Oireachtas Joint Committee on Jobs, Enterprise and Innovation
– Report on Low Pay, Decent Work, and a Living Wage
Think Tank for Action on Social Change
– The Distribution of Wealth in Ireland
OECD Economics Department Working Paper
– Taxes, income and economic mobility in Ireland
17 replies on “Recent Reports”
Second link does not seem to work.This one may do so.
In general, all very interesting papers. However, even just glancing through them one is struck by how little they coincide with observable everyday experience (which is what motivates voters).
An example from the OECD paper illustrated by this extract (para 7).
“The tax administration data consists of the entire population of 2.1 million tax units (these can be individuals or couples). It is important to note that the data is confined to those who fill in tax returns and thus does not cover those entirely reliant on untaxed benefits or undeclared income. Therefore it can be
seen as under-representing lower-income groups. Nevertheless it is a rich and detailed population data set and is complementary to household survey data, the other main source of micro data on income inequality.”
The economic mix in Ireland is clearly neither equitable nor efficient. All aspects have to be tackled simultaneously or, otherwise, the conclusions drawn are not particularly useful. Two topics that simply cannot be overlooked, as they are an essential part of the mix, are (i) households with so-called “low work intensity” and (ii) the cynical and/or resigned acceptance of emigration as a safety valve when the mix goes off the boil; as it seems to do with increasing rapidity.
This NESC report on the first topic may usefully be added.
Ireland does not just have a “very high” level relative to other EU countries, it is off the charts.
Following today’s acquisition, The Goodman group will control 28% of the beef processing and 40% of sheep processing in Ireland.
In the context of both the living wage and wealth distribution, it is worth asking the questions as to, what are the rates of pay in the beef processing industry; and how many, if any, of the companies in that industry contribute to an employee pension scheme for all employees.
But I have my doubts if those the kind of questions that might interest the very well pensioned mandarins in the Department of Agriculture, of in the competition authority.
Low pay, decent work :
the Zeitgeist is neo Victorian
The economic “mix” in Ireland is certainly not efficient, but in a quintessentially perverse Irish manner it achieves a degree of equitability. Governments of all stripes pander to a broad range of special interest groups across the political and economic spectrum and this pandering generates considerable inequalities in what are laughingly described as “market outcomes”.
(The pecking order of these special interest groups may vary depending on the composition of the government in office, but there will always be a common core of influential special interest groups high up the pecking order irrespective of the composition of the government. The composition and membership of these special interest groups may change quite significantly over time, but the primary purpose of these groups – to ensure the sustained capture of economic rents – remains intact and ensures cohesion. And there will always be jockeying and jostling for position among these groups, but any evidence of conflict that might emerge in public is carefully managed and is purely “for the optics”.)
The tax and welfare system is then deployed at enormous cost, effort and inefficiency to mitigate the enormous inequalities of these “market outcomes”. The pandering to the various special interest groups normally takes place between elections – primarily to ensure that any gripes they might have do not feature during an election campaign. The election campaigns then focus on tweaking the tax and welfare system to compensate as many voters as possible for the impacts of these “market outcomes” that favour the special interest groups but that damage the interest of the majority of citizens. This is the perverse and quintessentially Irish measure of equitability the dysfunctional system of democratic governance generates. And a thriving black and grey economy can generate a futher layer of redistribution.
And, despite irresponsible abuse of the tax, public expenditure and welfare systems and reckless governance by FF between 1977 and 1981 and by FF (in cahoots with various minor sidekicks) between 2002 and 2008 (combined with the failure of FG-Labour 1982-87 combo to address properly FF’s previous misgoverance), a majority of Irish voters seemed content to rotate power between combinations of these “mainstream” parties. However, in the run-up to the next general election the indications are that at least 40% of the electorate will give their first preferences to factions and individuals ranging from potentially dangerous populists, through small deluded groups ranging from the hard left to the pious right to well-intentioned but totally ineffectual independents.
This is a highly significant rejection of the traditional mainstream parties – and a rejection for greater than that being evidenced in most EU member-states. However, the totally disparate and incoherent nature of the representation of this rejection of mainstream parties will allow some measure of “business-as-usual” to prevail for the powerful special interest groups. These groups gorging themselves at the expense of the vast majority of citizens are too well entrenched and the extent of redistribution via the tax, public spending and welfare system is generally sufficiently well-targeted to avoid excessive public discontent. This, for Ireland, is probably as good as it gets, but the formation of the next government and how long it lasts will be interesting.
What is also interesting is that a reasonably coherent centrist faction has not emerged such as Ciudadanos in Spain which looks like it is on track to hold the balance of power in the up-coming Spanish parliamentary election.
As Upton Sinclair might have said – “So what’s new pussycat?” Union activism was eventually successful due to increasing education and slow improvements in general economic prosperity.
