Alleviating poverty in a society produces lasting consequences in the sphere of human development. The methods used to measure poverty start from the definition of a demarcation line between the poorest and the least poor. Individuals or families benefiting from a standard of living located below this demarcation line, conventionally called the poverty line, are considered poor. A standard of living lower than a socially acceptable minimum implies a reduction of the individual's independence in the society of which he is a part and his inability to overcome the respective situation, at which point the state must intervene through public policies to help the individual and his family to get out from that situation. Also, not covering the minimum standard of living accepted in the respective society leads to the social exclusion of those people, increasing the risk of falling into poverty.

Keywords: poverty, risk, human development, normative method

Alleviating poverty in a society produces lasting consequences in the sphere of human development. The methods used to measure poverty start from the definition of a demarcation line between the poorest and the least poor. Individuals or families benefiting from a standard of living located below this demarcation line, conventionally called the poverty line, are considered poor. A standard of living lower than a socially acceptable minimum implies a reduction of the individual's independence in the society of which he is a part and his inability to overcome the respective situation, at which point the state must intervene through public policies to help the individual and his family to get out from that situation. Also, not covering the minimum standard of living accepted in the respective society leads to the social exclusion of those people, increasing the risk of falling into poverty. That is why it is important that social protection programs take into account not only the population below the poverty line, but also the population located in an area of ​​economic insecurity or socio-economic risk.

An essential chapter in people's existence, consumption requires a thorough analysis as it results from the data of the National Institute of Statistics (NIS). According to the data provided by the NIS regarding the socio-occupational categories of Romania, the most affected by poverty, throughout the thirty years of analysis, were the following: in the 1st income decile were the families of the unemployed and those of farmers; in the following deciles 2, 3, 4 were placed the families of unemployed, farmers and pensioners who live from a single average social insurance pension or from one or two minimum guaranteed pensions (the minimum social pension was granted starting in 2010) . In the middle of the income evaluation scale are the families of pensioners, but also those of employees who live on the minimum wage in the economy. The 6th and 7th deciles of the self-assessment scale of the well-being of the Romanian population are the families of retirees, who live on two state social insurance pensions, but also the employees paid above the level of the minimum wage in the economy. The last deciles of income, i.e. 8, 9 and 10, are occupied by the rich blanket of Romanian society, respectively employees paid at the level and above the level of the average salary in the economy, freelancers, employers, specialized people on the labor market who work in international corporations, banks, insurance companies, other specialists working at the top level.

It must be said that the incomes of the population in our country felt the effects of the international financial crisis, which began in 2010, then the health crisis triggered at the end of 2019 and then the economic crisis, a consequence of the health crisis (Covid19). The total incomes of households decreased compared to previous years.

Throughout the period 1989-2021, the ratio between the average salary¹ and the minimum² was maintained between the values of 25.8 and 25.9%, the lowest values reached in the years 2000, respectively 1996 and 65.3% in 1989, respectively 58, 6% in 1990. In the rest, the values of the ratio were positioned between 30-40% (Figure 1).

Method used in RIQL

Figure 1 Analysis of the standard of living: income and expenses from the minimum basket of decent consumption and subsistence of a family of wage earners with children, from urban and rural areas, in the year 2021, during the COVID19 pandemic, as presented in the database RIQL. Data source: RIQL database.3 Calculations performed by Dr. Adina Mihailescu.

The calculation of the living wage results from the study of human needs: biological, hygiene, education, health, culture of people. The complexity of this consumption minimum stems from the multitude and variety of elements, which compete to satisfy people's individual and family consumption needs, but also from the close relationship between these needs and the economic-social framework in which they manifest and develop. The relativity of the minimum standard of living stems from the fact that it is not given forever, but changes according to several factors, among which the most important would be: the level of economic development achieved by the country, the social and professional environment, the climatic conditions and geographical, civilization and culture level, income level, family size, traditions and customs.³

The minimum basket of decent living⁴ involves the calculation of the necessary resources for current consumption: food, clothing, shoes, housing, services, completed with an education and professional training component that favors the affirmation of the person and with a social status component that allows development and participation the individual in society.

