LONG-TERM UNEMPLOYMENT AND HARD-CORE POVERTY IN A POLISH INDUSTRIAL CITY
Wielislawa Warzywoda-Kruszynska, Lodz

• 1. Structural Explanations of the ‘New Poverty’
  • 1.1. The Social Structure Dimension
  • 1.2. New Urban Reality
• 2. Employment prospects, income and social status of the unemployed
  • 2.1 Employment prospects
  • 2.2. Relative Income and Social Status
• 3. Conclusions
• NOTES
• REFERENCES

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LONG-TERM UNEMPLOYMENT AND HARD-CORE POVERTY IN A POLISH INDUSTRIAL CITY
Wielislawa Warzywoda-Kruszynska, Lodz

I shall argue further on that underclass formation in Lodz, the second largest Polish city, is advanced. As discussed in Western Europe, the underclass hypothesis assumes the long-term unemployed to constitute the core of the underclass. It should be underlined, however, that it is not very common in Western Europe to conceptualise the unemployed/poor as the underclass. The opponents use mostly the following arguments:

1. Class divisions ceased to be important in societies undergoing late/reflexive modernisation;
2. European cities lack race discrimination;
3. Ghettoisation process in European cities is not advanced.

Sociologists involved in the debate on the „new urban reality" show no reluctance to categorise urban poor as the underclass pointing out at ‘pockets of poverty’ or ‘soziale Brennpunkte’ in present day European cities. So do I. There are places in Lodz where the inhabitants supported in cash by social assistance make up at least 30 percent of the population living there. The inhabitants who are in need are even much more numerous there. It is hard-core poverty in these places, which seems to become permanent and even intergenerational.

The empirical bases for this article offer two studies carried out in Lodz¹. One of them² was conducted in 1996 and aimed at determining the spatial dispersion of the poor, describing enclaves of poverty and their inhabitants, revealing social mechanisms which lead to concentration of the poor in some parts of the city and elaborating biographies of poor persons living there. The second one³was the study on long-term unemployed selected randomly among those registered in the Employment Office in Lodz in November/December 1998. It was carried out in

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the framework of the UNESCO-MOST project on „Risks of Transformation" headed by Nikolai Genov. Although poor inhabitants of pockets of poverty are mostly outside labour market, the long-term unemployed under study live mostly apart from these pockets. So, both populations overlap only partially.

1. Structural Explanations of the ‘New Poverty’

For the last two decades discussions concerning unemployment and poverty have been overlapping. The so called „new poverty" is claimed to be produced mostly by restructuring and globalisation processes. Their most salient consequence is structural unemployment. This is why the causes of poverty are perceived rather at the societal than at the individual level. But one can hardly find explanation identified with the Marxist tradition, which sees unemployment and poverty as generated by the core dynamics of class exploitation in capitalism. Instead, the most popular explanation is that it is a by-product of changes in the socio-economic order that help to create system-wide redundancies in the labour market. In post state-socialist countries the transformation from the planned economy towards a market economy is said to be the main condition for structural unemployment and poverty. The inclusion of these countries into the international division of labour has created structural unemployment and, in particular, it has been changing production processes together with the working situation of the employed.

This explanation assumes that the sustained economic growth would alleviate unemployment and poverty. It also implies that social policies targeted at the poorest groups should be applied to improve undesired effects of economic policy. The long-term unemployed are perceived to constitute the poorest group in an affluent society.

However, there is a disagreement as to how to conceptualise the poor. The social exclusion theories which focus on the situation of individuals or the processes of social breakdown affecting them consider the unemployed/poor as „social groups in

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the weak sense of the term, being either a simple statistical grouping of individuals with similar characteristics or a grouping of ideal typical social ‘figures’ used to describe the victims of a particular micro- and macro - social exclusion process"(Strobel, 1996:181). Other approaches attempt to describe the unemployed /poor as a social category or even as a social class in the strong sense of this term. One of them is the ‘underclass’ hypothesis developed in the 1980s in the United States and conveyed (Murray, 1990) to Europe, particularly to the United Kingdom. Again, there is disagreement about the nature, source and causes of the underclass. Does it consist of positions, people, values or behaviours? The term ‘underclass’ is used in different and often inconsistent ways, which makes some analysts appeal to avoid it at all (Jargovsky and Bane, 1991). The lack of a working consensus on what the ‘underclass’ is has led to a great deal of confusion.

