The Czech Republic is grappling with a concerning rise in poverty, with more than a million people living below the poverty line, and an additional two million hovering just above it. This challenging situation is not limited to the traditionally vulnerable; even the middle class is feeling the pinch. A combination of factors, including surging prices and unaffordable housing, is contributing to this alarming trend.

Recent data reveals that thirteen percent of households in the Czech Republic are wrestling with income poverty, a distressing issue that impacts one-fifth of those in this situation, particularly individuals with lower educational attainment and families with children.

Jiří Vraspír, an analyst for social affairs at Charity ČR and one of the authors of the report, states, “The situation has worsened over the past year, especially for families with low incomes.” The primary driver behind this is the sharp increase in prices over the last two to three years. Between January 2020 and March of this year, prices rose by an average of thirty-three percent, with certain goods and services experiencing even steeper price hikes, exceeding forty percent. This surge is most notable in food, clothing, and energy costs.

Household savings have been significantly impacted, with the average monthly savings plummeting from 8,000 koruna in the fall of 2021 to just 5,300 koruna presently. Concurrently, the average monthly expenditure on groceries has surged by 3,600 koruna in comparison to two years ago, reaching around 11,000 koruna.

What’s alarming is that this growing financial strain is not limited to those with lower incomes; even the middle class is grappling with housing costs, with increasing numbers seeking financial assistance. Rising debt is a recurring issue, often stemming from unforeseen expenses like utility bills or essential appliance purchases.

Moreover, affordable housing is in short supply, with rents becoming prohibitively expensive for many. People who are at risk of homelessness or burdened with excessive housing costs have reached 1.27 million. Of these individuals, nearly 29 percent are seniors, and more than a fifth are children. Approximately 154,000 people face housing emergencies, either lacking housing, facing immediate eviction, or relying on friends and relatives. Alarmingly, 61,000 of these individuals are children.

The combination of unaffordable housing and low incomes has created a dire situation for many. Single mothers and families with children are particularly vulnerable. As Iva Kuchyňková, the social activities coordinator at Charity, points out, “Azylové domy, or shelters, are currently facing the problem of not having anywhere else to move the people they are assisting. There is a shortage of available housing.” This predicament leads to individuals constantly moving from one temporary place to another, preventing them from establishing a stable home.

In many cases, low-income individuals are unaware of their eligibility for social benefits or lack the knowledge and resources to apply for them, further exacerbating their financial struggles. Addressing this multifaceted problem will require comprehensive efforts from both public and private sectors to provide affordable housing, support education and job opportunities, and ensure social safety nets for those in need.

Article by Prague Forum