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LivingStandards3

Its All About Living Standards

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Following on from my recent blog about the squeezed middle which showed that middle income groups received less than the national share of income than the EU-15 average (due to high income groups taking more) it might be worth having a look at general living standards in comparison with other European countries. This is about living standards, not just income.

Eurostat measures living standards through actual individual consumption. Unlike private consumption (i.e. consumer spending) actual individual consumption

‘ . . . encompasses consumer goods and services purchased directly by households, as well as services provided by non-profit institutions and the government for individual consumption (e.g., health and education services).’

It, therefore, measures consumption not only of goods and services, but public services provided by the government. As Eurostat states:

‘Although GDP per capita is an important and widely used indicator of countries’ level of economic welfare, (actual individual) consumption per capita may be more useful for comparing the relative welfare of consumers across various countries.’

In short, actual individual consumption can be treated a proxy for living standards. So what is the relative welfare of consumers (i.e. everyone) across Europe? The following captures the relationship of real (after inflation) living standards in purchasing power parities between al l EU-15 countries and the EU-15 average.

LivingStandards1

We can see that Ireland is in the bottom half of the table – 15 percent below the average. Our living standards are closer to Greece and Portugal than it is to the EU-15 average and the majority of countries.

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#Jacobin1916 Launch Tour

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DUBLIN LAUNCH CONFERENCE
March 19th, Liberty Hall, from 12pm 
 
In Partnership with SIPTU
Workers’ Republic Conference
Event page -> bit.ly/JacobinLaunch
 

12:00 – Registration

 

13:00 – 13:45 Why #Jacobin1916

Jer O’Leary, James Connolly speech
Bhaskar Sunkara, Jacobin Editor
Karan Casey, Singer (by video)
 

14:00 – 15:30 Ireland’s Revolution

Chair: Tish Gibbons, SIPTU
Padraig Yeates, SIPTU
Niamh Puirseil, Historian
Donal Fallon, Come Here to Me
Sara O’Rourke, Activist
Sarah-Anne Buckley, NUIG
 

16:00 – 17:30 Art of Rebellion

Terry Moylan, Music Historian
Music from the revolutionary period
 

18:00 – 19:30 The Republic in the 21st Century

Chair: Ethel Buckley, SIPTU
Bernadette Devlin-McAliskey, Former MP
Robert Ballagh, Artist
Lynn Ruane, TCDSU President
Dan Finn, New Left Review
Brian Hanley, Historian

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Where are the Barricades?

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Five years after his 4-CD compendium The World Turned Upside Down – Rosselsongs 1960-2010  the radical English singer/songwriter Leon Rosselson has released a new album, Where are the Barricades? Rosselson turned 80 in 2014, so his announcement that “after some sixty years of songwriting… this is my final recording” is hardly shocking, but will nonetheless distress those for whom his consistent advocacy of social change and support for the underdog has long been an inspiration.

Rosselson, the son of communist Jewish immigrants to Britain, made his name contributing satirical songs to the classic 1960s BBC TV show That Was The Week That Was, and he has never abandoned a very English form of political satire. Indeed some more po-faced purists may well be aggrieved by the sheer frivolity of the first song on the album (the earliest version of which dates back to 1986):

                         Full Marks for Charlie.

                        He’s the bugbear of the bosses.

                        Workers of the world unite!

                        Charlie Marx is dynamite.

In fact the transmission of serious political comment through the medium of cheek, conveyed in a voice that in an earlier review I described as possessing a “vaguely Monty Pythonish quality (Eric Idle comes to mind!)”, is so characteristic of Rosselson that the listener’s response to his music may depend on her/his tolerance of the combination. To which I must add a further comment from that review: “When Rosselson sings, the vocal idiosyncrasies are inseparable from his intractable and endearing integrity.”

The satirical mode is conspicuous in Looters (“You smash up the shops and you get free stuff/ It’s all about the money nowadays…innit?”), Benefits (“Come all you skivers, welfare cheats...”), and the title song, Where are the Barricades? (here making its fourth recorded appearance) which effortlessly manages a direct quotation from the Communist Manifesto:

            See how the bubbles are bursting

            ‘All that’s solid melts into air’

            The stairs are beginning to rattle

            And the rats are beginning to stare.

