this amount was 525 litas (€152) for one person in a family and for disabled and single individuals this amount was not more than 700 litas (€203), which meant that these people were living below the official at-risk-of-poverty threshold.

5. Notably, while in-work poverty was expanding more rapidly among women, unemployment was increasing faster among men. In 2010, in Lithuania as many as 21.2% of men were unemployed in comparison to 14.5% of women (Eurostat 2017). The higher rates of job loss among men in Lithuania during this period can be explained by the greater deterioration in male dominated employment sectors such as manufacturing and construction. Gruževskis and Blažienė (2011, 6) showed that the highest loss of jobs during these two years occurred in the sectors of construction (73,000 jobs) and manufacturing (52,000 jobs). Sharply increasing levels of unemployment among men and the feminization of in-work poverty undoubtedly could be interrelated: in nuclear families sustained by two adult workers, the case of a job lost by the male partner could make the woman the only breadwinner in the family, which would decrease the household’s work intensity and increase the female in-work poverty risk.

6. In cash or in kind social help, that is old-age pensions, family-related benefits, housing allowances, or social assistance.

7. Less than in Latvia (27.8%), but more than in Romania (25.6%).

Additional information

Notes on contributors

Natalija Atas

Natalija Atas, PhD, was awarded her doctoral degree from the University of Sheffield, Department of Sociological Studies in 2016. She successfully defended her thesis entitled ‘In-Work Poverty in Lithuania: Causes and Consequences’. Her research interests incorporate topics related to areas of welfare, poverty, social problems and stratification. Currently she is a lecturer in Social Policy at the School of Social Sciences, Liverpool Hope University.