Leaving aside the concepts focused on individual features and deficiencies of underclass members, the concepts considering the long-term unemployed as the core of underclass can be categorised along social structure and new urban reality dimensions.

1.1. The Social Structure Dimension

„From the standpoint of a distinctively ‘class’ analysis, the question of whether there is an ‘underclass’ can mean quite two different things. On the one hand, it can concern the issue of whether there are certain particularly disadvantaged class situations (original emphasis - W.W.) such as those characterised by casual and temporary work or by protracted periods of unemployment, and, if so, of who occupies these class situations... On the other hand, however, the question can concern the issue of whether there is a distinct social class (original emphasis - W.W.), demographically separate from the working class, and that is characterised by specific „culture of poverty", dependence or other socio-political characteristics" (Morris/ Scot, 1996:52).

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A Marxian-based class analysis sees the underclass as either the lowest stratum of the working class or as the contemporary lumpen-proletariat. According to Marx, the accumulation of capital inevitably leads to an expansion of the ‘surplus’ labour force comprised of four principal segments. Three of them are labelled as floating, latent and stagnant persons who form ‘the reserve army’ of workers. The lumpen-proletariat remains outside the labour force and, thus, the working class. In neo- Marxian analyses (O’Connor, 1973) the notion of „surplus labour" has been replaced with that of „surplus population" to explicitly disavow any significant labour force function of this group. The unskilled ceased to function in contemporary capitalism as an industrial reserve army and became a dependent surplus population. The key resource that defines the predicament of the underclass is labour-power itself. The essential condition of the underclass is that although a person can physically control his or her own labouring capacity that capacity can cease to have an economic value if it cannot be deployed productively.

According to E. O. Wright (1994), the general problem of poverty in contemporary capitalist society needs to be broken down into two sub-problems: poverty generated inside exploitative relations, and poverty generated by non-exploitative oppression. The former corresponds to what is called „working poor", the latter corresponds to the „underclass". Thus, „‘underclass’ can be defined as a category of social agents who are economically oppressed but not consistently exploited within a given class system... Understood in this way, the underclass consists of human beings who are largely expendable from the point of view of the rationality of capitalism" (original emphasis - W.W.) (Wright, 1994: 48 - 49).

Some analysts working within the Weberian tradition also share the conviction that the very poor are separated from the working class. The social class is perceived as a structure of relations founded upon the market. Thus, the structural condition

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for the underclass to exist is a possession of a little or no economic power derived from occupational positions. According to Runciman (1990: 388) the term ‘underclass’ „...stand[s] not for a group or category of workers systematically disadvantaged within the labour market but for those members of British society whose roles place them more or less permanently at the economic level where benefits are paid by the state to those unable to participate in the labour market at all...They are typically the long- term unemployed".

It is a rather commonly shared opinion among social structure analysts that there exist structural positions of the underclass but the cultural underpinnings does not. The debates over underclass conducted among scholars working within the social stratification schemes do not involve the problem of spatial segregation of the poor. The concentration of poverty is not taken by them to be a criterion for the underclass to exist.

1.2. New Urban Reality

The notion of a ‘new urban reality’ as formulated by Peterson (1985) is meant to express the recent and often dramatic structural, economic, demographic, and ecological changes that have swept over the post-industrial metropolis. The transition from the Fordist toward the post-Fordist mode of production and the introduction of new socio-political regulations are regarded as reasons for urban population’s splitting into two parts, which is expressed by the notion of divided cities. One part comprises those who have requisite skills and, thus, place themselves inside the mainstream of society. The second part comprises those who are unable to satisfy the expectations of employers and drift away from this mainstream. There are not only people but also cities which may be classified as winners or losers of modernisation (Dangschat, 1993). Among others, they differ in the way they produce poverty. In the former ones which are dominated by modern production lines and business services and have low unemployment rate, poverty stems from the increase in living

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costs, particularly rocketing housing costs. In the latter, which still are dominated by old-fashioned industrial structures, poverty stems directly from unemployment. In reality, cities prevail „...where there is to great extent both the growth and (original emphases) the decline of branches, enterprises, neighbourhoods and social groups. The structure of poverty in these cities stems from the consequences of the deep restructuring of the regional labour market as it improves its productivity and destroys low-productivity work places. Moreover, interest, lifestyle and polices are oriented more rather than less to the group of winners in the city, and neglect the interests of marginalised people, social groups, industrial and service branches and spatial areas" (Dangschat, 1994:1137).