However, Rosselson’s range is wider than this. While he has admitted to avoiding love-songs (“love, a word that has rarely passed my songwriting pen”), he has instead composed what he calls “relationship songs” entailing “a sideways look at love, sex, marriage, relationships and angst…” Active Ageing is a comical example of this, while Marital Diaries are bitter-sweet slices of married life spoken by Rosselson and Liz (Elizabeth) Mansfield. To the latter (minus Rosselson) is assigned Paris in the Rain, an “attempt at an English French-style chanson”, beautifully accompanied on piano by Fiz Shapur. Fair’s Fair, originally written for Roy Bailey (who participates in a couple of songs on this album, but not this one) is a seemingly apolitical celebration of the fun of the fair, rollercoaster, dodgems and all. Four Degrees Celsius, opening and closing with a line from the fourteenth-century poem Piers Plowman (‘On a summer season when soft was the sun’), is an enigmatic allegory that may or may not evoke ecological apocalypse.

I have previously described Rosselson’s anti-Zionist Song of the Olive Tree as “perhaps his most beautiful composition”, and perhaps the most powerful song on the new album is The Ballad of Rivka & Mohammed, the note on which in the CD booklet is almost an essay on Israel’s persecution of the people of Gaza.

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Historic Screening of Mise Éire and Saoirse

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Sunday 13th of March, 2pm, Liberty Hall 

Book now, as tickets for this event are going fast. In what should be an historic day, we feature for the first time ever in a public screening,  both of the great Irish director George Morrison’s  films on the one programme.

Additionally, Peadar Ó Riada, son of the legendary Seán Ó Riada will be playing music from the film scores.

We also have a filmed interview with George by Lelia Doolan, which was specially commissioned for the occasion.

We are now delighted to confirm the attendance of the President of Ireland,  Michael D. Higgins who will make a presentation to George.  

There are still tickets available but you need to book fast. We don’t expect that there will be any available on the day.

In the event of any problems booking please contact :-
Robert – 087 6257521

Tickets available online from box office at Liberty Hall:-https://www.ctb.ie/tickets/ctb/indexframes.htm

Link to TG4 programme :-
http://www.tg4.ie/en/player/home/?pid=4781555736001

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Crisis remains an investment crisis

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This article appeared originally on Socialist Economic Bulletin on Monday, March 7th

Prior to the recent G20 meeting leading international economic bodies such as the IMF and the OECD made tentative calls for increased investment, although this was often confused with increased spending. This is a belated or partial recognition of the real source of the crisis in the advanced industrialised countries. In terms of actual changes to policy it seems to have made no impact at the G20 whatsoever.

As the world economy is once more slowing and there are again a series of spurious explanations offered for this, it is worth revisiting the actual causes of the ongoing crisis which first became widely apparent in 2007. In this piece the advanced industrialised countries as a whole will be the reference point, using aggregate data for the OECD. But each individual economy within the OECD simply provides its own unique combination of these common factors, including Britain.

If one word can summarise the entire crisis in the advanced industrialised countries it is: Investment. The fall in Investment preceded the fall in GDP. It was also the largest component of the fall in GDP and it is the sole component which has failed to recover.

These points are illustrated in Fig.1 below, which shows real GDP, Final Consumption and Investment (Gross Fixed capital Formation, GFCF) for the OECD as a whole, using US$ Purchasing Power Parities.

Fig.1

Investment (GFCF) first fell in the OECD in 2008. Both GDP and Final Consumption Expenditure continued to increase and only fell for the first time in 2009. Falling Investment caused the crisis. On a full-year basis the total decline in Investment was 13% from its pre-recession high to the low-point of the recession in 2009. By comparison GDP fell by 3.5% and Consumption fell by 0.3%. The fall in Investment was far greater in proportional terms than GDP or Consumption.

