Good News on the Economy from Europe but a Warning?

Paul Sweeney: There is some good news on the Irish economy from Eurostat. But hidden in the text is a warning to another member state, Luxembourg, that may threaten us in the next quarter, if the European statistical police, based in Luxembourg, find out how lavish and spendthrift the government has been, and intends to continue to be, with certain public assets.

There is no “value for money” in giving away public assets for nothing.

Paul Sweeney: The Minister for Health Simon Harris insists that “his ‘golden share’ in the new €300 million State-funded national maternity hospital means the public interest will be protected and the facility will operate independently.”

But why give away public assets, to anyone, to any company, to to any charity or to any religious order? Why is a so-called “Golden Share” needed when we, the people, should own the asset?

St Vincent's Hospital with €300/500m Free Gift Investment in red

Brexit, Income Tax and the Social Market Economy

Nat O'Connor: Various lobbyists have used the opportunity of Brexit to repeat their frequent calls for Ireland to lower its income tax rates. For example, EY reported in the Irish Independent 'Slash income tax or Brexit will be wasted' 3 April 2017). Minster Noonan has indicated his desire to do so (24 Feb 2017, Irish Times) and Minister Varadkar is presented as a 'low tax' candidate for Taoiseach (25 March 2017, Irish Independent).

There are now two problems with this analysis.

A European Treasury – One answer to the EU’s economic woes

Katja Lehto-Komulainen: In Rome, EU leaders pledged to build a “prosperous and sustainable Europe” where “economies converge”. Fine words - but empty ones without more investment, especially in Member States with weaker economies. That is why the European Trade Union Confederation is urging the setting up of a European Treasury for public investment.

Security of hours for part-time retail workers – it should be about the weekly wage rather than the hourly rate

Sinead Pembroke: For decades now, the retail sector has become synonymous with part-time, low-paid and insecure contracts. However, this has not always been the case; retail was once considered to be good, secure employment, and we should be moving towards making working conditions in this sector more secure again. 

Housing shortage – whatever happened to the workers?

James Wickham: There’s a lot of building to do: Ireland needs a housing building programme, a renewal of infrastructure, investment in public transport especially in Dublin. Meanwhile, office construction is already growing (count all those cranes). It’s hardly surprising that firms are trying to persuade emigrants to come back home. Who’s going to do the building?

Policing Costs €1.6bn in 2017

Paul Sweeney: With the many controversies around the very poor management of the Guards,  it is worth seeing what the Irish policing service costs . This cost is of course not the same as attempting to see if we are getting value for money. It is up to you, the public to decide if we are getting value for money from the €1.6bn which will be spent on policing in Ireland in 2017. There is a further €39m spent on the Department of Justice and Equality which also oversees the prisons, courts, equality, etc. too.

The Daniel O'Donnell Income Effect

Paul Sweeney: They say if Daniel O’Donnell left Donegal, the average income in the county would fall. It is still low even with Daniel living there. Average disposable income in Donegal is the lowest in Ireland in 2014 at €15,061, compared to the highest in the capital Dublin at €21,963. Donegal is 31% lower or almost €7,000 per head less per the CSO. As the map below shows there are nine of the 26 counties with relatively low incomes compared to some others.

Social implications of precarious work: possible consequences of atypical employment

Alicja Bobek: Since the financial crisis, and through the recovery, we hear more about the increase of precarious work. Precarious employment means insecurity, as it mostly refers to those with atypical contracts: including irregular part-time workers, self-employed with no paid employees and people employed on a temporary basis. The academic debate tends to focus on changes in the employment relationship itself, while not much attention is given to the social implications of precarity. There are some possible consequences of being in precarious employment, including financial difficulties, limited career opportunities, housing issues, or delayed family formation. While not all precarious workers are affected in the same way, it is worth discussing some of these implications.

Northern Ireland's Options to Stay Close to the EU

Nat O'Connor: At Belfast Imagine! Festival of Ideas and Politics, I hosted a session: Could Northern Ireland be an independent member of the EU, or have “special status”.

I thought it was important to have a forum during the festival for people to discuss the EU. I’m not pushing any particular outcome, but I present the case for taking this seriously—and what realistic options are available. Those in attendance had plenty to say on the topic too!

What follows is a summary of my contribution to this debate.

Beacon South Quarter crisis reflects the worst of Turbo Capitalism

Paul Sweeney: De-regulation, privatisation, outsourcing, low taxes, bad housing policy, speculation, regressive tax policy, and poor public services reflect turbo capitalism. This is the tragedy that is hitting many in the Beacon South Quarter.  

The strange non-death of public spending

Andrew Watt: In 2011 Colin Crouch wrote a noted book entitled The strange non-death of neoliberalism. In it he discussed why neoliberalism had managed to avoid being killed by what had appeared to be its nemesis: the global financial and economic crisis. 

Time to make AIB an Irish citizens' bank

Paul Sweeney:  The Government strategy for privatising AIB has focused solely on the art of the deal – the price, how much to sell, and when to sell our 99 per cent. There has as yet been no discussion about what comes next, including control of Ireland’s second-largest bank; its future governance; the importance of credit to SMEs and individuals; or where the billions raised will be invested. These longer-term considerations are far more important than this short-term focus on the deal.

Company law as another beggar-my-neighbour policy?

Jan Cremers:  Since the introduction of the European internal market, company law has been increasingly judged in terms of its impact on ‘competitiveness’.  This has led to some worrying developments.

