One in ten workers in Luxembourg considered 'working poor'

Working 40 hours a week in Luxembourg, but not having enough money at the end of the month? What seems like a contradiction is a reality for many people.

Young people, self-employed individuals, employees on minimum wage, but also single parents: these are just a few examples of the groups that are likely to be part of the working poor. Our colleagues from RTL.lu focused on single parents for their report. According to the National Institute of Statistics and Economic Studies (STATEC), single parents account for 5% of households in Luxembourg.

A testimony

When you see Delfina with her children, you might think that everything is fine. The moments when she can really relax are rare. She lives alone with her children, for whom she is solely responsible. She takes care of them and organises everything around them. She is also alone when it comes to paying the bills. The salary that she receives has to sustain her whole family. At the end of the month, it is often not enough. But the salary is not the problem.

"The problems don't come from my professional situation. I have a good job, I earn quite a bit of money. It's just the system that's broken."

For example, Delfina does not receive alimonies from her father, money that she could use every month. But she is not entitled to state benefits either. She earns too much for that – sometimes she exceeds the threshold only by a few euros. After speaking to someone at the Social Office, she can now go shopping at social grocery shops, where she will either receive vouchers or be able to buy food at a lower price.

Many people who are working go to social grocery shops. Because of inflation, the demand is already higher at the moment. Social Office staff members have noticed that an increasing number of those who book appointments are people whom they have never seen before. Booking an appointment at the Social Office still carries a certain stigma for some people.

Jean-Paul Reuter, coordinator at the Social Office in Differdange, explains that this is clearly shown in a study by the University of Luxembourg. The study revealed that the Social Office still has a reputation for being a "public assistance office".Reuter however, disagrees with that statement. The Social Office's main task is "to inform people, to help them with paperwork, to give them advice, and to guide them". "Of course," Reuter adds, the Office also gives financial aid to people "who are in a precarious situation".

Another factor that affects single-parent families in particular is taxation. Single parents are in the 1A tax bracket, which is not advantageous. They have to pay a lot of taxes while being treated as if they were living alone, despite the fact that they have to feed their family. There is the single-parent tax credit (CIM), which was doubled in 2017, but that would only help a little bit. It mainly helps those with low incomes. Jean Heuschling is the founder of the Facebook page 'Collectif monoparental'. Heuschling feels that this tax credit is too obscure or that many people forget to ask for it. After all, people do not receive it automatically.

The housing problem

No entitlement to financial support, high taxes, being the only person responsible for a household: these are some of the reasons that can lead a single parent into precariousness, even though their salary is high. Housing is another issue, one that has been at the centre of discussions for years. Li Kaufmann found herself in the bizarre situation in which her salary was not sufficient to get a loan to buy a house, but was too high to receive financial support. She had to make a choice and decided to go live abroad.

A complex issue that certainly does not fit every individual story. But those concerned often end up in an impossible situation. Our colleagues from RTL.lu found that many of those they spoke to felt that they are being punished for working. And single parents are just one ofthe risk groups. Falling into precariousness while working is not an exceptional phenomenon.

"Working Yet Poor" is a European study that focussed on Luxembourg. At first sight, the results appear devastating for the Grand Duchy. Luxembourg's poverty rate is 13.5%, and thus above the European average. However, the study's author, Luca Ratti, points out that the causes of the working poor phenomenon are very complex, and that the poverty rate should not be the only element taken into account. In fact, the poverty rate focusses on 'relative poverty'. This means that a median is drawn and that this median is high in Luxembourg. The precise causes of the Grand Duchy's result would be "the subject of further analysis".

The whole project can be found here.

You can also click here to take a quiz to find out if you are working poor yourself.

The full report by RTL Télé (in Luxembourgish):