TR Monitor

The extent of poverty is larger than how it reflects on rates

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income distributi­on TURKISH STATISTICA­L INSTITUTE’S (TURKSTAT) data tells us so many things. The latest data suggests that the income distributi­on has deteriorat­ed nearly as much as it did during the global economic crisis and that society faces actual poverty with real income loss, including the middle-high income group. only the top income groups raised their real incomes. Meanwhile, income losses reached a devastatin­g state among the poorest in society.

After many articles looking at income levels and the developmen­t in the distributi­on of income, today I will take a look at it from the poverty rates perspectiv­e. First, it’s necessary to note that the income data in the 2020 income and living conditions survey belongs to the previous year. All these data regarding income reflect the situation in 2019. So, the impact of the COVID -19 pandemic is not reflected in this data.

Despite that, the at-risk-of-poverty rate according to the poverty threshold set at 40% of median equivalize­d household disposable income, increased by 0.6 points to 8.9% compared to the previous year. The same rate according to the 50% threshold rose to 15 and 21.9% according to the 60% threshold. The poverty threshold set at 70% of median equivalize­d household disposable income rose by 0.5 points to 29%.

While the non-institutio­nal population rose by 1.44%, the number of people suffering from poverty who are below the 40%, 50%, 60% and 70% income thresholds rose well above the average with 8.46%, 5.38%, 4.15% and 2.95%, respective­ly.

Another critical thing to pay attention to is the poverty rates being calculated according to median income. It’s the middle-income level when you rank household average individual income. The poverty thresholds are the income levels that are 40%, 50%, 60% and 70% of the middle level. Individual­s below these thresholds are considered relatively poor. The relative poverty rates are calculated with the rate of this population on the total population.

So, all calculatio­ns change according to the median income. There’s something unique in the 2019 data. The median income decreased in real terms in 10 years since the 2010 survey that was still trying to shake off the impact of the 2009 crisis. The median real income level, decreased by 0.29% and 1.31% according to the equivalent individual income and household income, respective­ly. So those who are not included in the relatively poor category despite being in the median income group have become poorer compared to the previous year. We’ve already seen it in the real income losses in most of the income groups except for the highest income level.

In short, the actual rise in poverty is more common and deep than what is reflected by the relative poverty rates. And we should expect that the 2020 data, the year of COVID-19, will be worse both in terms of income distributi­on and poverty.

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