Where should MNC profits be taxed?

Proinnsias Breathnach: The role of intellectual property (IP) rights in the tax avoidance strategies of multinational corporations (MNCs) in general, and Apple in particular, appears to have received little media coverage. 

Bill Gates Proposes a Tax on Robots

Paul Sweeney: There has been a lot of media discussion recently about the increasing possibility of robots displacing workers. 

When Bill Gates, founder of Microsoft, suggests an income tax on robots, then we know the potential disruption by robots of jobs is serious. “You ought to be willing to raise the tax level and even slow down the speed” of automation, Gates argues here.

The Rich Will Always Be With Us?

Nat O'Connor: Programmer, investor and essayist Paul Graham has written a thoughtful counter-argument about economic inequality (link). It is worth reading in full. For me, it exposes some central ideas that need to be discussed about economic inequality.

In brief, Graham makes the case that startups--and he is probably thinking of Silicon Valley tech startups--create wealth but also increase economic inequality (as measured by the Gini Coefficient or quantile ratios). Graham argues for reducing poverty and for preventing those with wealth from buying politicians. But he argues that increased economic inequality is inevitable because of the link between technological development and the possibility of an individual making a great deal of money. Hence, 'If accelerating variation in productivity is always going to produce some baseline growth in economic inequality, it would be a good idea to spend some time thinking about that future. Can you have a healthy society with great variation in wealth? What would it look like?'

Ireland’s New Capital Investment Plan and its New Industrial Strategy

Paul Sweeney: A major speech made by the Taoiseach last Thursday 16^th February on proposed changes in Irish economic policy was lost in the chatter about his departure.  

The Taoiseach set out two major economic plans: a ten year capital investment programme and the development of a new industrial strategy. 

The modern company: too important to be left to the shareholders alone?

James Wickham:  Is there only one way to run a company?  If any group of people get together for a common economic activity, must they organise themselves as if they were a private limited company?

TASC has started a project 'Everyone's Business: Employee voice and the modern company'  to explore these questions.

Within Ireland it is usually taken for granted that the purpose of a company is solely to create the maximum possible value for its shareholders.   Such a model assumes that employees are simply resources for the company to use or discard as it sees fit; it assumes that employees have no independent voice; it posits that other possible stakeholders (customers, suppliers, the local community…) have a purely financial and contractual relation to the company.

Dominance of  shareholder value

Yet this ‘shareholder value’ understanding of the company is relatively new and is certainly not the only possible form of economic organisation within a market economy.  Indeed, the dominance of shareholder value is often seen as contributing to the recent expansion of economic inequality and job insecurity.

The dominance of shareholder value models now goes way beyond the private sector.  First of all, state-owned companies appear to be increasingly managed as if they were privately-owned – by shareholders.  Even more bizarrely, the governance systems of charities, NGOs and even housing associations and co-operatives are increasingly copied from the private sector – and a very particular private sector at that.

Alternative traditions

Elsewhere in the European Union there is a long tradition of employee representation within companies. For example in countries such as Germany employees are directly represented on the company’s supervisory board; in many more countries employees have representation at enterprise level through various forms of works councils.  By contrast in the UK employee voice is effectively limited to employee share-holding.  Some other European countries also facilitate co-operative forms of organisation which ensure the democratic participation of all involved.

In Ireland there is a strong tradition of co-operative enterprises within the. agri-food sector.  Nonetheless Ireland has become increasingly dominated by the ‘Anglo-Saxon’ shareholder value model of the enterprise, despite some experiments with workplace ‘partnership’ in the 2000s.  There is however one exception.  The Worker Participation in State Enterprises (1977) enabled the election of worker directors to the boards of state-owned companies. 

Thinking about employee voice

In 2012 the National Worker Directors’ Group commissioned a report from TASC on the effectiveness of worker directors on state company boards1.  Our new project firstly updates that report through a study of the current experience of worker directors in Ireland; secondly it places the Irish experience in the European context of other forms of employee representation.  The project aims to facilitate public discussion of forms of economic governance that can facilitate employee voice.

TASC Discussions on Employee Voice

Central to the project is a series of TASC Discussion events:

• Saturday 25 February 2017  ‘What would you do for work’  Public discussion of workers’ rights after screening of the film ‘7 Minutes’ as part of the Dublin International Film Festival.  Cineworld, Parnell Centre, Dublin 1, 14.00 - 16.30. 

• Thursday 23 March 2017 ‘Shareholders or Stakeholders? Enlightened corporate governance for our times.’ Expert discussion, ESB HQ, Fitzwilliam Street, Dublin 2, 18.00 - 20.30

• 11 May 2017 ‘No one way: Forms of employee voice in Europe.’ Expert discussion, GPO O'Connell Street, Dublin 1, 18.30 - 20.00

• September 2017 Report launch: ‘Everyone’s Business: Employee voice and the modern company’

TASC’s project is not about putting forward any one simple solution – it’s about making public the different experiences of company organisation and it’s about imagining different ways of organising firms in the  modern world.

James Wickham is Director of TASC.

Who’s going to take care of our carers? Precarious work in the homecare sector

Sinéad Pembroke: As anyone who has a family-member in need of homecare knows, private homecare is very expensive. But like childcare, what do we really know about the working conditions of carers in the private sector? And are the high fees going towards providing decent working conditions for our carers?