“Policies for the inclusion and participation of all citizens are guarantees of social cohesion, the vitality of civil society and peace.” Universal Declaration on Cultural Diversity – UNESCO


It was during 2006, as President of a Regional Cáritas, that I noticed the increase of families’ impoverishment, who until then had stability within the society, and now were becoming the new poor – New Poverty.

When we look around, there is only sensitivity of the population for those who struggle to have the basic living conditions, which are: those who were already poor – “old poverty” as we always knew it; e.g. the homeless. But On the other hand it marginalizes the social extracts who have lived on the outskirts of poverty, and who are now reaching the thin red line of poverty due to governmental policies, and have become victims of social cataloguing – how can someone who dresses well, owns a house, a car and has a job be poor?

This New Poverty is one of the effects of globalization, positioned in the neoliberal pattern, with the deregulation of social security protection and employment precariousness. A phenomenon that assumes models and different characteristics, reaching, people, regardless of their past, who had never been in a poverty condition, and whose common mark is the decline on the income levels, with bulging ruin of the living standards. Serge Paugam points out that this process is not just about the developed countries’ families, but it also affects people who have never lived in difficult conditions, or inhabited slums, but who are in a withdrawal condition from social life, through identity crisis, health problems and in many cases family break – divorces are the most serious cases, generally leading to the homelessness of one of the individuals. Within this new social order, the portrait of poverty is not limited to beggars, homeless, slums etc. As pointed by the sociologist Robert Castel, the new poor are those with a deficit of integration.


Several factors have pushed individuals to this new reality. The new poor are people with jobs but whose salary does not cover their household expenses.


Haroldo Torres, economist and demographer, affirms that improved economy, including in terms of technology, consolidates the concept of “new poverty”. Low education increasingly difficults finding a job.

He also claims that “With economy development, including technological advances, have increased the demand of employers.” and that Today, for a machine operator post or supermarket cashier, companies want required education,”

Social aid

These “New Poverty” members become dependent on social assistance to survive. The biggest problem is that these initiatives, whether by state social security or by charitable organizations/institutions, do not aim to develop the promotion of life for the people in need, they only provide emergency assistance so that the situation does not get worse. Many of these aid programs focus on helping the most vulnerable individuals in the family or group, including negotiating the help for children to return to school, or to keep elderly family in care places, an assistance which works as contracts of compliance by the parts involved.

These organizations/institutions do not apply global policies; their only power is to minimize situations of need. However, the training of their leaders and volunteers could bring understanding and knowhow on doing business, as well as tools for the promotion of life such as administer household expenses workshops, economic meals, etc., as well as counselling to deal with most of the problems they are facing.

The main poverty risk groups in Portugal are the large families and the elderly. The first, due to the number of younger members, and the later because of the subsequent decreasing of their pensions.

There are more and more families asking for help. This class of new poor are individuals who have an income, but it is not enough to face their expenses.. There is also the case of many new young employees who work using the electronic invoice, old green receipts, with low income, and who cannot afford to contribute to Social Security. They eventually find themselves in dramatic situations, and may end up asking for support from the social structures to survive.

State Social Protection

State Social protection is scarce within the European social model and social policies. States agree with the politicians but then fail to guarantee minimum levels of well-being for the population. However, the social aid only reduces poverty by 10%. Although politicians allegedly throw the responsibility of the high levels of poverty to the markets, it is their ineffective social policies that cause this poverty.


Europe is characterized by having essentially two types of poverty. The traditional poverty – “old poverty” less associated with exclusion phenomena, rural, and a current poverty – “new poverty”, urban, and associated with social exclusion. In here the risk groups are retirees, women, immigrants, young graduates, etc., whose numbers always tend to increase. Reports of civil society organizations on unemployment and indebtedness point to the impoverishment of even more individuals, many of whom belonging to the middle class. What is then the impact on society? Are we facing a period of poverty in which these people cannot get out anymore? For a credible response it is necessary to know the phenomenon admitting however, that due to the uniqueness of the matter it is still in the initial research stage. So it is too soon to be able to understand if we have a strictly European social particularity or whether the phenomenon can be found outside the EU. Finally, we have to address the phenomenon globally, because this particular crisis does not only affect the “new poverty” but also the “old poverty”, once that social protection and solidarity become increasingly devoid of means to help. One should also take into account, in this case, that those who usually contributed to combat traditional poverty are those who see themselves in this situation, so the old poverty tend to worsen and increase.

It is in the inefficient and unfair distribution of the public aid system that we find difficult to reduce social inequality. Since it starts on a low basis and the previous policies were not enough, the response has been equally deficient due to the dimension of the current crisis; one of the main causes is the low unemployment benefit which is not enough for the income levels of households, leading families to debt situation.

Current Reality

The increase of taxes and the lowering of pay rates has decreased the consumption. Once people do not buy, shops do not sell, factories do not produce, unemployment rises weakening the state’s social benefits funds. If products are not sold the state’s income from taxes also reduces, so budgets fail; AND to restore the budget, what does the state do? Increases taxes or lowers pay rates… Many countries are facing this reality.

