Archive for the 'Poverty in Ireland' Category

European Commission Country Report gives food for thought

The European Commission report:

  • Highlights growth in Poverty: 30% of children at risk of poverty
  • Points to gaps in services infrastructure
  • Criticises decisions to cut taxes and forgo new income (Irish tax take is 29.7%, as against EU average of 39.1%)

By Paul Ginnell, Policy Officer, EAPN Ireland

 country report

As polls closed on election day on February 29th, the European Commission published its annual Country Report for Ireland.  They had not wanted to publish it before 10:00pm in case it was seen to be influencing voters. As it turns out there is quite a lot in the report that would be of interest for those voting on the day and I would encourage you to have a look.

The report includes a detailed analysis on a broad range of areas with the emphasis on macroeconomic concerns but also addressing a range of areas relevant in addressing poverty and social exclusion including housing, health and one section covering the labour market, education, social policies and inclusive growth which covers childcare.

 

Gaps in public service infrastructure

One of the most important messages from the Report is that Ireland has large gaps in its public services infrastructure, which also suffered major cuts during the crisis. This has resulted in increasing issues for the quality and adequacy of the services which now need immediate investment. The specific areas which are highlighted are in transport, housing and water infrastructure while education and health are also highlighted but as less severely affected by cuts.

 

Low overall tax take

The next section of the report is on taxation, which is the key source of the resources necessary to invest in in this infrastructure. The report highlights that Ireland’s overall tax take is low by EU standards with the Irish Government collecting taxation equivalent to 29.7% of GDP in 2015, whereas the EU average is 39.1%. The Report looks at various areas of taxation, which makes interesting reading. It is critical of the Government’s recent decisions to cut taxes or forego the opportunity to bring in revenue in some areas as both regressive and as not geared towards broadening the tax base.

While the issue of broadening the tax base is important in addressing the gap in public services the Commission should really not be surprised that investment in Ireland’s public service infrastructure, already underdeveloped before the crisis, has suffered so much during the crisis. These cuts were a direct response to the austerity policies promoted by the Commission itself as part of the troika and implemented by the last two Governments in Ireland.  Investment in social infrastructure is also restricted by the expenditure rules Ireland is tied to under the EU’s Stability and Growth Pact.

 

Education needs investment

In the section of the report dealing with education the Commission specifically highlights that the decrease in expenditure in the area of education has had a negative impact. It specifically points out that the increase in the student-teacher ratio in many schools, a reduction in the allocation of language support and the withdrawal of both the Visiting Teacher Service and Resource Teachers for Travellers could in turn have a negative impact on the quality of educational outcomes in the future. These specific cuts were used by EAPN Ireland to highlight to the troika and the Government at the time, that short term measures to make savings and reduce budget deficits would result in longer term social and economic costs. These impacts are now apparent.

 

Increase in Poverty

The report highlights that relative poverty and income inequality have increased with three in ten children now at risk of poverty and social exclusion. These too are as a result of policy decisions in a range of areas. In addressing the issue of poverty and inequality the Country Report focuses mainly on the Government’s measures to address the low work intensity of households. While supporting people to access quality work with a living wage is very important the Commission, and the Government, need to take much wider analysis of the causes and solutions to addressing poverty and inequality. Access to quality social services, addressed in other parts of the report, also have a key part to play. While the report does highlight that social transfers have been effective in greatly reducing poverty levels it does not address the need for an adequate income for those depending on social welfare supprts. Current social welfare payments for those of working age are €20 below the poverty line and are far off the levels needed to provide people with a minimum standard of living as calculated by the Vincentian Partnership for Social Justice.

 

In picking up on issues missed in the past by the Commission the Report does highlight the need to invest in quality, as well as affordable childcare. In the area of health it goes past solely focusing on cost effectiveness to highlighting the inequality that exists in the Irish two tier health system, but does not go as far as addressing the poorer health outcomes for those from those with lower incomes and from more disadvantaged groups in society.

briefing

Where this comes from

These Country Reports are published as part of the EUs European Semester process and the Report for Ireland is meant to inform the Irish National Reform Programme, which they will send to the Commission in April, and the Country Specific Recommendations Ireland will receive from the EU in May.  As the name suggests the Recommendations give very specific guidance to the Government on policy changes they want to see put in place.

