ECONOMIC INEQUALITY IS rarely discussed in Ireland. What public debate does take place is usually constrained to just one aspect: household income, the measurement of which is subject to serious methodological and statistical shortcomings.
The other acknowledged elements of economic inequality are wrongly treated in the commentary as external issues, matters of social policy rather than matters relating to an imbalance of economic power – to ‘economic inequality’. We are talking here about the cost of goods and services; access to quality public services like healthcare, education, childcare and transport. Other areas like taxation, family composition and ‘capacities’; housing, and the cost of climate change are looked at as external.
The result is an almost endless stream of gaslighting by certain politicians, economists, and journalists. We are constantly told that, regardless of our own lived experience, things have never been better.
The commentary this month took the biscuit when we had the awful but hardly surprising news that young people in their 20s and 30s will be the first generation to be worse off than their parents.
Shortly after, some in government and the usual cheerleaders were claiming that Ireland had ‘closed the gap’ between rich and poor and was one of the few countries in the world to have done so.
What is going on?
They were referencing a report by the Economic and Social Research Institute (ESRI) which said that ‘income inequality’ had fallen in Ireland from 1987 to 2019.
In February 2021, Unite the Union explored the problems associated with how household income is measured and calculated in our report Hungry Bellies are Not Equal to Full Bellies, a collaboration with groups and volunteers working to address the effects of economic inequality on the frontline.
In summary, the ‘information’ being used to measure income is based upon an essentially voluntarist and incomplete sample survey of 0.2% of Irish households. This method consistently fails to capture the earnings of the top 1%.
As well as this, the ESRI also looked at data from tax returns and, lo and behold, these showed increases in income inequality as measured by the share of income going to the very top.
However, for some reason, this doesn’t form part of the final output, giving some in Government the chance to hail the fact that income inequality appears to be falling – so long as you don’t count the contrary facts about the rising share of income going to the top 1%.
If this isn’t gaslighting by Government, what is?
In a paper published in March 2020 Barra Roantree, one of the actual authors of the ESRI report, himself highlighted the problem with solely focusing on household survey data, i.e. that the method does not capture the distribution of real wealth in Ireland.
It seems incredible that income inequality therefore can be discussed in the absence of an understanding of the distribution of wealth in Ireland, but here we are. The approach seems to be: ‘Let’s not spoil the spin by taking account of awkward truths’.
The dangers of groupthink
We have been here before. In the years leading up to the 2008 crash, Irish economists and policymakers almost universally presented their ‘wisdom’ in a way that avoided the obvious – we were in the midst of a speculative bubble, financed through the foreign borrowings of private banks, and we were heading off a cliff where a blanket guarantee was seen as the solution.
Remember that ‘soft landing’? No, me neither!
A similar trend is occurring now, where serious and significant issues of economic inequality are being downplayed or ignored, notwithstanding that this inequality is scarring the lives of a massive proportion of our population. Their real lived experiences are being brushed aside as a figment of their, and our, imaginations.
This is why we need to talk about economic inequality which, in the words of the independent think-tank TASC, refers to the unequal distribution of all material resources and requires a full analysis of their seven suggested areas (income, wealth, public services, taxation, family composition, capacities and the cost of goods and services), rather than simply a narrow look at the single measurement of income that suits a political agenda.
In its recent report, the ESRI skims these issues yet still uncovers startling levels of deprivation and a housing crisis that is negatively defining many people’s very existences, as well as blighting the future for an entire generation of young people.
Having looked under the lid, however, the analysis seems to stop there and revert back to the overall theme that the Irish economic system is improving the everyday lives of everyone. I view it like this: ‘if we ignore all the bad stuff things are just great’.
The delusion is not sustainable, however. Beyond the electoral cycle that seems to be all that matters to some, entire generations are having their life expectations changed and shaped in the real world.
To them who is in office hardly matters. Poverty matters. Deprivation matters. Precarious work matters. Housing and homelessness matter. Real people understand that, in their real lives, there is a difference between their income, and what often becomes their poverty once they start paying for essential goods and services.
Economic inequality affects millions of people in Ireland today. It is seen not only in a housing crisis but in a care crisis as well. On top of this, we have low pay, precarious work, underfunded and understaffed public services, and a tax system that actively encourages and rewards tax avoidance.
We cannot simply look at these deliberately narrow household income surveys, ripped as they are away from the wider social and economic context. Government gaslighting the populace worked before 2008 and for the period afterwards, but we are in a different world now.
Poverty and deprivation are too entrenched, the housing emergency too all-encompassing, public services too decayed, and the greed and deceit of the few is too obvious for us to fall for it again.
Brendan Ogle is the Senior Officer of Unite the union in the Republic of Ireland. Brendan also posts on Unite’s political blog, Unite for a Real Alternative.
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