It is often argued that the recession has been rough on all of us but that high income groups have had it the roughest. European Commission Director István Székely came to Dublin late last year to assure us that the ‘the better-off sections of Irish society have borne the largest share of the brunt of the bailout programme’. I don’t know whether this was intended to soften the blow as it were, making the austerity programme more palatable. I do know, however, that it is not true. Dr. Székely is not alone; many have argued, using ESRI findings, that higher income groups have borne the greatest burden during the recession. I will critique the ESRI findings below but first let’s go through some other evidence.
Wage Increases Higher income households have managed to increase their incomes, as noted in a recent Friday Stat Attack.
This is not true for all sectors. For instance, public sector managers and professionals have taken substantial hits in income. And there are compositional effects to take into account. However, at a national level we see that this group has received a substantial increase in income compared to other workers whose weekly earnings have flat-lined. Even if higher-income groups have taken a hit through tax increases they have managed to recoup a large part of this through increases in earnings. This didn’t happen for most other workers, never mind those on social protection.
Losing one’s job is probably the biggest hit a household can suffer. How have theselosses been distributed?
Managerial and professional employment has actually increased during the period of recession while all other occupations have experienced a decline – in some cases, substantial declines. And the occupational groups suffering a loss have lower income than the managerial and professional groups. So lower income groups, on average, have been hit by the jobs recession much harder than higher-income groups.
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If the Irish Times report is correct, the Government is on track to implement tax cuts for ‘middle income’ families. The Taoiseach is certainly keen on it:
‘“The priority will be to reduce the very high tax rates faced by families on middle incomes,” said Mr Kenny.’
What’s really interesting is that for many middle income families, tax cuts would be practically meaningless. And what they need is not even on the agenda.
How much income do middle income households earn? The following should only be seen as an approximation since it relies on income distribution data from the Survey on Income and Living Conditions which presents the information based on deciles (i.e. broken down on 10 percent categories). Further, the latest Survey from 2011 doesn’t provide a decile breakdown; so this data is courtesy of Dr. Micheal Collins from the Nevin Economic Research Institute. As well, the household breakdown comes from 2010 (again, as 2011 doesn’t present this data) – a breakdown for adults and children. That’s why this should be treated as indicative.
This middle income lies in the 4th to 8th deciles, making up 55 percent of all adults and 60 percent of all children. What is the average income for this middle group?
It ranges between €8,000 and €52,000 per household. This refers to ‘direct’ income – income from PAYE work, self-employment and capital sources (e.g. capital gains). This middle income group is made up of part-time workers, minimum wage workers, and the low-paid: a household of two working adults would mean average gross wage of €26,000 each. There would also be average and above-average income earners.
Data from the Revenue Commissioners is also helpful but there are some caveats. There is a chance that there is double counting – where people might have part-time self-employment combined with part-time PAYE work. Further, married couples are counted as one taxpaying unit. And the data only includes those in work. Notwithstanding these, the Revenue data corresponds with the above.
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The November issue of Socialist Voice is out now. Download it here, or view it online. Also available to read below.
- Will we or won’t we? [EMC]
- Departments I, II and III and economic crisis [NL]
- Pension benefits wiped (part 2) [Brendan Ogle]
- Printing money to support the debt bubble [NL]
- James Connolly and 1916 [NOM]
- There is an alternative (part 2) [EON]
- Time for more independent leadership [NOM]
- Rail and bus transport: Why nationalisation was the obvious answer [RNC]
- Political statement
- International Meeting of Communist and Workers’ Parties, Lisbon: Speech by Eugene McCartan, general secretary, CPI
- The unseemly rise of Qatar [BG]
- A serious defeat for workers and their union [TMK]
- Willie Walsh floats again [MA]
- Letter: Ionad Buail Isteach
Will we or won’t we?
It is now clear that the Irish state will leave the “bail-out” or restructuring programme some time in December. The Government is spinning the argument that when we eventually get the EU-ECB-IMF supervision off our backs we will “regain our sovereignty” and independent action.
The question has to be asked, When have we ever had full sovereignty and independence?
They are claiming that Government policies have worked to such a degree that they may not need any “precautionary credit line” from the European Stability Mechanism, the euro-zone rescue fund. For this state to get access to such funds would require parliamentary approval from a number of countries, including Germany.
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Belfast & District Trades Union Council invite you to their Annual May Day Lecture:
Who Profits from Peace?
Thursday 2nd May at 7pm to 9pm
Belfast Unemployed Resource Centre
45/47 Donegall Street, Belfast , BT1 2FG
Will decent manufacturing jobs be replaced by low paid jobs in the finance and services industry?