Hopefully when the Commission does issue its Recommendations in May it will include one asking the Government to develop a new all of Government anti-poverty strategy which addressing the different dimensions of poverty, including ensuring the people have an adequate income, whether they are in or out of work.

The European Commission’s Country Report is available at: http://ec.europa.eu/europe2020/pdf/csr2016/cr2016_ireland_en.pdf

 

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Getting ready for the election – and a free gift

door hanger

EAPN Ireland Election Blog # 1

As the parties gear up for General Election 2016, it is important to remember that this is not just a form of amusement for political enthusiasts.

 

The big question, as the country emerges from recession, is whether the parties forming the next Government, and opposition TDs holding them to account, will prioritise the resources and policies to seriously reduce poverty and inequality.

 

This Blog will be used to track the debate and proposals through the election.

  1. We will publish a series of short articles from  party spokespeople and TDs on how they plan to fight poverty
  2. We will publish articles on what needs to be done on key policy areas
  3. We will track debates, interventions etc. as the election campaign goes on.

 

Our latest publication, the European Anti-Poverty Network Ireland Briefing on poverty, 2015 and proposals for 2016-2021, describes in some detail the extent of poverty in Ireland and the challenges faced by the next Government.

 

Section 5 of that publication, Towards a new anti-poverty strategy, urges

“…all parties and candidates for the next Dáil to commit to a new five year strategy against poverty and social exclusion covering the term of the next Dáil, to replace the current National Action Plan for Social Inclusion (2007-2016).”

 

It explains the elements of:

  • A comprehensive strategy
  • A strategy for a decent income
  • A strategy for quality jobs
  • A strategy for quality services:
  • A strategy to end homelessness and ensure housing for all
  • A strategy based on human rights, dignity and equality
  • A strategy which we can afford “… a five-year plan to bring overall Irish taxation levels from their current 30% of GDP to the EU average, which is currently 40% of GDP.

 

We would encourage you to use read this paper before talking to canvassers and to actively raise the issue of a strong five-year programme to fight poverty with candidates and parties.

 

And for those of you who have read this far, here is you free gift – Your free election survival kit.  Use and enjoy!

The most radical social welfare in decades – We can’t afford to get it wrong!

Social Welfare reform and a single welfare payment for all people of working age must address poverty traps, access to supports and services and the availability of jobs

The Minister for Social Protection, Joan Burton, has signalled the most radical change in the social welfare system for decades.  She proposes to replace seven of the most important payments with a single payment rate and common conditions for eligibility.  This process has already begun with the changes to eligibility for the One Parent Family Payment and payments for those on Community Employment schemes. The Department has also signalled that detailed proposals will be put to the Troika in March.

EAPN Ireland supports the general principle of a single payment on condition that the correct services and supports are put in place.  Equally, we are not opposed to activation measures if these supports and services are in place and if appropriate work is available.  However, as the Department itself has acknowledged, to make such changes in current conditions risk pushing some of the most vulnerable people in the country further into poverty and creating even greater poverty traps preventing people taking up work.

Background to these proposals

In November 2010 the Department of Social Protection published a Report on the desirability and feasibility of introducing a single social assistance payment for people of working age The overall proposal is that everyone age 18-64 years on this social welfare payment would be directed to the support or services they need in order to return to work or other education or training opportunities. The report proposes that all payments be aligned to the Jobseekers Allowance payment and apply to all new applicants for social welfare supports whether they be a person with a disability, a lone parent, qualify for farm assist, etc. The report proposes that carers not be included in the single payment but recently there are suggestions that they will be excluded.  

