Towards a More Equal Society Post author By Philip Lane Post date September 1, 2011 Michael King writes on inequality in today’s contribution to the Irish Times series: you can read it here. Categories In Uncategorized 19 Comments on Towards a More Equal Society ← ESRI Quarterly Economic Commentary → Iceland: IMF programme completed 19 replies on “Towards a More Equal Society” It is good to see the author demolishing one of the great myths perpetrated by the Dublin 4 media about the last government. During its time in office, there were weekly tirades in the Irish Times, from such as Vincent Browne, Fintan O’Toole and many others, about the great increase in inequality and relative poverty that was supposed to have occurred, and about how those on below-average incomes were not sharing in the growth, and how it was all being creamed off by the fat cats. In fact, it was all tosh. Inequality and relative poverty rose from 1994 to 2001 (first under the FG/Lab/Stickie coaltion, then under the FF/PD coalition), but then turned down, and fell every year from 2001 until 2009 (the most recent year for which figures have been published). These are the figures for the percentage of the population living below the 60% median poverty line each year since 1994, as published in the LIIS and SILC reports: 1994 15.5% 1997 18.2% 1998 20.0% 2000 20.9% 2001 21.9% 2003 19.7% 2004 19.4% 2005 18.5% 2006 17.0% 2007 16.5% 2008 14.4% 2009 14.1% By 2009, the percentage of the population living below the 60% median poverty line had fallen below the EU average, the EU itself being relatively egalitarian by global standards. This was in marked contrast to the UK, where the caring-sharing Labour government came to power at almost exactly the same time as the rapacious-screw-the-poor FF/PD government in May/June 1997, but under whose watch the percentage of the population living below the 60% median poverty line in the UK did not fall at all and was still above 20% in 2009. Possibly one of the reasons the UK has had riots and Ireland hasn’t. It is interesting to note that, in contrast to the fall between 1997 and 2009, especially between 2001 and 2009, the percentage of the population living below the 60% median poverty line in Ireland rose sharply between 1994 and 1997, the last time the FG/Stickie coalition was in power. It will be interesting to see if the same thing happens this time and, if it does, whether the Labour vote in 2016 will go the same way as its vote in 1997. This video is a shocker. Over 300,000 people in Las Vegas who can’t feed themselves. The Boston model is banjaxed. http://video.ft.com/v/1118332453001/Poverty-overshadows-Las-Vegas-lights @ Seafoid Hmmm…maybe we are edging closer to Las Vegas than Berlin never mind Boston JTO As i said to you before, credit where credit is due. The FF Government at a time of unparalleled prosperity did seek to increase social welfare payments, access to health care, disability allowances, old age pension and education prospects of lower/lower working class people. I would also add that there is no way that a FG government would have given such large % increases. It is also important to remember that we had full employment. However FF policy during the bubble was to use cash created by the largest per capita bubble in modern history, was to buy off everyone. The real question now is, now that we are coming into a time of decreasing resources and finances will we seek to prioritise increasing equality buy Taxing Wealth and higher paid and aiming spending cuts at higher/middle paid sectors or will we take the other path that we have already started down of protecting the vested interests at all costs and cutting everything else and combining this with very regressive tax measures such as USC and decreasing tax bands. Some problems with the statement “Evidence from social science tells us that more unequal societies suffer to a greater extent from costly health and social problems, even when average income levels are constant…. .” Firstly it was epidemiologists, not social scientists, who are responsible for this claim: Wilkinson & Picket in The Spirit Level. Secondly, while opinions differ, my sense is that the response of scholars to this work has been largely negative. W&P claim that inequality has a causal effect on average health, but it is far from clear that they establish this. Its probably just a correlation , if that. Here is an equality suggestion, linked to a kind-of balanced budget multiplier effect. First equalise public and private sector rages (clue: this means a large, further, cut in public sector wages). Say, just for the sake of argument, this cuts the public sector wage bill by 15%. Second, increase public sector employment by 15%. Voila! Typo: wages, not rages. Cuts in one will lead to the other of course. @ seafoid, Why would you look at the economy of Las Vegas to determine whether the Boston model is banjaxed or not? Why not look at the economy in Boston: http://www.reuters.com/article/2010/06/03/us-usa-economy-boston-housing-idUSTRE6522MD20100603 He says much about inequality, but only glances on the metric for equality of opportunity: ‘movement of [social class] between generations’ This is a flawed metric of equality of opportunity. People _are_ different, and children should be expected to be like parents. a better metric is needed. @seafóid There is also an article on this in the FT today. I only glanced at it but did it say 13% of children in Nevada had been ejected from their homes due to foreclosures and 20% of children were affected by hunger? God bless America eh? Interestingly, the state of Nevada has an unemployment rate 2% lower than Ireland! What an odd article in that it is so backward looking. Equality? It is obvious that the burden of economic adjustment is being skewed to protect the public sector’s bubble gains and the semi-states are taking the Mickey. The private sector is going to be forced to over-adjust so others can under- adjust. Is there a