The ‘double transition’ – towards peace and neo-liberalism – has been evident in the world of politics, finance, law and accountancy. This talk will examine who the winners and losers are in the peace process and will also explore ‘who really profits from peace?’
All welcome and talk will include a Q&A session.
Speaker: Dr Conor McCabe
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This was originally posted on Unite's Croke Park Report blog today.
Let’s take a step back from the details in order to see what is happening in the wider economy – which has now fallen back into a double-dip recession according to the CSO report today. The real game plan is to suppress wages in order to boost profits.
This strategy was first announced Budget 2009 under the Fianna Fail-led government which claimed there was no alternative to wage reduction. The current Government has maintained that strategy. We have seen a restructuring of Joint Labour Committees which has removed much of the protection accorded to low-paid workers in sectors such as retail, restaurants and hotels. And we know what the Government wants in the current Croke Park 2 proposals.
Further, the Minister for Finance has called for cuts of 6 to 10 percent in the banking sector, even though the Mercer Report showed that over 40 percent of all staff in the three covered banks (Bank of Ireland, AIB and PTSB) has an average wage of €30,000.
Profits, meanwhile, have been on the increase. In 2010 and 2011 combined profits rose by 11 percent. If we take a longer view – and compare wage and profit growth projections with the Eurozone average – this is what we find, courtesy of the EU Commission’s AMECO database.
There are two things of note in this:
First, Irish profit growth greatly exceeds that of average Irish wage growth. Irish wages per employee in 2014 is projected to be below what they were in 2008; Irish profits on the other hand will have grown by 30 percent. In the Eurozone wages and profits is projected to grow in tandem.
Second, Irish profits are growing at a faster rate than the Eurozone average while Irish wages are lagging far behind.
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“How can women defeat austerity?” – Selma James at Maynooth, 13 March 2013
An MA Community Education, Equality and Social Activism podcast, available on the Community Education, Equality and Social Activism (CEESA) website here.
Founder of the Wages for Housework campaign and coordinator of the Global Women's Strike, Selma James brought a lifetime of movement experience to bear in this electrifying talk. Asked to speak to organisers' needs in the current crisis, she spoke to a roomful of 30 activists and researchers passionately, clearly and incisively for an hour without notes.
To understand austerity, we have to understand the struggles which gave birth to the welfare state, the poverty which went before it and the attacks it has been under since the 1970s, and the first part of her talk tackled these themes. In the second part she discussed the weaknesses of movements since that time in responding to the attacks: how NGOisation has demobilised movements and left them dependent on funders, far-left parties try to substitute themselves for popular action while social-democratic parties simply represent a slower attack on people's basic needs. In the third and final part she discussed the urgency of building a broader movement which does not see class and gender, anti-racism or environmental survival, as separate and opposed issues. A lively and engaged discussion followed.
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The Office of National Statistics (ONS) in the UK have today released regional economic indicators. By bringing together data from a variety of sources, they provide a partial but very useful snapshot of where the economy under the jurisdiction of the Northern Ireland Assembly sits in relation to the British economy. The entire dataset is here and is very useful.
Below is the ONS chart on employment.
Oddly, repeated attempts to copy the full chart failed because the last item on the legend (directly below Scotland) kept dropping off. It’s Northern Ireland. In the chart, it is the orange line. Clearly, someone at ONS has a sense of humour.
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PRAXIS and Equality Studies are proud to announce that a Communiversity event will take place on Tuesday March 12th 2013 2.30 – 4.30pm E114, UCD Newman (Arts) Building where renowned activist and author Selma James will address the theme DEFENDING CARING AND WELFARE IN CARELESS TIMES. The event comes at a time when austerity policies, triggered by the global economic meltdown, are devastating already-burdened communities. In particular, the rights and entitlements hard-won over the years by carers, overwhelmingly women, are being senselessly eroded. Despite all of this, care work and other work that women must do for the survival of families and communities continues, unabated and uncelebrated.
Selma James is known for coining the phrase “unwaged” in the 1970s to describe the unremunerated care work done almost universally by women. She continues to address these and other inequalities in her work, and information on her new book Sex, Race and Class, The Perspective of Winning: A Selection of Writings 1952-2011, is available at the end of this press release. She is co-author of the women's movement classic The Power of Women and the Subversion of the Community. James founded the International Wages for Housework Campaign and is coordinator of the Global Women's Strike. She is also the widow and former colleague of influential historian CLR James.
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As part of the launch of Irish Left Review Journal
Who Benefits from Austerity?