The 2010 report clearly states that the changes should only be brought in if they reduce poverty and social exclusion for people and make work pay. It also recognises that the development of supports and services is necessary to this.  It outlines clearly the major loss of income for most groups provided separately under the current system.

Since the report was published there have been consultations with different organisations including those representing people affected by the changes. It is clear from these consultations that while no organisation is opposed to the introduction of a single working age payment there are major concerns particularly in relation to the capacity of the state to provide the necessary supports and services and in relation to the current lack of jobs and opportunities for people to take up.

Therefore, organisations, including EAPN Ireland, have asked that no changes are made that would reduce the current level of current income supports until such a time that the services and supports outlined in detail in the report are put in place.

EAPN Ireland proposals to Oireachtas Committee

The Oireachtas Joint Committee on Jobs, Social Protection and Education is now preparing a report on the single working age payment.

The Europe 2020 working group of EAPN Ireland (membership below) has made a submission to the Joint Oireachtas Committee.  The submission makes it clear that we support the idea of a single social assistance payment for all people of working age, provided that the necessary services, supports and pathways to employment are put in place.   

The Department’s 2010 report which laid the basis of the current proposals for a single payment acknowledges that, without policy changes in other areas, most people moved onto Jobseekers Allowance will suffer a loss of income.  The Minister needs to spell out how these supports and services will be put in place before changing the payments or eligibility criteria. 

We are concerned that changes have already been made in Budget 2012 and that an implementation plan will be presented to the Troika in early April without any clarity on how the concerns expressed in the Department’s own report and in consultations will be addressed.

The current system allows for appropriate policies to be developed over time to meet the needs of particular groups. It would be a negative step from a policy point of view if the appropriate responses to group needs are lost in the implementation of a new single payment based on a simple template of Jobseekers Allowance.  

The services and supports in place to address the needs of those currently on the Live-Register are already under pressure and the National Employment and Entitlement Service which is being established will also not have the resources to address this. Adding even greater numbers to this system, including people facing a complex range of barriers, will only overburden an already struggling system, which is in the process of reform.

It is clear from our members’ experience and from studies that the vast majority of those who would be impacted on by the introduction of a single payment want to work but are prevented from doing so due to the barriers outlined in the Department’s report.

We are concerned that if the reforms are not correctly implemented they will increase the negative attitude towards groups such as lone-parents and people with disabilities who are often attacked, despite the evidence, as being unwilling to work.

There are currently very limited jobs available. The reforms to the welfare system must therefore go hand in hand with a strategy to create decent jobs. 

 

Poverty Traps

It is vital that any changes to the system remove, and do not deepen, poverty traps.

We have a number of very specific issues and concerns.

  • The Department of Social Protection’s 2010 report clearly acknowledges the loss of income for different groups if the single payment is introduced without other changes.  The current differential supports were put in place precisely to cover costs of services and supports such as childcare. The loss of income under the proposed changes would in particular apply to carers, to those in Community Employment and those going to work who qualify for income disregards. If the services and supports are not provided it will result in poverty traps for these families forcing them to meet these costs from more limited resources or to leave or not to take up a job or a place on a Community Employment Scheme.
  • Income disregards play an essential role in addressing the cost of services related to going to work for those receiving these payments. This includes the cost of childcare and afterschool care for lone parents and the costs incurred by having a disability such as transport.  As highlighted above, the loss of income disregards will immediately impact on the capacity of people to be able to take up employment. In this situation the changes might appear at first hand to be a saving for the Department but the actual impact would be to act as a barrier to people moving off social welfare supports and is therefore an actual increase in costs to the state.
  • While a reform of the means testing system for secondary benefits would be welcome, the introduction of a single payment based on Jobseekers Allowance would result in the loss of secondary payments for people under some of the existing payments. This would include the Household Benefit Package and free travel for people on Disability Allowance, Carer’s Allowance and the Blind Pension. The loss of these supports would be detrimental for the people affected in light of the extra costs of disability.
  • The role of Family Income Supplement (FIS) needs to be explored as it could help to overcome some of our concerns.  However, member organisations are aware of major waiting times to get this payment so if it does become part of the single working age payment support system, it will need to be easier to access.

