The Wealth and Poverty Landscape in Luxembourg
Luxembourg is renowned for its high standard of living and wealth, often boasting the highest or one of the highest GDP per capita in the world. However, the country's economic prosperity is a double-edged sword, with considerable wealth disparities that affect various segments of the population.
Comparative Wealth
According to local reports, one in every fifteen people in Luxembourg is a millionaire, as highlighted by the local newspaper Delano. Nonetheless, these individuals do not live a life noticeably different from that of the average person. Higher salaries indeed exist, yet they are often matched by the cost of goods and living space. Residents from border regions often benefit more from the same economic advantages.
High GDP Per Capita
International rating agencies and statistical institutes consistently place Luxembourg near the top in terms of GDP per capita. This is largely due to the country's strong financial sector, including banking and investment services, as well as favorable tax policies that attract multinational corporations. While these factors contribute to its economic success, the wealth distribution paints a more nuanced picture.
High Income vs. Affordability
Many residents enjoy a high income level, with average salaries significantly above the EU average. Jobs in the finance sector, public service, and European institutions often command salaries ranging from €65,000 to over €150,000 per year. However, the high cost of living, particularly in housing, can significantly alter the quality of life for these individuals. Housing in Luxembourg is notoriously expensive, with the cost of one square meter in the capital city reaching around €13,000. Renting or inheriting a home can indeed alleviate financial burdens and contribute to a comfortable lifestyle.
Living Conditions and Poverty
While many residents enjoy affluence, the reality is that many others live in poverty or risk of poverty. The 2018 statistics from the National Institute of Statistics (Statec) reveal that over 124,000 people, out of a population of 610,000, were living in poverty or risk of poverty due to joblessness, low salaries, or precarious employment. This is especially challenging for individuals with families.
Case Study: A Single Mother
For example, a single mother with an infant or a young child earning a minimum wage of €1,600 netto can barely afford a studio apartment of 40-50 square meters, which costs between €1,000 and €1,200. Lacking the ability to live with dignity, a basic monthly income of €400 is insufficient for groceries and other bills, highlighting the stark living conditions faced by some in Luxembourg.
A Pathways to Affluence and Poverty
A significant portion of the population lives in comfort, whether through executive positions, public service, or inheritances. They are undoubtedly rich in comparison to people in many other countries worldwide or neighboring nations. Conversely, low-income individuals struggle with high housing costs, precarious employment, and insufficient wages to ensure a decent standard of living.
Government and Social Stability
While many in Luxembourg enjoy high living standards, the rapid increase in the number of individuals in poverty poses a risk to social peace and coexistence. As Statistics Belgium noted, workarounds such as living in small, uncontrolled apartments or crossing borders for lower-cost housing have become common. These practices highlight the affordability crisis and the potential for social unrest.
Ultimately, the current wealth distribution in Luxembourg underscores the importance of addressing housing costs, employment stability, and social welfare policies. By doing so, the country can maintain its reputation for prosperity while ensuring that all residents can thrive and coexist harmoniously.