CSL Analysis Shows Increased Risk of Poverty, Growing Income Disparity Across Luxembourg

On Thursday 10 October 2025, the Luxembourg Chamber of Employees (CSL) presented its annual analysis of Luxembourg’s social and economic situation through its traditional “Social Panorama” report.

The CSL analysis highlighted that behind a generally high level of prosperity, social divisions are widening, income inequalities are increasing and poverty now affects not only households without employment but also many employees. The CSL also noted that the current economic slowdown is accompanied by a rise in unemployment, particularly among young people, older workers and people with disabilities. Moreover, working conditions are deteriorating and the increase in atypical employment and involuntary part-time work, as well as the persistence of in-work poverty, revealed a growing precariousness of labour.

Nora Back, President of the CSL said: “It is commonly acknowledged that the Grand Duchy ranks among the most economically developed countries in the world. However, this prosperity is not sufficient to mask certain persistent social gaps. National wealth remains unevenly distributed, and nearly one in five residents is at risk of poverty - a reality that directly reflects the vulnerability of thousands of people to life’s uncertainties. Despite consistent economic dynamism over recent decades and a generally high standard of living, Luxembourg struggles to significantly reduce social inequalities and precarious living conditions.”

Income disparity widens

According to the CSL analysis, in 2024 the income earned by the richest 20% of the population was 4.68 times higher than that of the poorest 20%. Compared with euro area countries, Luxembourg is just below the average but remains more unequal than its neighbouring countries, particularly in comparison with Belgium.

Increasing poverty risk

Almost one in five residents and one in seven workers is at risk of poverty in Luxembourg, with 13.7% of employees below the monthly at-risk-of-poverty threshold, making Luxembourg the worst in this regard in the eurozone, particularly when compared to neighbours Belgium (4.3% ), Germany (6.5%) and France (8.3%). Just under a third of single-parent families are at risk of poverty (31.8%), rising to 34.7% for households consisting of three adults and 38.5% for large families.

Youth unemployment issues

In 2024, the CSL recorded analysis a rise in the number of jobseekers in Luxembourg, despite overall improvements across the European Union. This trend in Luxembourg is evident amongst the age group of 15 to 24-year-olds where the unemployment figure of 21.6% is notably higher than the eurozone average of 14.6%. This is also reflected in the employment rate for the same age bracket where Luxembourg registered only 29.3% compared to 36.5% for the eurozone as a whole.

Proportional housing costs increase

In most European countries, the proportion of households spending more than 40% of their disposable income on housing is gradually declining. In Luxembourg, however, the trend is the opposite. When looking at the share of rent in the disposable income of tenant households, Luxembourg ranks second among euro area countries where rent takes the largest slice out of household budgets. On average, tenants allocate 27% of their disposable income to rent payments.

Health perception linked to employment status

People in employment in Luxembourg generally reported a more positive perception of their health status than other categories of the population. According to 2024 data, only 4.5% of employed people consider themselves to be in poor health. This rate is notably lower than that observed among the unemployed (9%), the economically inactive (9%) and retirees (9%).

In conclusion, the CSL stressed: “These findings highlight the urgent need to rethink the mechanisms of solidarity and redistribution in order to guarantee decent work, strengthen social cohesion, and ensure sustainable and fair development for all.”

According to the CSL, the published analysis aims to gather statistical data, which is often scattered and underutilised, providing not only an overview of the current situation and the socio-economic evolution of the country but also placing the information in perspective by comparing it with the performance of its European partners.

The full CSL analysis can be found at: https://www.csl.lu/en/panorama-social-2025-analyse-et-vue-densemble-de-la-situation-socio-economique-du-pays/