With the exception of those undertaking caring responsibilities, the majority of those on social welfare payments want to work. They would welcome a system of accessible services which addresses their needs and supports them to access a decent job, so allowing them and their families a decent income. The implementation of a single working age payment in a considered way, with all the elements being developed together, allied with a job creation strategy, has the potential to make a key contribution to this. However, in the current climate, with cuts to essential services and little if any work opportunities, now is not the time. Cutting social welfare supports and imposing even greater conditions on people to engage with the system when there are so few opportunities will only have negative consequences for people and undermine the Department’s own goal of ensuring that all people of working age have sufficient income and opportunity to participate as fully as possible in economic and social life.

The Government must re-engage in real consultation and not continue to press forward with changes at a time when such changes will only result in greater poverty for the groups involved making it even more difficult for them to take up work and training opportunities.

Membership of the EAPN Ireland Europe 2020 Working Group includes Age Action Ireland, Congress Centres Network, Disability Federation of Ireland, Dublin Employment Pact, EAPN Ireland, Irish National Organisation of the Unemployed, Irish Traveller Movement, Migrant Rights Centre Ireland, National Adult Literacy Agency, National Youth Council of Ireland, National Women’s Council of Ireland, One Family, OPEN and SIPTU.

Fresh Perspectives: New TDs on the development of a more social Europe – Mick Wallace TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Mick Wallace is an Independent TD for Wexford. He was elected for the first time to the Dáil in 2011 and is a member of the Technical Group.

With a population of 4.6 million and a GDP of €150 billion, Ireland is a relatively small player in Europe (the EuroZone countries alone have a combined population of 330 million and a GDP of €9,200bn), so it can be difficult for us to make our voice heard – however, it is important that we play our part and as a member of the Oireachtas Joint Committee of European Union Affairs. I hope to make a constructive contribution by scrutinising legislation and proposals emanating from the EU as well as making sure the government is held to account in its dealings with Europe.

Today, one in five people in the European Union is at risk of poverty or social exclusion and 40 million people are living in a condition of severe deprivation. Although the media discourse about Europe is primarily concerned with banks and bondholders, the devastating social consequences (felt across Europe) of bowing to the interests of financial institutions and private speculators is what makes the financial crisis a reality for ordinary European citizens. Cuts to social welfare, education, and health in conjunction with tax increases and rising unemployment are the hallmarks of a European response to the crisis that is not only failing but making things worse. Here at home almost 100,000 children live in consistent poverty and nearly 230,000 live in relative poverty. Despite these shocking figures, the Fine Gael/Labour coalition is committed to implementing the policies of its predecessor which specifically target those who are already vulnerable. In education the cuts coming into effect in September 2011 will have a devastating impact on children with special needs and learning difficulties, Traveller pupils and the children of non-nationals as well as having a knock-on effect across the education system.

In working towards a more social Europe it is important that our focus is on protecting the interests of ordinary European citizens as opposed to those of banks or private companies. In this regard, a key area of concern is the proposed reforms to the Common Fisheries Policy. In Ireland alone the Seafood Industry contributes about €700 million annually to national income and employs somewhere in the region of 11,000 people – it is also a valuable industry for many of our European neighbours providing jobs not only on fishing vessels but in processing operations, in distributing and marketing seafood as well as other areas. In its proposals the European Commission has called for the introduction of a system of transferable fish quotas – this is worrying as it may lead to a situation where multinational companies acquire an unfair proportion of quotas resulting in an effective privatisation of the quota system with the knock-on effect of job losses in fishery-dependent communities. Coastal communities across Europe must not be sacrificed for the profits of multinational companies.