The modernisation processes occurring in industrial cities are responsible both for the growing social inequality and for the spatial segregation of the poor. The theme of social isolation and spatial concentration is central of Wilson’s analysis of the underclass. For him the primary casual process for the underclass to emerge is the deindustrialisation of the inner city. This may create social situations, especially through spatial segregation, which, in turn, lead to the reproduction of a new cultural order. Wilson argues that exodus of upwardly mobile African-Americans has caused the increasing concentration of the poor in inner city neighbourhoods and the virtual destruction of many local indigenous institutions that earlier exercised the social control necessary for the functioning of a community. Central to this perspective is the role of the neighbourhood as the relevant spatial - ecological unit. „The neighbourhood is both a physical site and an integrative sociocultural context. The neighbourhood forms the immediate arena of extended social interaction in which mediating groups contribute to material, ideational, cognitive, and affective framework that simultaneously offers both constrain and opportunity. This framework of which the neighbourhood is a part constitutes the critical cultural mechanism by which individuals process and subsequently translate broader social currents and

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conditions into individual responses. It is the neighbourhood in which structures such as peer and reference groups operate in conjunction with (or in opposition to) more formal organisations such as churches and schools to produce either social integration or isolation" (Devine and J.Wright, 1993:89). The effects of living in a highly concentrated poverty area are enhanced by the fact that contact between groups of different class backgrounds is either lacking or has become increasingly occasional. This is what Wilson refers to as social isolation. „Unlike the concept of culture of poverty, social isolation does not postulate that ghetto-specific practices become internalised, take on a life of their own, and therefore continue to influence behaviour even if opportunities for mobility improve. Rather it suggests that reducing structural inequality would not only decrease the frequency of these practices but also make their transmission by precept less efficient" (Wilson, 1993: 5). According to Wilson „included in [underclass – W.W. ] are individuals who lack training and skills and either experience long-term unemployment or are not members of the labour force, individuals who are engaged in street crime and other forms of aberrant behaviour, and families that experience long-term spells of poverty and/or welfare dependency..."(Wilson, 1987:8).

Thus, in all accounts following structural explanation of poverty the long-term unemployed and welfare recipients are considered to constitute the underclass. In the following the social situation and employment prospects of unemployed and particularly, long term-unemployed, in Poland with special attention to Lodz, will be discussed.

2. Employment prospects, income and social status of the unemployed

2.1 Employment prospects

In 1995 the unemployment rate in Poland made up 13,7% and in Lodz 21%. The incidence of long-term unemployment made up 40 and 60 percent respectively.

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In the course of the transformation education has become the most salient factor determining labour market prospects. The risk to get unemployed, as documented by studies covering the entire population of Poland (Rutkowski, 1998), is the highest for poorly educated workers. To avoid this risk, they often tend to withdraw from the labour force claiming for disability pension. This is why among them the labour force participation rate is extremely low and makes up 33,2% in comparison with 83,4% among workers with tertiary, non university education and 81,3% among university graduates.

Among poorly educated persons also the incidence of long- term unemployment is very high and makes up among those with primary or less education nearly 50% and among those with basic vocational training 40%, in comparison with 30% among university graduates. In these groups the skill mismatch is of particular importance in generating unemployment. As estimated by Rutkowski (1998) even if there were enough jobs for everyone who is unemployed, inadequate skills would prevent 17 percent of long-term unemployed from finding work. The skill mismatch is most pronounced among those with only basic vocational training who constitute some 45 percent of all unemployed in Poland while jobs requiring this level of education account for only one-third of all jobs.

