European Union Definition of Poverty

UNLIKE THE UNITED States, which defines poverty based on the cost of a food basket with the Bureau of Labor Statistics Family-Budget-Based Measure of Poverty, the European Union (EU) defines poverty in terms of both people's material well-being and ability to participate in their societies.

In official documents from the EU and its member nations, poverty is almost always mentioned together with social inclusion. Families or individuals with incomes below 50 percent of the EU's median income are considered poor. The EU's approach to poverty results from a long evolution that started with indifference to the plight of the poor and has culminated in a humane policy of concern with people's material and spiritual well-being.

In 1771, the English author Arthur Young expressed a view that was popular among the European upper classes in his Farmer's Tour Through the East of England: “Everyone but an idiot knows that the lower classes must be kept poor or they will never be industrious … they must (like all mankind) be in poverty or they will not work.”

At the same time, however, other voices expressed a more humane concern for the well-being of the poor. Adam Smith, often considered the father of free-mar-ket capitalism, worried about the high personal costs imposed on poor laborers and their families in The Wealth of Nations: “The man whose life is spent in performing a few simple operations has no occasion to exert his understanding. … The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment. Of the great and extensive interests of his country, he is altogether incapable of judging.”

By the 20th century, European nations generally had been won over by the arguments of those who wished to alleviate poverty rather than to punish people for suffering it. The Council of Europe adopted the first pan-European definition of poverty in 1975. It declared as living in poverty “individuals or families whose resources are so small as to exclude them from a minimum acceptable way of life in the member state in which they live.” In 1984, the European Commission (predecessor of the EU) added more detail about social inclusion: “The poor shall be taken to mean persons, families, and groups of persons whose resources (material, cultural, and social) are so limited as to exclude them from the minimum acceptable way of life in the member state in which they live.”

In the early 2000s, the main debate in the European Union was over whether the poverty line (at 50 percent of median income) should be set separately for each member nation or as one standard for all the countries of the EU. Because the median-income level varied widely among member nations, supporters of separate national poverty lines argued that a country-by-country poverty line would be more accurate.