I welcome the acknowledgement a few weeks ago by IMF deputy director Ajai Chopra that the problems that Ireland faces are not just an Irish problem but a shared European problem. And whilst Minister Noonan jokes about ordering t-shirts with the words “Ireland is not Greece” printed on them, many of us outside government circles realise the importance of promoting solidarity between Irish citizens and our European counterparts. This is not about pitting Irish people against Greek or Portuguese citizens, just as domestic debate should not be stifled by creating an artificial divide between public sector and private sector workers. This kind of discourse is initiated and nurtured by governments in conjunction with a complicit media with the aim of dividing citizens and conquering dissent against austerity measures and socially unjust policies.

We were informed in the past that the European Union was supposed to be a family of nations and that we would all look after each other. The EU was founded on the principle of solidarity between the nation states of Europe, and their citizens. These ideals have fallen to the wayside as austerity gains a deeper foothold. It is our task as European citizens to restore our shared values of equality, solidarity and fairness to the centre of the European project and ensure that these principles are not consigned to the pages of history as elements of a bygone era.

Mick Wallace TD

Fresh Perspectives: New TDs on the development of a more social Europe – Simon Harris TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Simon Harris is a Fine Gael TD for Wicklow and was elected to the Dail for the first time in 2011

My generation of young Irish people have seen many benefits from our country’s membership of the European Union. The freedom to travel anywhere across our continent, to experience new cultures, to see investment in many infrastructure projects in towns up and down the length and breadth of the country and even tackling mobile phone roaming charges – these are just a few of the tangible, simple benefits we have seen from Europe. However, it is clear that as a people we all too often feel removed from the European project. Issues concerning us are discussed many, many miles from here yet how engaged with this process are we as a people? As a new TD, I have come to the Dáil full of energy, enthusiasm and a desire to play my part in reforming and rebuilding our country. It is clear that an important part of this reforming exercise will be examining how we interact with our European neighbours.

This year in the Dáil we held the first ever special sitting to mark Europe Day. We heard from our MEPs, from the European Commissioner, from the Taoiseach and from other party leaders about Europe, Ireland and our relationship. This was a worthwhile first step but needs to progressed and developed further.

When one reads a newspaper these days, our relationship with Europe seems dominated by talk of banks, bailouts and bonds and whilst there is no doubt these are vital and topical issues, our relationship with Europe must go beyond that. I want to see more discussion, debate and exchange of ideas about social issues. I want us to learn from each other on how we can best tackle social challenges. We need to be exchanging ideas on best practice in education, in health, in disability and on the environment.

Recently in the Dáil I highlighted the fact that at a European level it had been agreed to have a pan-European helpline for missing children yet years later we have yet to put this in place in Ireland. This is just an example of where we need to seek much greater follow through on what is agreed at a European level being delivered on in our own country.

There is an onus on those of us in the Oireachtas to keep abreast of what is happening in the EU, the European Parliament and the European Commission. We need to constantly look at new ways to make this scrutiny of European issues more seamless. But there is also an onus of all of us – on every Irish citizen – to get involved. If the European project is to be a success in what it strives to achieve, it needs not just bureaucrats, institutions or directives but rather it needs citizens of Europe onboard and in tune.

The commitments in the Programme for Government are welcome and I think we’ve gotten off to a good start on this but a huge body of work remains to be done and I look forward to playing my part.

Europe was never meant to be just about banks – it is about so much more than that. We must all strive to redress this imbalance!
Simon Harris TD

 

Fresh Perspectives: New TDs on the development of a more social Europe – Pádraig Mac Lochlainn TD

This is one of a series blogs by new TDs to encourage an active debate between political representatives, EAPN Ireland members, and the broader public on the future of the European Social Agenda, and the role of the new Dáil in debate on Europe.

Pádraig Mac Lochlainn is a Sinn Féin TD for Donegal North East. He was elected to the Dáil for the first time in 2011 and is the Sinn Féin spokesperson on European Affairs, Foreign Affairs and Trade

Current EU economic strategies are driving more and more people within the European Union into poverty. It is estimated that eight per cent of working European citizens are now at risk.  The privatisation of public services, the free market and de-regulation have all contributed to bringing Europeto the edge.
 