Also age, gender and place of residence (Table 1) influence employment prospects in Poland but their role is minor in comparison with that of education. It is to be underlined that although the lowest unemployment rate occurs among people being forty of age or more, members of this cohort who became unemployed suffer in at least 50 percent from prolonged unemployment. Also women are afflicted with unemployment, and particularly with long-term unemployment, more severely than men are. While among men incidence of long-term unemployment makes up 35 percent, among women it makes up 44 percent (Rutkovski, 1998: 21):

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Table 1

Labour market prospects by gender, age, education and place of residence, Poland 1995, in percent

	Labour force participation rate	Unemployment rate	Incidence of long-term unemployment
Gender:
Men	66.5	12.1	35.6
Women	51.1	14.4	44.2
Age:
15-17	3.7	15.6	16.6
18-19	36.6	48.4
20-24	68.3	27.1	33.8
25-29	82.9	14.5	38.7
30-34	87.3	13.4	41.3
35-39	88.6	11.4	46.2
40-44	86.5	10.1
45-49	81.6	8.4	51.5
50-54	68.3	8.0
55-59	42.0	7.2
60-64	25.0	4.0	50.0
65+	10.3	1.8
Educational attainment
All levels	58.4	13.1	33.9
University	81.3	3.0	30.2
Tertiary, non-university	83.4	9.3	33.3
Secondary vocational	74.5	11.6	37.7
Secondary general	50.1	15.3	32.7
Basic vocational training	76.5	16.4	38.8
Primary or less	33.2	14.4	47.8
Place of residence
Urban	57.2	13.7	40.4
More than 500 thousand inhabitants	54.9	9.0
100 – 500 thousand	56.2	13.6
50 - 100 thousand	58.0	15.7
20 - 50 thousand	58.8	15.1
10 - 20 thousand	59.2	15.7
Less than 10 thousand	58.9	16.9
Rural	60.5	12.2	38.9

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The long-term unemployed under study carried out in Lodz share characteristics mentioned above. The majority of the sample was constituted by:

1. subordinated workers (83% of all respondents under study)
2. blue-collar workers (77%),
3. people with vocational and primary education (66%) ,
4. women ( 64%),
5. people at least in their forties (52%).

The respondents are aware of the role of education in determining employment opportunities (Table 2). This factor is perceived as a predictor of chance to get a job by more than three – fourths, but nearly all of them claim that age constitutes limitations for reemployment. It is no wonder if we notice that the average age in this population is forty.

Table 2

Factors determining employment prospects according to long-term unemployed, Lodz 1998

Factor	Mean*	Proportion of respondents choosing 4 and 5
Age	4.64	92.8
Personal contacts	4.24	80.3
Education	4.23	79.6
Appearance	3.71	61.2
Honesty	3.40	51.0
Gender	3.34	46.3
Money	3.14	37.6

*Not at all - 1 - 2 - 3 - 4 - 5 - Very much

As much important as education to find work the respondents declare the capacity of having personal contacts. This accords with opinions by some scholars (Morris, 1995) who claim that it is just lack of personal contacts that prevents long-term unemployed

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to enter labour market successfully. The respondents under study do not suffer from lack of personal contacts with people having job in legal economy. Almost all of them (90%) have relatives and friends who are employed but only 20% take their assistance supportive in finding work. It is very likely for friends and relatives to be subordinated workers who cannot provide information concerning vacancies and informal work recommendation. Some of them seem to be very poor since 30 percent of the respondents said that their friends and relatives are supported by social assistance. So are people under our study. Every second respondent lives on social assistance benefit that in Poland is granted on a basis of means testing. It is much more common for the very long unemployed (73%) to be social assistance clients than for those being unemployed for a shorter period (37%). Every third member of the former group and every forth of the latter have a friend or relative living on social assistance relief.

Very bad employment prospects of our respondents seem to be documented by the fact that prevailing majority (82%) did not have chance to work temporally when being unemployed. That does not mean, however, that they do not work occasionally. As showed by our study carried out in enclaves of poverty (Warzywoda-Kruszyñska 1998; Warzywoda-Kruszyñska, Grotowska-Leder 1996) the long-term unemployed participate successfully in the informal labour market tapping the opportunities offered by their immediate environment. An opportunity for earning money can be an open-air market, where they trade in agricultural products deposited with them for ‘commission sale’ by the owners of these products, they clean the market site and also carry heavy goods. They act as guides for citizens of the former Soviet Union, who come here to sell products, smuggled through the border. For those living close to the dumping ground the recovery and sale of thrown out objects is an opportunity of earning money. Living close to a cemetery can be an opportunity for production and sale of ever-burning fires