Now, we face into prolongued periods (of indeterminate duration) of slowly deteriorating economic situations. There will always be enough folk who are so desperate that they will work in the most appalling situations and hazardous conditions. There will be no difficulty in replacing injured, dead or exhausted employees. Economists would consider them – “externalities”.
Those sort of working conditions are bad for those who benefit from the system because they lead workers to vote for the likes of Farage and Le Pen.
@ Paul Hunt
Eloquently put! Where we differ is in relation to whether the glass is half full or half empty. In my view, it is well over half full for reasons which have nothing to do with individual choices but because of a – largely inherited – societal commitment to some basic democratic values, including an independent and honest public service.
The next bend in the road will be when, and if, we get to the point of examining that part of the iceberg that is not visible i.e. the accumulated patterns of public expenditure, which are somehow viewed as immutable but reflect the rent-seeking distortions to which you refer.
I referred in another post to the “quill pen era” still prevailing in this regard. Such are the technical advances on the income side made by the Revenue Commissioners, the contrast is becoming absurd. The 40% of the electorate to which you refer could hardly avoid noticing.
” … the likes of Farage and Le Pen.”
Who are nicely embedded in ‘The System’ – like barnacles attached to the hull of the ship! Whither the ship goes, they go …. “Praise the Lord!”
“The Parallax View” – [Warren Beatty 1974] ???
Two links of interest.
The comment by Stephen Collins is a classic example in terms of reflecting the inability of all sectors, media included, to examine the section of expenditure iceberg under the water (i.e. repeat committed expenditure, up to 95% of the total). Such an examination, for example, might lead to some interesting conclusions on the following anomaly (as commented on by John Sheehan on another thread).
“The claim that VAT is a highly regressive tax rests on the fact that for the people in the lowest 10 per cent of the income distribution (the bottom income decile), VAT expressed as a percentage of income is extremely high. The main reason for this is that in the bottom decile in Ireland, expenditure is almost double recorded income (186%). At the bottom of the reported income distribution, there is evidence that expenditure captures living standards better due mainly to underreporting of income.”
This might seem a bit of a mystery to urban dwellers but is far from such for anyone living in rural Ireland.
One further link.
I often refer to the Swedish experience and for three main reasons (i) they experienced runaway public expenditure and a banking bust in the 1990s (ii) the exemplary manner in which they dealt with the congruent crises is the example that we should obviously follow and (iii) information on how they did it is widely available in English.
Of course, we might also drain the Shannon.
The Swedes didn’t have their banking collapse at the start of a global depression.
The Swedes had a currency, and a Central Bank.
I do not see what either has to to do with adopting the necessary reforms with regard to budgetary control and financial management after a budgetary and banking bust. Others can read the linked material and make up their own minds.
Of course you dont, DOCM. You dont understand the role of a Central Bank as Lender of Last Resort or of ensuring that deposits are guaranteed. We dont have a Central Bank in the EZ.
” The Swedish government, in cooperation with the opposition, announced in a press release on 24 September 1992 – a critical month when currency pegs in several European countries were successfully attacked – that depositors and other counterparties of Swedish commercial banks were to be fully protected from any future losses on their claims. The guarantee was successful in the sense that foreign confidence in the solvency of the Swedish commercial banks remained intact. ”
“In December 1992, the Riksdag, passed legislation by an overwhelming majority to establish a Bank Support Authority, Bankstödsnämnd, as envisaged in the press release of 24 September 1992. The parliament approved open-ended funding for the Bankstödsnämnd, rather than settling for a predetermined fixed budget. This was a deliberate choice in order to avoid the risk that the Bankstödsnämnd would be forced to go back to the Riksdag to ask for additional funding at a later stage. The open-ended funding underpinned the credibility of the bank resolution policy.”
Sweden was serious. The EZ is not.
So do continue to use the Swedish example but try to read up on why it worked.
That was very kind of you! But you are still missing the point. The EZ has demonstrated that it is serious, very serious, especially where it comes to establishing where responsibilities lay, and continue to lie, under the collective euro agreements, which no government was compelled to sign up to, either at the beginning, the middle or, hopefully, the end of this saga. Indeed, these agreement, unlike in all other EZ countries, have been endorsed by the people.
Moaning about what should be in these agreements may be satisfying for some but what purpose it serves escapes me.
The Irish government has demonstrated – unlike the Swedish government – that it is not serious, seriously not serious, in terms of making the necessary budgetary reforms which is all that I have drawn attention to and which is all that I am talking about.
Very serious yada yada. No LOLR. No coherent deposit insurance. No bank recap. No hope.
We are looking at a fairly serious follow up crash the way things are going, DOCM, and the financial markets will expect to be bailed out again. And there is no spare debt to mop up the carnage. And no LOLR to calm markets. No credible deposit insurance to reassure punters. The first EZ bank run will be something else.