Even though Investment is a far smaller proportion of GDP than Consumption in the OECD, its decline in monetary terms was far greater. From the pre-recession peak to the low-point of the recession Investment fell by US$1.3 trillion (in PPP terms). Consumption fell by US$ 0.03 trillion, or US$30bn, and barely constitutes a blip in the chart above. The fall in Investment was the largest component of the crisis.

Since the trough of the recession in 2009 real GDP has recovered by US$3.95 trillion. In 2014 GDP was US.55 trillion larger than its peak in 2008. Consumption is stronger. It has increased by US$2.17 trillion since 2009 and is now US$2.26 trillion above its pre-recession peak. By contrast Investment has recovered by only US.94 trillion from 2009 to 2014 and it remains US.37 trillion below its 2007 peak, or US$366 billion. The economic crisis in the OECD remains an investment crisis.

Consumption requires Investment
Economics should be the study and practise of achieving the greatest sustainable material well-being of the whole of society. For most of humanity this still revolves around the struggle for food, shelter and clothing. In the advanced industrialised countries, the required quality of those necessities has increased alongside the desire for good health services, education, welfare, access to recreation and leisure, and so on. Unfortunately, for material reasons a great deal of confusion surrounds that goal and the methods to achieve it. 

The (inverted Say’s Law) argument that increased Consumption will lead to increased Investment has evidently not materialised in the current crisis. As noted above, Consumption has increased but Investment has not. This was also the case in the Long Depression at the end of the 19th century as well as in the Great Depression of the 1930s. In both cases Investment continued to stagnate or fall despite a rise in Consumption. Currently we are in a phase of what Marx called the hoarding of capital. Keynes used the terms liquidity preference.

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Over Crisis-ed and Under-Paid

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We have a housing crisis, a homeless crisis, a health crisis, an investment crisis; our education system is under-resourced, our indigenous enterprise sector is out to lunch and the Dail can’t seem to put together a government.

And if all that wasn’t bad enough, we are under-paid.

Some new data regarding employee compensation and wage levels in Europe has come on stream. Here we will review the headline figures. Over the next few weeks we’ll get into the detail.

First up is a comparison of employee compensation. Employee compensation combines both the direct wage the employer pays you and the social wage which the employer pays to a social insurance fund that allows you access to income supports and public services (e.g. health). This is the standard measurement of workers’ wages, used by the CSO, Eurostat, OECD, etc. So at a total-economy level, how do we compare with other EU-15 countries?

Underpaid 1

There’s Ireland – below the EU-15 average and in 10th place, only ahead of low-pay UK and the poorer Mediterranean countries (the data can be found here and here.   To get to the EU-15 average we’d need an increase of 6 percent – but we’d still be in a lowly 10th place.

However, when we look at other central and northern European countries (removing the four peripheral Mediterranean countries), we fall well behind. We’d need an increase of 18 percent.

Employee compensation is not equal to ‘labour costs’ (I really hate that value-laden term). In some other countries, employers pay higher payroll taxes than just employee compensation. For instance, in Sweden, employers pay a social wage (social insurance) of 17 percent of the workers’ wage. However, they also pay an additional 12 percent in other payroll taxes – money that can go into public services and income supports not related to social insurance. In Austria, employers pay 17 percent in social wage and another 7 percent in payroll taxes. In Ireland, employers pay 8 percent social wage and another 0.5 percent in payroll taxes.

 

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Un-Squeezing the Middle

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Seamus Coffey has been digging up some numbers which he self- deprecatingly refers to as one more ‘silly addition’ to what can be done with income distribution statistic. But silly they are not. They give insight into another aspect of Ireland’s income structure.

When we debate income distribution we usually do so through the prism of the relationship between the ‘top’ and ‘bottom’ income groups or the Gini co-efficient. What Seamus looks at are the fortunes of the middle income group and specifically compares Ireland with Sweden in the middle deciles (a decile represents 10 percent of the population). I reproduce Seamus’s table below but if it is difficult to read you can access it here.