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from the already burnt out lamps. Women clean more wealthy houses, sew clothes without a permit for entrepreneurs selling them in the open-air market; in summer and autumn they work on horticultural farms or gather forest fruit to sell it later. Their gainful employment is kept in secrecy before employment and welfare agencies for fear that they will not longer qualify for social assistance benefit. Since such relieves are not sufficient to make ends meet it is necessary for these people to supplement this meagre source of incomes. The only alternative for work in the informal sector is criminal activity, in which a part of the inhabitants of strong poverty areas are also involved. Thus, it is not the lack of any work that is the problem for long-term unemployed but rather the lack of employment yielding regular and sufficient livelihood. The recipients of social assistance cannot count on such employment either today or in the future. They have become redundant in the formal labour market as a result of deindustrialisation or modernisation of the production process being unable to meet its requirements. The unavailability of legal employment causes - and such alarming signals are already sent by the social agencies - that in the future old people without pensions will be found in big numbers among today’s long-term unemployed. There are quite numerously represented people, who worked legally for several decades but not long enough to obtain pension rights after reaching the retirement age. Since no firm wants to hire them legally due to the fact that they do not have requisite skills, appearance, age, etc., it is impossible for them to supplement the dole with legal employment, which would qualify them for pension insurance and pensions in the future.

2.2. Relative Income and Social Status

The transition to a market economy has caused vast changes in income structure. Those who have won are first of all white-collar workers (specifically performing managerial functions and serving

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as non-technical specialists) as well as pensioners, and those who have lost are farmers, worker/farmers and blue collar workers. (Table 3). As calculated by J. Sikorska (1998), the rate of growth of per capita income has been in families headed by a manager 136 percent and by non – technical specialist 83 percent higher than the average. Instead, in families headed by a farmer it has been 47 percent and by skilled blue-collar worker 20 percent lower than the average (Rutkowski, 1998: 50):

Table 3

Relative incomes as percentage of average household income
Poland, 1987 and 1995

Household head	1987	1995	1995 – 1987
Socio-economic group:
Worker	99.2	100.2	+1.0
Blue collar	92.7	85.4	-7.3
White collar	112.3	129.8	+17.5
Farmer	108.3	96.5	-11.8
Worker/farmer	101.7	86.6	-15.1
Pensioner	92.6	106.5	+13.9
Self-employed	-	126.9
Welfare recipient	-	54.3
Educational attainment:
University	127.7	159.8	+32.1
Secondary	108.6	107.1	-1.5
Basic vocational	96.2	84.5	-11.7
Primary	92.5	75.8	-16.7

Because of increase in returns to education the gap between the average income of a white-collar family and that of blue-collar family accounts for 34 percent, while before the transition it made up 20 percent. The hardest-hit are families of low skilled blue-collar workers who get unemployed and dependent on social

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assistance. The average income of welfare recipient household is 50 percent lower than the average income estimated for the entire Polish population. As stated by J. Sikorska (1998) exactly the unemployed and farmers feel to be deprived mostly. Both categories declare that to satisfy needs their average income ought to increase 5,5 times.

Table 4

Differences between long lasting unemployed (3 years and longer) and unemployed 12 – 36 months, Lodz 1998, in %

	Unemployed in shorter span	Very long unemployed	Cramer’s V
Cannot make ends meet	27.8	54.5	0.26
Financial situation will get worse	13.0	22.3	0.21
Financial situation will improve	39.5	16.1	0.21
Social status in comparison with peers is very low	12.1	26.1	0.22
Social status in comparison with that of father is much lower	51.6	73.4	0.29
Lives alone	13.0	22.3	0.23
Lives with family	70.4	50.9	0.23
Lives in one-parent family	5.4	10.7	0,23
Primary education	59.6	79.6	0.22
Secondary education	31.8	13.4	0.22
Client of social assistance	37.2	73.2	0.33
Clients of social assistance among friends	24.7	37.5	0.18

Thus, it is no wonder that nearly 80 percent of the people under study estimate their material situation as very serious and serious. Those who claim not to be able to make ends meet make up 54 percent among very long unemployed and 27% among being unemployed shorter than three years (Table 4). There are also

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rather pessimistic expectations regarding future. Only 16 percent among the former and 36 percent among the latter expect any improvement in their finances in one year’s time.