Councillor Catherine Connolly
Dr. Conor McCabe
A Talk in Charlie Byrne’s Bookshop, Middle Street Galway
Thursday, 28th of February 2013, 6-8pm
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Audio recording of Prof. Terrence McDonough’s talk in Galway tonight, “What the !$%! just Happened? A Discussion on the Recent Debt Deal.” Thanks to Vicky Donnelly of Galway Debt Justice for organizing the event.
Mcdonough12-02-13-talk by Conormccabe on Mixcloud
McdonoughQ&A-12-02-13 by Conormccabe on Mixcloud
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“AN official of the former Anglo Irish Bank must swear a “yes or no answer” as to whether the bank was solvent in 2009 when it allegedly gave €88m in loans to a developer, a judge said today.
A solicitor for developer Kevin McNulty had sought court orders requiring that all documents be disclosed, or “discovered”, relating to Anglo's solvency after September 2008 as part of his client's defence to proceedings brought against him by a NAMA company which took over the Anglo loans.
One of the “fundamental defences” being advanced by Mr McNulty and his companies was that Anglo, which was nationalised in January 2009, was insolvent when it purported to make the alleged loans, solicitor John Larney said in an affidavit to the Commercial Court.
While there was “a wealth of evidence in the public arena” suggesting the bank was insolvent since 2008, such material woud not constitute the proof required by a court and that was why discovery was being sought, Mr Larney said.”
“Denis O'Brien, the telecoms entrepreneur, is listed as owing Anglo Irish Bank €833.8m on foot of personal and corporate loans just after the bank was nationalised in 2009, making him its then sixth largest borrower.
Denis O'Brien is the largest single shareholder in Independent News & Media, the publisher of the Sunday Independent. He has lost an estimated €500m on his 21.6 per cent stake in the media group.”
That €500m loss is the amount O’Brien borrowed from Anglo for the shares – is he going to pay back a loan for an asset he no longer has? If and when the loans are transferred to NAMA, there is a strong possibility that they will be rendered null and void. Of course, before that there is a chance that the loan will be sold on, probably at a very significant discount. Loans transferred to NAMA from AIB and Anglo had up to a 70% haircut. But with a 'quick sale' on the back of this rushed liquidation if someone is willing to offer to buy them at a 90% discount then the liquidator would sell them. All that someone in Denis O'Brien’s position has to do is ask someone else to offer to buy the loan for him. The Anglo loans that Denis O'Brien has includes the one that funded the €45m acquisition of Siteserv, the infrastructure and utilities support services business. As the Indo article reports:
“This purchase was controversial as the taxpayer took a €105m hit.”
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These scanned pages are intended as an aid to research into the world of finance in Ireland. I’m going to try to post as much of the primary and secondary source material I come across as I can. The purpose here is purely educational.
Some quotes, just to give a sense of the articles below.
First, from Ray Douglas, group general manager, Treasury, of Allied Irish Banks, talking about Dublin’s biggest dealing room (January 1988, pp.37-38):
The commissioning of our new 80-position dealing room is Bankcentre is only the latest step in a long association between Allied Irish Bank and the global financial markets. In the mid-1970s AIB identified the emerging global financial markets as a major business opportunity for the bank… Our objective is to make AIB a significant niche player in the markets, trading on our own account, providing liquidity to the markets and acting as market maker in some specific areas…
During the 1980s the emergence of the new global financial markets in securities and in off-balance sheet instruments such as SWAPS* and FRAs** has provided a further range of opportunities for AIB.
**Forward Rate Agreement
Ireland had been hot-wired into the world of swaps, derivatives and other off-balance sheet activities for at least twenty years before the crash of 2008. This was no ‘bad apple’ scenario.
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Matthijs Krul in his Notes and Commentary blog has provided a very thorough and critical Marxist analysis of Seth Ackerman’s essay The Red and the Black published in the latest issue of Jacobin magazine. We’ve already posted the section of Doug Henwood’s show, Behind the News which features a long interview with Ackerman about his essay.
I believe it’s worth reading Krul’s response for those interested in thinking about what a socialist economy would look like, and the how objections to its potential are ill-founded. The post is positive about many of the points raised by Ackerman, but he highlights their limitations and does so in a much convincing way than others who have so far tackled The Red and the Black essay. I’d like to provide a large chunk which gets to the heart of his critique, but also indicates how ‘central planning’ which is seen to have failed in the Soviet Union, flourishes today within capitalist society. Krul’s argument is that this failure was a political one as the Soviet economy remained subject to the logic of accumulation.
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Kevin Higgins, The Boy With No Face (Cliffs of Moher: Salmon Poetry, 2005) Kevin Higgins, Poetry, Politics and Dorothy Gone Horribly Astray (Belfast: Lapwing, 2006) Kevin Higgins, Time Gentlemen, Please (Cliffs of Moher: Salmon Poetry,…
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