determined effort to ignore this until it becomes an unfortunate historic fact worthy writing about? @ Kevin Denny “W&P claim that inequality has a causal effect on average health, but it is far from clear that they establish this. Its probably just a correlation , if that.” Surely this is easy to measure. All you have to do is take a look at life expectancy for lowest income quartile in less equal v more equal countries? @ Des Brennan “This is a flawed metric of equality of opportunity. People _are_ different, and children should be expected to be like parents. a better metric is needed.” Cant remember the author but I remember reading an article arguing that the American dream was a myth and that the % chance of moving up in social class was actually higher in some Nordic countries than the states. (It might have been joe Stiglitz article “By the 1% of the 1% for the 1%”) Good report on a similar topic. http://www.democracynow.org/2011/9/1/as_economy_lags_new_study_reveals @ Eamon Moran A bit old (2205), but is this what you’re thinking of? From the LSE “Disturbing finding from LSE study – social mobility in Britain lower than other advanced countries and declining” Quote: “International comparisons indicate that intergenerational mobility in Britain is of the same order of magnitude as in the US, but that these countries are substantially less mobile than Canada and the Nordic countries. Germany also looks to be more mobile than the UK and US, but a small sample size prevents us drawing a firm conclusion” http://www2.lse.ac.uk/newsAndMedia/news/archives/2005/LSE_SuttonTrust_report.aspx http://cep.lse.ac.uk/about/news/IntergenerationalMobility.pdf @ Eamon Of course 2205 would be in the time of Star Trek. 2005. Even if everyone lived above the poverty thresholdl (, which they should) there would still be plenty of opportunities for people to suceed. Human nature does not need a “recipe” prescribed by Doctor McDowell to encourage ambition. There will always be people who want to get ahead financially and others who want to achieve professional (but not necessarily financial) primacy. IMHO economic sucess is more assured if people have a security net as risk taking is easier when fear of potential abject povery is diminished. In fact in such a society “entrepreneurs” are more likely to try several times despite several setbacks. Despite this I wonder if “50 % meridian” would be more appropriate in rich countries such as Ireland. Yes believe it or not we are a rich, stable and democratic society which are necessary ingredients for economic socio/economic advancement. By removing the “perception” of inequality caused by Croke Park we can also emphasise and capitalise on the fact that inequality is not one of the main problems in Irish society. The decision not to “rush to the airport” by hundreds of thousands of our recent immigrants should also tell us a lot about equality wihin Irish society compared to other European countries. @simpleton IMHO very good suggestion. Actually “rages” could also have been appopriate although such a move (15% wage cut and 15%PS work force increase) would probably reduce “rages ” by 85-90 % because IMHO even a large percentage of Public Sector workers would back such a move. In fact only the far right and far left would oppose such a move which would also be interesting because of the “harmony” and “unity” it woud create between those two groups in opposing such a move. One of the callers on Joe Duffy today was a woman who was being harassed by late night visits from unlicensed money lenders’ “assistants”. She was unable to obtain any help from the Irish police as she had no real names and the thugs banging on her door were always different – so she couldn’t even provide a description. She was in debt and had turned to loan-sharks partly because her five children had been made an example of by their school “will everyone whose parents have not paid for books and school admin costs please stand up” etc. She had got notes from the school telling her everyone else had paid. It is hard not to contrast the “couldn’t give a shit” attitude of people like David Drumm and the rest of Ireland’s bonkers bankster set. That near bankrupt Ireland’s premiun-priced school staff cost so much that the genuinely poor feel shamed into getting into debt with the mob in order to pay for them to photocopy things speaks volumes about the country and what its political notions of “left wing” politics are. The state has had to go gone cap in hand to the EZ, IMF and ECB. At least they are polite. Ireland contains two parallel societies. @grumpy “will everyone whose parents have not paid for books and school admin costs please stand up” That is an absolute scandal if this has happened (apart from the fact the rest of the story is a scandal too but when it’s children who are being victimised it’s even worse). I went to school in the UK for a while as a child and because of our ‘circumstances’, was entitled to free school dinners. On my first day, a very nasty little Scotswoman told me to go and sit at the table where the other free school dinner kids were sitting. I refused (I was a very stroppy teenager) and after a lot of screaming and shouting, from both of us, found myself outside the the head’s office. It turned out he didn’t know this practice was taking place, commended me for sticking to my guns and severely reprimanded said Scotswoman. Unfortunately, she then went on to make my life a misery for the next three years but ho hum. If this sort of thing is happening in Irish schools, it should be reported and made public immediately. It makes my blood boil to read this sort of thing could be happening in our schools, at a time of severe financial distress for some, in the 21st century. An article on inequality and yet more comments on Private V Public sector ensues. The fact that many here are unable to shift their minsets from the private vs public sector paradigm is depressing and sad. Comments are closed.