An experience of long-term unemployment and worsening financial situation leads respondents to estimate their social status mostly as low (33%) and very low (17%). Those who experience their social status in such a way are much more frequent ( 62%) among people being unemployed for longer time than among those being unemployed in shorter span (44%). These two categories differ first of all in that how numerous are their members estimating their social status as very low (26% in former group, 12 % in the latter) and middle (43% and 25% respectively).

When required to compare their own social status with that of father when he was in respondent’s age 73 percent of very long-term unemployed and 52 percent of unemployed in shorter span estimate their own social status as much lower and as lower 7 percent and 17 percent respectively. This is an entirely new phenomenon in Poland. In state-socialism people, even those having low social status, felt themselves upwardly mobile in comparison with their fathers (Janicka, 1987). Concurrently it is just marginalised position on the labour market that makes long-term unemployed express low self-evaluation of their place in society in comparison with both peers and predecessors.

3. Conclusions

Unfortunately, we do not have any evidence as to how many long-term unemployed in Lodz live in enclaves of poverty. Even if the majority of them was dispersed among the affluent neighbours, we can expect them to prevail in pockets of poverty. This is due to the housing policy pursued by local authorities as well as to spontaneous processes. In Lodz, the municipal government and urban residents became subordinated to the power and benefits of the market and the logic of growth politics. The slogan

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reads ‘dewelfarisation’ of the city. The inner-city enclaves of poverty are located in most cases on the sites dominated by substandard several storey high tenement houses built before 1939. Most of these houses are managed by the municipality and are deprived of sanitary amenities, without running water and sewage systems in flats, which consist frequently of just one room. The housing authorities in charge of these buildings allot flats in them for people evicted from previous places of living, those who have lost their flats through fire, persons leaving prisons, and so on. It is also here that there are rehoused poor families, who lived earlier in the city parts, which were subjected to gentrification.

The emergence of poverty enclaves is also sped up by the appearance of the private housing market. Wealthier inhabitants of enclaves swap flats in blocks of flats with those who cannot afford to pay the rent offering to repay their debts and give them an additional amount of money. Among those who are not able to pay rent in blocks of flats are the unemployed and particularly the long-term unemployed living on social assistance.

Thus, the process described by Wilson leading to social isolation of dwellers of impoverished neighbourhoods finds exemplification in Lodz. Those who are better-off leave enclaves of poverty and those who are worse-off settle down there. The findings of our study in enclaves of poverty support statements provided by other studies (Alex-Assensohn,1998) which document that neighbourhood social context of concentrated poverty is very relevant to economic marginalisation, welfare dependence, criminal activity and ghetto-specific behaviours. Thus, as Byrne (1995: 96) says "... we must allow for the possibility that dispossession creates situations in which people are constrained to behave in ways which challenge the value systems of wider society, and which are likely to have the effect of perpetuating their poverty."

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NOTES

¹ Lodz is second largest Polish city with more than 800 thousands inhabitants. Established in 19. century as an industrial city was called „Polish Manchester". Nowadays Lodz has been undergoing painful deindustrialization process. Its consequences are very high unemployment rate (21 percent in comparison with 9 percent as average in cities over 500 thousands), very high absolute number of unemployed (68 thousands), very large incidence of long-term unemployment (60 percent ), very low employment rate (30 percent).

² The investigation on „Shapes of poverty and social threats and their dislocation in Lodz" was funded by the Polish Research Committee (Project PBZ No 018 08) and carried out by the Department of General Sociology Lodz University, headed by Wielislawa Warzywoda – Kruszyñska. Poverty ratio has been calculated for each particular street block as proportion of members of households supported by social assistance among inhabitants of given street block. The bases for this calculation constituted : The General Register of Inhabitants of Lodz (PESEL) and The Register of Social Assistance Clients of particular Lodz districts. 17 enclaves of poverty have been revealed defined as at least two street blocks with poverty ratio higher than 30 percent bordering each other.7 percent of Lodz inhabitants and 16 percent of the poor dwell on street blocks categorised as enclaves of poverty. Having determined enclaves of poverty interviews with social services workers and narrative interviews with the poor were collected.

³ 335 interviews have been collected using questionnaire elaborated by Nikolai Genov and translated into Polish.

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