Will one million Dutch people end up in poverty in 2024?
Why "social security" is suddenly a buzzword
Last week, everyone in Dutch politics was talking “social security,” bestaanszekerheid.
This came from scary new predictions about poverty in the Netherlands, and a big announcement from the government about combatting it.
Poverty Predictions
In August, the Central Planning Bureau announced that without government intervention, the number of people in poverty would increase by almost one percentage point, to nearly one million people, in 2024.
Why? A lot of bad things happening all at the same time: the end of Corona-era aid, the Ukraine war and ensuing energy crisis, inflation, and interest rate hikes.
For a single household in the Netherlands, poverty is defined as an income of under 1,515 euros net per month for a single household.
The government is freaked out
Budget Day was last week, when the cabinet announces the budget to the House of Representatives.
And initiatives to combat poverty dominated this year’s talks.
The outgoing cabinet announced that it would allocate more than two billion euros in purchasing power support for the lowest income brackets, paid for by higher taxes on wealthy people.
Cigarettes and alcohol will also be taxed higher. The tobacco tax will increase by 60 cents per pack of cigarettes, and the alcohol tax by 16.2 percent.
Why does anyone care?
Poverty doesn’t have to become a cause of national concern. People are in poverty all the time. It’s suddenly in the news and rising to the level of two billion euros in funding for a reason. So why now?
A few ideas.
Widespread financial stress
In the last couple of years, not only people in or around the poverty line have struggled.
As Rik Rutten wrote in the NRC last week:
The pandemic and subsequently the skyrocketing energy prices have proven that [terms like ‘social security’ and ‘broad prosperity’] are not just about the bottom line. Anyone who had a successful restaurant could suddenly find themselves without diners and without income during corona times. During the energy crisis, a beautiful old owner-occupied house could suddenly become the source of an exploding energy bill due to its old single-glazed windows. Economic uncertainty became tangible for much larger groups, and political interest increased accordingly.
Financial insecurity came even for the right wing, in other words.
The Omtzigt Effect
Pieter Omtzigt is by a landslide the current frontrunner for Prime Minister (the next election is in November), and social security is at the center of his campaign.
Bart Funnekotter wrote in the NRC:
After Pieter Omtzigt put the subject of social security on the map, politicians have fallen all over themselves in recent weeks to underline the importance of this theme.
Omtzigt is perhaps most known for playing a crucial role in exposing the “benefits scandal” (I wrote about this in detail in May) which ultimately brought down the government in 2021.
He now promises “good governance.” And in this chaotic moment in Dutch politics, a lot of politicians are starting to look a bit more like him.
A little history.
Wow! The right to what we are calling “social security” is actually written into the Dutch Constitution.
I’ll quote it here since this blows my American mind.
Article 20 reads:
1. It shall be the concern of the authorities to secure the means of subsistence of the population and to achieve the distribution of wealth.
2. Rules concerning entitlement to social security shall be laid down by an Act of Parliament.
3. Dutch nationals resident in the Netherlands who are unable to provide for themselves shall have a right, to be regulated by Act of Parliament, to aid from the authorities.
Johan Rudolph Thorbecke, the founder of the Dutch Constitution, said in 1844:
“When, with increasing wealth on the one hand, poverty spreads on the other; when the rich must become even richer, the one who has little must become even poorer; what is the legislation that offers citizenship to all under a condition attainable by few, what is that legislation, if not irony?”
How modern Dutch politicians respond to rising poverty is up to them. But they are constitutionally required to do something about it, one way or another.
So about those one million people?
Digging into these poverty numbers will make your head spin. It comes down to various definitions of poverty.
Peter Hein van Mulligen, chief economist at CBS, told the Volkskrant:
‘You may think that there is too much poverty in the Netherlands. But there is no statistic that proves it is getting worse.’
In any case, it’s clear that millions of Dutch people now face economic uncertainty. And whatever reasons lie behind the government’s two billion euro investment in poverty-reduction schemes, hopefully it will help.
🥳 LEUKE DINGETJES
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