The European project is being undermined by right-wing policies which are impoverishing more and more people.  Wages are being driven down. Job security is being undermined and welfare and social benefits are being attacked.

The debt problem is pan-European and requires a European response. The impact of deep austerity combined with the lack of a major investment plan will clearly negatively impact on growth across Europe. 
 
Sinn Féin advocates a policy of critical but constructive engagement with Europe. However, because the EU has become a dominant force in the political, economic and social life of this State, we must support or oppose each of the EU’s complex developments on its own merit.   
 
We have consistently supported EU measures that promote and enhance human rights, equality and the all-Ireland agenda. These measures are an example of the EU at its best. But we have also never been afraid to stand up against EU measures that damage Irish interests.
 
Now, more than ever, is the time to stand up for these ideals.
 
We want to build a Europe of Equals – a true partnership of equal sovereign states that co-operate in the social and economic development of Europe and beyond. We want an EU that promotes peace, demilitarisation and nuclear disarmament.  We want a Europe that seeks a just resolution of conflicts under the leadership of a reformed, renewed and democratised United Nations. Ultimately, we want a United Ireland that will take its rightful place and play an active role in such a reformed EU.
 
Consistent with our republican agenda at home, Sinn Féin’s Agenda for Change at EU level involves actively campaigning for:
 
– an independent Ireland of Equals in an EU of Equals
 
– an EU that respects and promotes national, collective and individual rights (including human, political, social, cultural and economic rights)
 
– an economically and socially just EU, not an EU that is merely another economic superpower
 
– a demilitarised and nuclear-free EU
 
– a globally responsible, fair-trading EU that leads the way on reaching the Millennium Development Goals for halving global poverty by 2015.
 
Unfortunately, in the name of fiscal restraint, the EU has adopted economic policies that now threaten the European social model, the democratic power of national parliaments, and the bond of mutual respect that must endure among member states. They are imposing severe austerity on weaker member states such as Ireland, Portugal and Greece which will push even more families into poverty and block any chance of economic recovery.
 
Worse than this our European partners will profit as much as €10 billion as a result of a 3% surcharge on their loans toIreland under the terms of the  EU/IMF austerity programme. Not only does this surcharge contribute to what is an already unsustainable debt level, but will starve the Irish government of much needed resources for job creation, public service provision and anti-poverty programmes.

These are not the actions of partners acting in solidarity with one another.
 
The EU mandarins appear to have learned little from the defeat of the proposed EU constitution in referenda across Europe only a few years back. And they ignore the wishes of their people at great risk. People across Europe are becoming increasingly disillusioned with the nature of a project that is being carried out against their wishes.  They, like Sinn Fein, want to see a Europe of Equals that is grounded in mutual respect.

We have always been told that the foundation of the European project is solidarity. The lesson from the recent austerity programmes in Greece, Ireland and Portugal is that solidarity amongst the EU “partners” is now in short supply. Unless real solidarity and partnership soon replaces harsh and punishing austerity, the damage to the European project may be irreparable.

Pádraig Mac Lochlainn, TD

Creating Greater Income Equality


Unequal societies are detrimental to our economy, to society in general and to our individual health and psychological welfare.[1] The wider the gap that exists between high and low earners the greater the prevalence of these negative effects. As Irish levels of income inequality are increasing[2] it is important that we take a comprehensive look at this issue as part of the current debate on what type of society we want in the future. It is essential that, as a first step in the process, a minimum essential standard of living is researched, implemented and monitored in order to ensure that we have a just and sustainable foundation from which to implement greater income equality.

As things exist the income floor is set by the social welfare system. This is a subsistence level of income that does not permit a life of dignity. Rather than lower the minimum wage or subsistence level provided by the Social Welfare we should focus first on establishing what exactly it is that the basic minimum income needs to be in order to ensure dignity and the opportunity to live a socially inclusive life. Sweeping the rug from under those on low incomes is not acceptable; instead we should secure their footing on the income ladder and use that as a sound foundation from which to bring improved wages. This would be more in line with what is just, equitable and socially sustainable. It is also an economically sound approach, as those on lower incomes redistribute the majority of their income back into the economy.