Squeezed Middle 3

The numbers measure the percentage of ‘equivalised income’ each decile receives (equivalised factors in household size). In the table we see that in green Ireland, the lowest 10 percent income group receives 3.2 percent of all income; the top 10 percent receives 24.4 percent – or nearly a quarter of all income. Regardless of the magnitude, there is nothing surprising in this. Top income groups take more than low-income groups.

However, Seamus points us to the middle of the decile group – what has been described in the debate as the ‘squeezed middle’ and compares us to blue Sweden. There is a huge gap between the two countries in these middle deciles – 4th to 7th. Indeed, if Irish squeezed middle households took as much of a percentage of total income as Swedish middle decile households, each Irish household would be, on average, €5,000 better off according to Seamus. That’s a tidy sum.

Using the Eurostat data here is my own take. Rather than compare Ireland to Sweden (Sweden is pretty egalitarian but they’ve been at it for decades), I compare Ireland with the average of our peer group – other small open economies: Austria, Belgium, Denmark, Finland and Sweden. And since I’ve used the middle 60 percent in the past I’ll keep to that and calculate the income for households in the 3rd to 8th decile. That’s a bigger middle.

Squeezed Middle 1

Ireland’s low and middle income groups are below the share of those same groups in the other small open economies. However the Irish top 20 percent group take considerably more than their counterparts in the other five countries. What does this mean in Euros? If Ireland had the same share of disposable income:

  • Households in the lower income group would receive, on average, an extra €2,200.
  • Households in the middle income group would receive, on average, an extra €2,300.
  • Households in the high income groups would, however, lose on average €9,100.

In small open economies, low and average income groups make more at the expense of their high income groups.

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The Economy is What Happens When You’re Busy Making Election Plans

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An interesting piece of information came out from the CSO last week, three days before polling day. It showed increases in employment falling to a trickle. Are we seeing a new pattern emerging or just a short-term blip on the long road to full employment? Let’s look at the trend.

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There are a couple of points to make here.

First, a significant part of the big increase during 2013 is likely to have been statistical (I discussed this here). During this period the CSO was making adjustments to its sampling base and specifically warned against interpreting trends. Employment increased phenomenally during this period even though we were still in a domestic demand recession which is be a big strange. Once the CSO ended their adjustments employment increases fell to almost nil – one more suggestion that the 2013 surge has to be treated cautiously. This is more than just a historical point; it may go some way in explaining why people weren’t feeling the recovery – because tens of thousands of jobs were only created on paper.

After 2013, employment statistics are more robust. It started off slow and rose to 16,000 jobs created in the second quarter of last year. But now we come to the second point.

In in the second half of last year employment increases slowed substantially. In the last quarter in 2015, employment rose by less than 5,000 – nearly two-thirds down on what was happening only six months previously. In the first half of 2015 employment rose by 30,000; in the second, 12,000. That’s a considerable deceleration.

How do we explain this? As mentioned, it could be a blip – one has to look at the long-term trend. Or we could be seeing pent-up demand coming through in 2014 as the economy burst out of a lengthy period of recession and stagnation. As the economy settles down – the Government expects GDP growth to slow considerably in a couple of years – so will employment. Are we seeing the beginning of those trends?

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Two Books Set in Ireland: Photography and Fiction

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Breakfast at Cannibal’s Joe, Jay Spencer Green

Joe runs a CIA office in Dublin and he’s having problems with his cover as the manager of a company that is expected to be making a profit just like any bona fide company. This is the starting point for a novel that never lets up on its humourous attitude to matters that in an alternative universe – like the one we live in – would be the cause of severe consternation.

Jokes come fast and furious, shooting across every page of the novel, and most of them are Joe’s. The reader may need reminding that this character is an American secret service operator because his brand of humour is black and so laden with irony as to make him sound like the quintessential stereotype of the smart-arsed Dubliner who finds it difficult to take anything seriously. Sometimes the jokes are funny in an informed kind of way, as when Joe describes an MI6 agent with whom he is having difficulties as ‘the sort of asshole you see in photos surrendering Singapore to the Japs’. At other times they are just funny in a cosmopolitan way, as when a bomb goes off in Connolly St station when it is not the rush hour but still busy because of train delays: ‘leaves on the line, a suicide in Raheny, commuters from Sligo sabotaging their train so they wouldn’t have to go home to Sligo for the weekend’.