 The minimum subsistence basket⁵  provides for aspects related to a person's survival, under the conditions of a short-term public aid, in order to reintegrate that person into society. It is different from the decent minimum precisely because of the elements of development and social affirmation of a person, which do not exist in survival. The two baskets are updated monthly with the inflation rate taken from the NIS.⁶

 In the socio-economic context of Romania and the phenomena that will manifest in the future, among the problems of great importance that need to be solved is the problem of poverty. This calculation of the living wage can be done by several methods, such as: the normative method, the structural method and the subjective method, based on the observations and perceptions of the subjects.

 Among the listed methods, the normative one is also applied in the Research Institute for Quality of Life. Among the arguments that plead for the priority use of the normative method are:

1. In previous years, but also currently, the food consumption recorded in the Family Budgets, currently in the Integrated Household Survey is marked by difficulties in procuring some products and substituting them with others.
2. Prices and tariffs for goods and services intended for personal or family consumption experienced increases in large and different proportions, causing changes in the share of various groups of expenses from the Family Budgets and the Integrated Household Survey; in situations of great imbalance between demand and supply for certain goods and services, the budgets do not provide an equally accurate picture of what the population would consume under conditions of constraint, which is a limitation of the method.
3. The state of uncertainty caused by economic changes, by the instability of the economic-social situation has consequences on the rigor and estimates made by the interviewed subjects, regarding their living conditions.
4. The indicators quite often used to describe the extent and intensity of poverty start from income and consumption. The incomes achieved by various types of consumers: individual, family, household in relation to consumption reflect the real purchasing power of goods and services on the market.
5. The Research Institute for Quality of Life (RIQL) uses the normative method as a method for determining poverty and its extent. It starts from the consumption of the population and is based on norms appreciated by specialists regarding the development and manifestation of the person and his family. Within the RIQL, two minimums were calculated using this method: the decent minimum and the subsistence minimum. In order to be able to compare the consumption needs of family members, the equivalence scale or the consumption per equivalent adult is used. The calculation of consumption per equivalent adult starts from the needs of the first active adult in the household, who receives the value 1; continues with the second adult in the household, it is assumed the wife of the head of the household, who has a consumption of 0.9 of what is needed by the first adult, i.e. the husband. The expenses for the first child represent 0.7 of the expenses of the first adult in the household, i.e. the child's father. The second child consumes 0.5 of the consumption of his father, the first adult in the household. In total, the equivalence scale for the family of two active adults with two dependent children is 3.1 (1+0.9+0.7+0.5).

 Structure of the basket calculated in RIQL and that calculated by NIS, at the level of November 2021.

The basket for employees: from the urban and rural areas
(Tables 1& 2).

Coverage of the minimum consumption basket of different types of income, in the years October 2018, October 2020 and January 2022.

(Tables 3–8).

None.

There are no conflicting interests declared by the authors.

None.

1. NIS. Average net salary values were taken from the Statistical Yearbooks 1990-2021. Bucharest; 2021.
2. Ministry of Labor and Social Protection (MLSP). Values of the minimum salary and child allowances 1989-2022 were taken from the MLSP website. Bucharest.
3. RIQL database 1989-2022. Bucharest; 2022.
4. Mihailescu Adina. "The minimum standards of living in the current conditions in the urban area". Quality of Life Magazine 1-2. Ed. of the Romanian Academy. Bucharest; 2001.
5. Mihailescu Adina. "Minimum levels of decent living and subsistence in Romania in the rural area". Quality of Life Magazine 1-4. Ed. Romanian Academy. Bucharest; 2002.
6. Press release No. January 7 / 11, 2022. NIS, Romania; 2022.