A minimum essential Standard of Living

Especially in these times of economic crisis social welfare transfers need to be protected therefore cuts in Government spending should not be targeted at those on the lowest incomes. In addition, in reconstructing our economy new mechanisms for redistributing wealth in a more egalitarian way can be found. The Vincentian Partnership describes a Minimum Essential Standard of Living as one which meets a person’s physical, psychological and social needs. They have devised minimum essential budgets for six household types, ranging from a lone parent with two children to a pensioner couple. These budgets are based on components such as health related costs, household services, personal care and a range of items necessary for social inclusion and participation, with approximately 2,000 items, goods and services being evaluated. Based on data collected in 2009 the minimum essential budgets per week for these household types stack up as follows: €280.81 for a female pensioner living alone, €588.26 for a lone parent with two young children, and €264.22 for a single adult male. Social welfare payments for these same family types are €269.02, €575.31 and €196 respectively. This highlights the importance of maintaining the social welfare at the current rates and increasing them if possible in order to ensure there are no shortfalls, such as that experienced by young male adults who have a weekly deficit of €68.22, which will increase to €76.22 after the introduction of the 2010 Budget.

When a household has a manifestly low income which is considerably less than that required for a Minimum Essential Standard of Living there can be no justification for measures which plunge them deeper into poverty and debt. Other choices are possible.”[3]

In 2009 the Vincentian Partnership also supported the need to protect the National Minimum Wage at its present pre-budget rate of €8.75, as those earning this rate and working 37.5 hours a week still encountered a shortfall of €49.28 a week (if living in rented accommodation) against what the Vincentian Partnership essential budget indicates. As will be discussed, the prices of basic goods and services have in fact risen over the last year, and whilst rents have in general declined this is mainly at the upper end of the rental market.  Thus there are increased difficulties for those earning the minimum wage to survive. The Government’s proposals to reduce this further, in the above scenario by €37.50, would result in a shortfall of nearly €90 a week and €360 a month. In addition the plans to introduce property and water taxes mean that those who will be hit the hardest are those with the least ability to withstand such fiscal reductions.[4]

The minimum wage should be at a level to ensure that every citizen can reach their basic expenditure costs and not be a tool with which to appease employers, the IMF or the EU. It is more important than that, it is the difference between a life of poverty and one of dignity for thousands of people. It also begs the question why the issue of reining in high pay has not been foremost on the agenda? This would have a myriad of positive effects; create more equality in our society, which is better for everyone and lessen the cost of business for companies. It could also create less risk-taking as seen in the financial sector where large bonuses were connected to short-term profit making.

Increases in the price of a number of basic goods

The importance of this is highlighted in a survey conducted by Age Action which found that between the dates of January 2008 and July 2010 the price of a number of basic goods have in fact risen throughout the recession. Increases can be seen in electricity, solid fuel and bottled gas meaning that the average cost of home heating has risen significantly. Other basic goods/services such as healthcare and travel have also seen price increases, for example; GP fees have risen by 8.15%, dental fees by 17.7%, petrol by 11.2%, whilst car insurance has risen on average by 14.8% and health insurance by 32.8%.[5] These figures reveal the increased pressure on low income earners. The combination of these factors will result in the majority of those dependent on social welfare being unable to live with basic dignity.

Wage Inequality

A national debate needs to begin on issues of rights, a social floor and equality in the context of social welfare legislation, and bringing those on lower and higher incomes closer together. The proposed cuts to social welfare payments and the minimum wage will only exacerbate the problem of pay inequality and its social ramifications. Social Justice Ireland has examined the increases in payments to those on social welfare and those in high earning political positions from 1986 to 2010, which highlights the extent of the unjustness of the proposed cuts to those already faced with poverty. The take-home weekly pay of T.D.’s for example rose by over six times more than that of someone in receipt of social welfare[6]; surely the answer to where to reduce spending is to reduce the wages of those who benefitted the most rather than vice versa, thus increasing equality and ensuring that no person on the brink of poverty is pushed over the edge. It is unacceptable that some of Ireland’s most wealthy and powerful groups are not even involved in the government’s debate on where to cut spending.

