Severe Material Deprivation in Malta: 14,000 People Still Enduring

In 2017, the material deprivation rate stood at 8.0 per cent, whereas the severe material deprivation rate stood at 3.3 per cent. In 2016, these rates stood at 10.5% and 4.4%, respectively.

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Material Deprivation in Malta

According to the European Statistics on Income and Living Conditions Survey, during 2017 there were 34,596 people living in materially deprived households. Amongst them 14,393 lived in households that were deemed to be severely materially deprived.

In 2017, the material deprivation rate stood at 8.0 per cent, whereas the severe material deprivation rate stood at 3.3 per cent. Compared to 2016, these rates decreased by 2.3 per cent and 1.1 per cent respectively. This is inline with a positive trend whereby the material and social deprivation rate has been constantly falling since 2014, when it stood at 22%.

A household is considered materially deprived if it cannot afford at least (3) three of the following:

  • face unexpected expenses;
  • one week annual holiday away from home;
  • avoid arrears (in mortgage, rent, utility bills and/or hire purchase instalments);
  • afford a meal with meat, chicken or fish or vegetarian equivalent every second day;
  • keep their home adequately warm in winter;
  • a car/van for personal use;
  • a telephone (including mobile phones);
  •  a washing machine;
  • a colour TV.

A household which cannot afford 4 (at least) of these items it is considered severely materially deprived.

The number of people living in a household which could not afford a colour TV set, a washing machine, or a telephone was negligible (i.e. statistically considered to be too low to be registered by the survey). Only 7,310 people lived in household which could not afford a car. The most unaffordable expense was ” a week-long annual holiday away from home”, as 147,059 people live in household which could not afford it; while 67,836 believed that their household would not be able to deal with an unexpected financial expense of 650 or more. The other expenses could not be afforded by 25,000 to 28,000 people.

The European Statistics on Income and Living Conditions Survey complements the official statistic by collecting a set of supplementary statistics on material deprivation and social exclusion secondary. The number of people who could not afford these expenses is listed below:

  • replace worn-out clothes with some new ones – 11,633;
  • have two pairs of properly fitting shoes (including a pair of all weather shoes) – 14,329;
  • spend a small amount of money each week on him/herself (“pocket money”) – 40,721;
  • have regular leisure or sport activities – 48,025;
  • get together with friends/family for a drink/meal at least once a month – 25,941.

The material deprivation and the severe material deprivation rates among children were markedly higher than those for the average population and stood at 10.9% and 6.1% respectively.

Analysis of Poverty Trends and Contextualisation

Relative Poverty Overview

Another indicator of poverty is called the “risk of poverty or social exclusion” and measures the proportion of the population living in household who earn less than 60% of the median income. The rate of people at risk of poverty or social exclusion in Malta stood at 20.1 during 2016, down from 22.4% in 2015 and the all-time high of 24% in 2013. However this rate had been climbing up since 2008, and is now back to a similar level that it was in 2005: 20.5%.

Poverty Trends, Comparisons and Hypothesis

The material deprivation rate in Malta had been climbing up since the Eurostat started collecting data from 13.5% in 2006 to 20.2% in 2014. The strong economic growth achieved during the last four years has created a record amount of jobs and driven unemployment to an all-time low. This managed to drag a substantial amount of people out of material poverty, as this is highly correlated with low work-intensity households.

The much slower decline in relative poverty is easily attributable to the fact that as the economy grows and the median income increases, statistically it will be harder for some people to keep up even though in reality they are doing much better. This is indeed true, and is probably a huge factor; however we suggest that this superficial calmness is probably the result of a much more dynamic underbelly.

Economic growth does not automatically translate into a better standard of living for everyone (although it does lay down a solid foundation). The median income is being driven up by higher salaries in the IT sector and financial services, but wages in other areas are relatively stagnant. Many middle and upper-middle class families who own a second property have also bolstered their income by letting it out; mainly to tourists and foreign workers. On the other hand the minority of people who rent their dwelling on the private market are having a very rough time.

In nominal terms the only segment of the population having it worse are renters, while the rest are either better off or stable. However as a segment of the population marches ahead either through their salaried profession, entrepreneurship, or return on capital; parts of the working class might witness a gap between themselves and the former open up and widen. While individual progress in itself is desirable , income inequality is highly correlated with inferior results with respect to life expectancy, infant mortality, literacy, homicide rates, obesity, imprisonment rates, social mobility and mental illness.

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