Economy reality


Poverty definitions go through the income matter as well as social exclusion. And this is the cause and consequence of the worsening of recent social problems and the main contribution to define new poverty. We are living the most worrying times for exclusion, as social integration requires the consumption for which families do not have the income capacity. This rejection starts in the younger generation excluding those who do not have certain garments or brand shoes or the latest mobile phone, the same in adult generations where the status of the top car and luxury housing prevails, which were eventually obtained thanks to easy credit. It is given greater importance to having a week’s holiday, decorating the house, participating in leisure activities, going to restaurants and clubs or inviting friends for dinner at home, then to save for the future. There is a structural reason which leads to new social settings and whose epicentre is the financial system and consumerism. In general, the state has been renouncing its role in social protection, the passage from the Keynesian model to the Schumpeterian model means that the state stopped supporting the household incomes which encouraged consumption, stimulated economy and employment. This chaining ceased with the end of the Keynesian welfare state, because individuals have increased expenses that were previously responsibility of the state, such as health and education. This means a reduction of income for other purposes without, however, meaning a change in expenses or life style. Consumption has increasingly become an alternative to the construction of identities and social networks which were structured in the world of work. Imperfection of the state policies has been compensated using credit. Thus, people keep their levels of consumption and the economy continues to work because of credit. The subsequent lack of housing policy strengthens this aspect, reflecting a high use of mortgage loans, which are higher and indebt people for longer periods.

Families and individuals who are now debts are those that accessed the credit, so the new social groups. The default ratios are tell-tale of the state and market failures, but also of solidarity networks, hence the emergence of new poverty.


Globalization is a complicated and contradictory phenomenon, as Sousa Santos stated “A review of studies on the processes of globalization shows us that this is a multifaceted phenomenon with economic, social, political, cultural, religious and legal interconnected in complex ways.” One of the many contradictions of this process is the question of wealth and poverty. The consequences of globalization have a profound impact on the means of production, especially in working methods where inequalities and destruction of social groups, such as family, are deeply affected. Such findings make paradoxically emerge new demonstrations against the current globalization. Resulting from the complexity of these facts, we see that poverty also assumes, “new” ways to express itself, in need of new models and actions for its resolution. It is then necessary to analyse the historical process of the aspect of poverty and its treatment, as well as the appearance of new poverty, in order to be clear about the challenges, the limits and possibilities of actions such as social entrepreneurship for sustainable human development and social emancipation.

Here comes forth the third sector as the state steps away from its social role. It is a fact that this sector has also lost the state support which ensured meeting the minimum conditions of shortage of those in need. The population pays their taxes to the State and then contributes again to the only sector that will bridge this gap. It is on a voluntary basis, by who, somehow, is touched by this new poverty, which private institutions can manage to face the increased demands imposed by the current political situation. However, the fact is that the problems continue to be solved; the new poverty continues to get their basic needs AND the state snicks away never coming back to its responsibility.


Continuing the reasoning about the third sector, it is through these institutions that it is noted that the middle class is now the main contributor for the new poverty. Due to unemployment and rising debt, there is a famine, though not assumed, and out of shame people do not seek for help.

Another situation which is worsening is that of individual entrepreneurs, who for years had a business to run which the crisis made it impossible to sustain. These people have accumulated debts to state’s finances, eager to save the business they are now submerged in debts, and without any help, either by the State or Social Security.

It is on the ground that the third sector can identify new cases every day, cases that are not intercepted or reported, nor seeking help out of shame. Shame of social cataloguing and shame for the living situation that they do not want to be known. They do not realize that the more they delay the more difficult the resolution will be. Searching for help is the solution to solve the problems and needs.


One last question arises conclusively: Who defines who are the new poor? Social Psychologist Jacy Curado, caveated that all these indicators, poverty lines, exclusion etc. should be seen as social constructions produced and mediated by power relations.

The discussion should be expanded so that everyone can participate, because there is still a large backlog, particularly political and by governments, making a development model using an economistic discourse without debating freedom and happiness issues as a form of development. Not only disclosing the creation of industries and businesses to sometimes create unsustainable jobs.

The context of globalization requires a new outline of social policies, and it is there that fits the proposed cash transfer, which has been widely long debated in international forums, and its implementation attempted. All indicators have pointed to positive results, whether in the distribution of income or access to a better quality of life. This idea of the income distribution is contained in the proposed Negative Tax, designed by Milton Friedman, Nobel Prize in Economics, much in use in Anglo-Saxon countries.

The debate on this new social reality cannot be exclusive of economists, because it has many other extensions that they have no knowledge about. As Social Researcher, it is my understanding that politicians should understand the problem in new ways to reach the people through the art of governing people, not numbers. Foucault left a great deal of how to consider politics in neoliberalism, an art of governing with discipline to control the population and the management of individuals.

No one is truly free; they are slaves to wealth, fortune, the law, or other people restraining them from acting according to their will.

Euripides, 400 BC

Antonio Evaristo

Special thanks to Dr Ana Sernadas PhD for the English proofreading.



Alfredo Bruto da Costa (coord.), Isabel Baptista, Pedro and Paula Perista Carrilho, A Look Into Poverty Vulnerability and Social Exclusion, 2008, Lisbon, Gradiva.

Boaventura Sousa Santos (ed), The processes of globalization, in BSS (org), Globalization, fatality or utopia? 2001 Porto, Afrontamento Editions.

Serge Paugam, Social disqualification – essay on the new poverty, 2003 Publisher PUC-SP.

Silvia Ferreira, Faculty of Economics, University of Coimbra, Centre for Social Studies, The new poverty and the welfare mix in Portugal, 2009, Coimbra, Social Network.