More common are jokes of a purely gratuitous nature, as in a list of collective nouns (‘…an army of amputees, a shitload of nappies…) that has not the slightest relevance to the bizarre plot that is unfolding. Breakfast at Cannibal’s Joe is to be read as an antidote for humour-deprived states of mind or just anyone suffering from mirthlessness in a mirthless world. 

Beyond Maps and Atlases, Bertien van Manen (Mack)

Bertien van Manen came to Ireland with pain in her heart, recently widowed, and a simple camera in her hands. ’I was guided by a feeling and a search, a longing for some kind of meaning in a place of myths and legends’. Hmm… that’s worrying, smacking as it does of someone who might have recently completed a short course in the kind of Irish literature that only the non-Irish enjoy reading. It doesn’t help to learn that she loves the work of John Banville.

Such reservations soon evaporate in a Celtic twilight when looking at the photographs in Beyond Maps and Atlases for what you see is less a homage to Yeats and the fairies and more a bleak but not nihilistic documentation of a small island with its western seaboard facing the un-human Atlantic. I don’t know if all the photographs were taken in the west of Ireland but that’s the feeling they convey: scary seascapes, dark and forbidding foliage, a country road eerily lit in yellow by a car’s headlights, human shapes disfigured by bad lighting and a cheap camera and a truly repellent image of a dead and fox-ravaged lamb.

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After the Votes

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So what’s it going to be? Coalition? Minority Government? Extended stalemate?  What we do know is that support for the Government collapsed – by over half. Labour’s decline was anticipated, Fine Gael’s wasn’t – at least not in the pre-election polls.

We also witnessed Fianna Fail’s significant advance with a 40 percent increase in their first preference vote, winning an additional 25 seats.

In the new Dail Fine Gael and Fianna Fail look set to take 94 seats (at the time of this writing). In 2011 they won 95 seats. However, this is a smaller Dail. In percentage terms, the two conservative parties won 57.2 percent of seats in the 2011 Dail; now they won 59.5 percent. The conservative vote didn’t fall; it just swapped between the two parties. And this doesn’t count the increase in conservative and gene-pool TDs who look to increase from six to eleven seats.

Progressive parties and independents put in a credible performance. However, the breakthrough that many were hoping for (including me) didn’t come. Sinn Fein increased their popular vote by 3.9 percentage points with the AAA-PbP increasing by 1.5 percentage points. Combined, these two parties look set to gain 13 seats at the time of this writing – positive but about half the Fianna Fail increase. The Social Democrats took three percent but couldn’t increase on their outgoing total while the Greens are back in parliament with two seats. However, the number of progressive independent TDs doesn’t appear to be increasing of this writing.

So where next for progressives? Much will depend on the formation of government and potentially an election in the short-term. But for the medium-term here are a few suggestions.

1.    Start an Honest Conversation

In policy terms, wipe the slate clean. One of the messages coming out of the election was that people didn’t believe the promises to cut taxes, increase public spending and establish fiscal stability. Rightly so. There is little fiscal space – far less than parties claimed. The future is extremely uncertain: low Eurozone growth, interest rates, oil prices, currency movements, the stability or otherwise of the European banking system. Then there’s the question of the character of the recovery (how much real, how much statistical). And what about Ireland’s continuing and unsustainable reliance on a corporate tax regime which works at the expense of other countries. Start an honest conversation about the challenges we face over the next decade – and don’t be surprise how many people will thank us for it.

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Artist and Empire

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The subject of this exhibition is representations of the British Empire by artists over the past four hundred years. You might expect a bucket of blood to confront visitors in the first room at Tate Britain but the subject has to be approached more carefully given a recent poll indicating that 44% of British people look back to their empire with pride. So the first room of the exhibition, entitled Maps and Flags, plays it safe with examples of early cartography and some splendid Ghanaian asafo flags. Brian Friel’s Translations comes to mind as a more insightful probe into the role of maps in the making of the empire.

