Economic and Financial Determinants of In-Work Poverty: EU and Türkiye Assessment

Neoliberal policies have shifted the balance of power between capital and labor in favor of capital and led to a deepening of inequality of distribution. The most devastating effects of this period have been seen on the working class. Consequently, the proportion of labourers who are unable to meet their fundamental needs despite full-time employment has increased. The International Labour Organization's global working poverty forecast for 2023 was 6.4%, but this figure rose to 6.9% in 2024. These factors triggering this increase are numerous, but the most salient of these are the distribution problems that have persisted from the past to the present without losing momentum. This study conducts a conceptual evaluation of working poverty and analyses the economic and financial determinants of working poverty in the EU and Türkiye. The study examines the relationship between working poverty and wage policies implemented by countries, flexible working arrangements, the size of the informal economy, economic crises and vulnerabilities, tax policies, public social expenditures, social benefits, and unionization. Within this framework, the study examines the determinants of working poverty and policies, and uses data descriptively from the European Statistical Office, the International Labour Organization, and the Turkish Statistical Institute. The results obtained reveal that the depth of working poverty in Türkiye is significantly higher than in European Union countries, and that the policy instruments utilized to combat working poverty are inadequate for addressing the problem effectively.