This shocking disparity between the wealthy and poor in our society, and our blasé attitude to its existence and detrimental impact, was brought to the attention of current debate in the Irish Examiner on the 6th of December last year. This article detailed the extraordinary wages of senior members of our semi-state bodies, who earn more than the leaders of major country leaders, including Barack Obama. The Chief Executive of ESB earns over €700,000 a year, way above what is received by any other public office holder, anywhere, and way above what is necessary to have an extremely high standard of living. It is wage disparities such as this that have led to the culture of risk-taking, money grabbing and overall dissatisfaction with life that is rife in developed countries such as Ireland. While it is welcomed that the Government eventually took cuts to their wages and pensions in the budget it is unacceptable that those surviving on the very minimum, and it could be argued that many are indeed not receiving the minimum required to have an acceptable standard of living, are to have their social welfare cut by a further 5%, the minimum wage to be reduced by €40 a week and taxes and charges on lower income families to be increased.

Conclusion

An opportunity to implement an equitable income structure now exists, and should be implemented before our recessionary lessons are forgotten. We need to decide as a nation the future direction of our society and change the pro-rich culture of the past to one which provides first and foremost the infrastructure to maintain every citizen’s right to equality, dignity, and economic and social security. A 2009 Behaviour and Attitudes Poll commissioned by TASC found that 85% of adults believe the government should take steps to reduce income inequality,[7] while a more recent MRBI poll conducted by the Community Platform found that 82% of the respondents agreed that the Government should introduce a wealth tax. The Governments planned budget cuts are a complete contradiction of this view and will go a long way to increasing rather than decreasing income inequality. The initiative now needs to be taken to start the essential process of introducing greater equality and sustainable progress for our society and for our economy, starting with the introduction of a minimum essential standard of living. This is an achievable goal which will have an immeasurable benefit.

 


[1] Wilkinson. R and K. Pickett, “The Spirit Level: Why More Equal Societies Almost Always do Better” Allen Lane Books, 2009.

[2] Johnston, L. “The Rising Tide that forgot to lift all Boats: poverty, inequality and the Celtic Tiger”, Limerick Student Journal of Sociology, Vol 1(1), 2009, p.6, available at http://www.ul.ie/sociology/socheolas/vol1/1/Louise%20Johnston.pdf, accessed December 2010.

[3] Vincentian Partnership, “Pre-Budget Submission 2010”, September 2009, available at http://www.budgeting.ie/images/stories/Publications/pre_budget_submission_2010.pdf, accessed November 2010.

[4] Based on calculations for a single male adult aged 25+, Vincentian Partnership, “Pre-Budget Submission 2010”, September 2009, available at http://www.budgeting.ie/images/stories/Publications/pre_budget_submission_2010.pdf, accessed November 2010.

[5] Age Action Ireland, “Pre Budget Submission 2011” available at http://www.ageaction.ie/sites/default/files/pdf/Prebudget%202011%20briefing%20documents_0.pdf , accessed December 2010.

[6] Social Justice Ireland, “TDs take-home pay rose by €980 a week while social welfare rates rose only €144 over past 24 years”, December 2010, available at http://www.socialjustice.ie/content/tds-take-home-pay-rose-%E2%82%AC980-week-while-social-welfare-rates-rose-only-%E2%82%AC144-over-past-24-year, accessed December 2010.

[7] McDonagh, T., “Hierarchy of Earnings, Attributes and Privilege Analysis” , TASC 2009, p.2, available at http://www.tascnet.ie/upload/file/9644%20HEAP%20BOOKLET(1).pdf.


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