The second room, Trophies of Empire, looks at the variety of artefacts and art associated with Britain’s imperial project and, given the size and extent of the empire, it is not surprising to find an astonishing range of material on display. There is Stubb’s grand painting, ‘A Cheetah and Stag with Two Indian Attendants’, illustrations of plants and animals by amateur scientists and naturalists and no shortage of material resulting from looting, bartering and purchasing by traders and soldiers. Carved heads from Benin, a small part of the systematic plundering conducted by British forces in 1897, are the prize exhibits here but a visit to the British Museum is necessary to appreciate just how magnificent was the art practised in a corner of Nigeria centuries past.

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“The Recovery Has Nothing to Do With the Government”

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“The recovery has nothing to do with the government”. So says Ashok Mody, former head of mission to Ireland for the IMF, according to a report in the Sunday Business Post. He goes on to argue that the current composition of the recovery is unsustainable and that it is unfair. He warns that an export-led recovery cannot be relied on in a slowing world economy and that regressive taxes should be changed. A full interview with him is promised later.

The judgement is valid. In terms of growth the current government’s track record is unexceptional. Taking the 4 ½ years of economic data under the FG/Labour coalition, real GDP grew by 15%. This is an average annual rate of just under 3.2%. This is slightly slower that the growth rate in the last 4 quarters of the previous government of 3.6%. No-one, not even in Fianna Fáil pretends that the previous government had sound economic policies.  

The reason for the moderate average growth rate, very modest following an extremely sharp recession, is that the economy actually contracted in the first part of the FG/Labour term (as shown in Fig.1 below). In the first quarter of 2013 real GDP was 0.7% lower than FG/Labour had inherited almost 2 years earlier. The trend line in the graph shows where GDP would now be if it had continued at the same pace over the last 4 ½ years.

ireland_realGDP

But the former IMF chief is mistaken in one important respect. The recovery is not export-led.

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At the Bottom of the Table

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The election enters the last few days. So many issues that were barely mentioned. How much time was given over to the fact that over one million suffer multiple deprivation experiences? How much debate was devoted to the 100,000 households in arrears and the many more in negative equity? Remember that bank debt that we absorbed? But no mention of a Financial Transaction Tax to start clawing back a little of that socialised private debt.

And there was absolutely no time devoted to benefits for people in work (apart from tax cuts which workers will end up subsidising through reduced public services and income supports). There was no mention even after a report published last week from Glassdoor, an international recruitment, company. The Journal ran the headline:

Ireland is bottom of the EU pile for social benefits’

This accurately described the report. Still no debate.

Glassdoor compared a range of social benefits for people in work and Ireland did not fare well. Take for instance what happens if you become sick at work. In Ireland you have to wait six working days before you can draw down the benefit and you get a flat rate of €188 from the Department of Social Protection. That’s about 27 percent of your wage. What do workers get in other countries?

  • In the Netherlands, employers are required to pay 70 percent of pay for up to two years
  • In Germany, employers are required to 100 percent of the wage for the first six weeks. After that, the state pays 70 percent of the salary for up to 78 weeks.
  • In Austria, workers receive up to 50 percent of wage for up to a year.

The main benefit other European workers get (apart from the UK and ourselves) is sick-pay that is income linked (though in most there is an income ceiling; these ceilings are above the average wage). This cushions the fall in living standards for those who fall ill and maintains consumer spending in the economy.

What about family benefits for those in work? Ireland has a very high level of maternity leave at 42 works, considerably than most other countries. However, only 26 of those weeks are paid at a maximum flat-rate of €230 per week. This is 33 percent of the average wage.   What about other countries?

In Austria, Denmark, France, Germany, the Netherlands, and Spain new mothers get 100 percent of previous earnings for the whole period of leave. Italy pays 80 percent of earnings while Belgium starts out at 82 percent, falling to 75 percent over time. Again, there are income ceilings above the average wage which, therefore, progressively benefits those on low-average pay.

