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SOCIAL EXCLUSION IS A broad concept describing the numerous ways an individual can be prevented from full participation in society. Its origins lie in debates about the concepts of absolute poverty and relative deprivation and the inadequacy of purely material models of poverty and marginalization. The term emerged in developed nations particularly in the European Union (EU), in the 1990s, where it was enshrined in the EU's Social Charter, and it was recognized as a major social policy concern in the United Kingdom with the establishment of the Social Exclusion Unit after the election of the New Labour government in 1997.

Although the broadening of a definition of poverty to incorporate subjective experiences of marginalization was widely welcomed, critics have identified its role in furthering the political ends of Third Way social policies such as those of Tony Blair's New Labour Party in the United Kingdom. They would claim that strategies for creating social inclusion focus upon including more people in the workforce (seeing work as being beneficial in itself) rather than focusing on wealth redistribution through taxation. In such social policies, social inclusion is premised on individuals’ participation in the market economy, often as low-paid worker, as being preferential to state dependence.

It does, however, recognize the multidimensional nature of poverty and of “being shut out, fully or partially, from any of the social, economic, political and cultural systems which determine the social integration of a person in society,” as phrased by M. Haralambos and M. Holborn. Importantly, social exclusion is a process that happens to people, rather than a process they instigate themselves. It therefore not only avoids the personalization of failure inherent in notions of the underclass, according to C. Murray, but also can encourage analysis of how an individual's marginalization from the mainstream is framed within a context of a globalized market society.

The concern expressed by the EU in the need to tackle social exclusion is tacit recognition that union into an enlarged market economy produces social exclusion as an almost inevitable consequence. It encourages reflection on the linkages between problems that affect people, or indeed geographical areas such as unemployment, poor skills, low incomes, poor health, high crime rates, family breakdown, and bad housing. It also can adapt to accommodate the dynamic nature of mainstream society and material increases in living standards, thus avoiding the limitations of absolute standards of poverty, the thresholds of which are likely to shift over time and place. Social exclusion, while seeing economic marginalization as an important and inseparable part of social marginalization, can be invoked to explain a variety of forms of inequality, such as the circumstances of an HIV-positive individual, a member of a minority ethnic or sexual group, or an older worker unable to find employment in a postindustrial economy.

The United Kingdom's New Labour government's policy responses to its conceptualization of poverty as social exclusion have included the instigation of social programs such as SureStart (for young families in urban areas) and Connexions (for young people trying to enter the labor market). These responses are characteristically joined up in their approaches encompassing education, training, and health, reflecting the recognition of multiple causes of exclusion.

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