In addition, many countries have paid paternity leave; not Ireland (though this has been promised in the general election campaign).

Another category where Ireland features at the bottom is unemployment benefit. It should be remembered that benefit is time limited in EU countries and is intended to bridge the gap between employment (what’s called frictional unemployment). In Ireland, you get €188 per week (27 percent of average wage) for 26 to 39 weeks. Other countries are much more generous:

Austria provides 55 percent of wage for up to 52 weeks. In Germany you get 60 percent of wage for up to two years. In Denmark, if you pay into an unemployment insurance fund (most do) you get 90 percent for up two years. The rules in many of these countries can be quite complicated but Ireland has the weakest set of benefits for people between jobs, apart from the UK.

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A Different Starting Point: Work, Enterprise and Homes

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In a previous post I suggested that the debate was getting out of hand. In actual fact, we have almost no fiscal space (not after inflation, demographic pressures and the sleight-of-hand regarding Irish Water investment). Then there are those external events: low-growth, volatility in the equity markets, asset bubbles which rarely end up other than a bust (and still no one talking about Brexit).

Yet we have a promise-land political debate: tax cuts, more public spending, more investment – honey and manna and wine flowing;  detached from domestic and global reality. Eerily enough, the debate is even detached from the economy (as if throwing about small bits of money at this or that will change the fundamentals).

But one should be slow to criticise unless there is some alternative at hand. So here’s my go. However, mine has a different starting point than tax cuts or divvying up a tiny fiscal space. I will address three issues– and none of them cost money (that is, impacts on our new friend, the fiscal space). But if pursued, they would make life a lot better for a lot of people.

1.    Quality Workplaces

In a recent report the OECD claimed that earnings quality, labour market security and a quality work environment go hand-in-hand with higher employment. Of course; you can’t build a modern sustainable economy on low-pay, job insecurity and poor working conditions.

Therefore, let’s have a Decent Work Act which can help build quality jobs, based on ICTU’s Charter for Fair Conditions at Work:

  • Start the process to a Living Wage
  • End precariousness – through certainty of hours at work
  • Give part-time workers the right to extra hours in the workplace when they become available (this is actually a EU Directive that has yet to be transposed into Irish law)
  • A progressive public procurement programme – so that we don’t get images like these from Government Ministers, parading the vests and names of race-to-the-bottom employers
  • Statutory Sunday premium and over-time pay
  • The right to collective bargaining and a significant extension of Joint Labour Committees to all low-paid sectors and occupations.

This will start to give certainty in the workplace, promote quality jobs, increase domestic demand and investment – and the great thing is that it would actually be a revenue raiser for the government, not a cost.

Lesson: change the power relationship between labour and capital to start favouring the former.

2.    Develop New Enterprise models

The debate assumes that we can build a modern market economy through tax cuts and eliminating red tape. If that was the key to success, we should have the largest indigenous enterprise sector in Europe. Instead, we have one of the smallest. So let’s get real.

I previously highlighted Davy Stockbrokers’ assessment of investment in productive activity prior to the crash – that the overwhelming majority of it came from public investment and public enterprise companies. So let’s learn and apply this lesson.

First, create new – and expand current – public enterprises; in such areas as advanced broadband, green technologies and alternative energy (e.g. ocean, etc.), public transport, etc. This can be through stand-alone activity, partnerships with private companies, whatever works.

From this we should enable local government (or create new regional institutions) to establish municipal enterprises – a standard feature in continental Europe and North America. These are essentially local public enterprises but they can be formed in partnership with local and private capital. This would facilitate areas where there are low-levels of enterprise activity (whether urban ghettoes, cities/towns outside Dublin, or depressed rural areas).

But we can go further, supporting alternative business models: community and neighbourhood enterprises, labour managed enterprises, new company models based on commercial non-profit activities (some may find this exposition of alternative business models – from the Democracy Collaborative).  And this could be funded – through equity – by the Ireland Strategic Investment Fund, with little impact on the Exchequer.

Lesson: once we get over the idea that jobs can only be created through private capital (and private capital alone) a number of alternatives can arise.

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