Intergenerational inequality in Ireland: younger generations pay the price of austerity and recovery

Rory Hearne: There is a requirement for a greater focus on who paid the highest price in austerity and who continues to be affected by inequality in the recovery. Austerity and the recession disproportionally impacted negatively on younger generations (particularly increases in child poverty, emigration levels and the restructuring of the labour market towards greater levels of precariousness). There are multiple social crises in areas such as housing and health that result from policies pursued during austerity and these crises contradict the narrative of ‘recovery’.

For richer or poorer: Oxfam's wealth inequality report withstands scrutiny

Oisin Gilmore: A few days ago, Oxfam released a report stating that “the richest 1% have now accumulated more wealth than the rest of the world put together” and that “just 62 individuals had the same wealth as 3.6 billion people” (p.2). This has been reported widely and was front page news in the Irish Times. These stats come follow on from previous reports which Oxfam produced last year and the year before that.

Should Ireland’s largest bank should be sold off to foreigners?

Paul Sweeney: Should Ireland's largest bank, AIB, be sold off to a foreign bank or hedge fund? This is the plan. It is not being debated. Why not sell it off to whoever will buy it? All six Irish owned banks collapsed. The bosses were stunningly incompetent. All shares were wiped out and more. They cost the taxpayer €64bn, one and half times total tax revenue in the year of rescue.

Zero-hours legislation?

Alicja Bobek: In 2015 the government commissioned a study on zero hours contracts from the University of Limerick.  In a welcome development it now seems (Irish Times 4 January 2016) that the government is preparing to accept some of the recommendations of the UL study.

In a ‘zero hours’ contract employees agree to make themselves available for employment but are only actually paid if there is work for them.  While such contracts are widespread in the UK – and have become a major issue of public concern – the UL study documents that they hardly exist in Ireland.  Instead there are ‘if and when’ contracts: the employer offers extra hours (at the standard hourly rate) but it is up to the employee whether he or she takes them on. This would be fair enough – if it actually happened.

TASC’s own Working Conditions in Ireland Project also identified the problem of variable hours as discussed in the UL report. This is especially an issue in the hospitality sector.  In the hospitality sector we did background research and interviewed trade union officials.  Crucially we also did in depth interviews with ordinary employees. These interviews highlighted how the reality can be very different to that presented by the employers.

In hospitality overall earnings are low, partly because the hourly wage rates are low, but also because many people work short hours.  Even during the economic boom average working hours in the industry were falling (from 42.3 hours per week in 1992 to 32.9 in 2008) due to a disproportionate increase in part-time work.  Currently more than 40% of all at work in the industry are recorded as part-timers (CSO 2015).  The problem is that while many employees are happy to work these hours, others are working fewer hours than they would wish.

Furthermore, many are often working irregular hours, only knowing their shifts a few days in advance.  As one of our informants said:
You are lucky if you know a week in advance. But more often you would find out, say on… Thursday, that you have to come in on Monday or the Saturday or whatever. So it was all quite short notice. I mean… you couldn't plan for the week ahead. (Fast food worker)

Indeed, given that workers can sometimes be sent at home without pay at literally a moment’s notice the term ‘shift’ is actually a misnomer.  As the same informant reported:
The manager did the thing… Calling people in and then sending them home. He was like ‘oh, we need another member of staff in, on tonight, now!’ So you know, it would be your day off. But you will have the warning that, you know, Thursday might be busy. So then you get the phone call and you go down there and then you are being told: ‘No, no, actually… We thought we needed you, but you can go home now’. (Fast food worker).

As this quote also shows, employees are often asked to work extra hours at very short notice.  All this makes it difficult to plan family and other responsibilities; it makes it impossible for part-timers who want more work to take on a second part-time job.

Our interviews also showed that workers often feel they cannot refuse to work extra hours.  At worst refusal can jeopardise the job, even at best it can mean less chance of being offered more suitable hours in the future.  Employers can use control of hours as a mechanism of control, effectively varying people’s pay in order to ensure good behaviour.

In the hospitality sector – and probably elsewhere too – many Irish employers have fragmented jobs, turning full-time employment into part-time employment (and not quite full-time employment).  Rather than having one full-time employee working regular hours, employers prefer to have two part-time employees whose hours can be adjusted at short notice at the employer’s convenience.  This is certainly ‘flexibility’ as so often praised, but flexibility that suits employers and imposes inflexibility on employees.

The UL recommendations will go some way to tackling these problems.  Especially important is the simple proposal that whenever an employee is required to report for work, they must be offered an absolute minimum of three continuous hours work. Of course many businesses will claim that they have to make their employees work very flexible hours if they are to stay competitive.  However, our research shows that there are businesses in the hospitality industry which are successful without making their employees change their working hours at very short notice.  Unfortunately it will require legislation to ensure that they do not remain unusual.

Dr Alicja Bobek is the researcher on TASC's Working Conditions in Ireland project.

Lobbying transparency register up and running - but vigilance needed for potential loopholes

Nuala Haughey: Ireland’s mandatory lobbying register is now online. But what exactly does it mean? Well, for the first time members of the public are able to go online and search a database to see who is attempting to influence policy or legislation in a range of areas. (www.lobbying.ie)

One area of Public Investment: PPPs

Paul Sweeney looks at one area of public investment:  It is worth noting that the Government seems be to a little cooler on Public Private Partnerships than it and its recent predecessors were in the past. Does this mean that a new government might finally undertake a serious study of their effectiveness and cost?

Forecasting the Future.

Paul Sweeney makes some forecasts for 2016.

No one had forecast that Ireland’s growth rate would hit 7 percent in 2015. No one. So making predictions for 2016 is a mug’s game but like most economists, mine are projections based on previous trends. They do not predict shocks. 

Have yourself a casual Christmas: 21st century ‘entrepreneurs’ and bogus self-employment in the Irish construction sector

Alicja Bobek: For the majority of us across Ireland, Christmas means holiday. It is a festive season, providing us with a few days that we can spend with family and friends. Most of us will also be off work while being paid in one form or the other. At the moment, more than 90 per cent of Irish working population is classified as ‘employees’, which means that they have their holiday time guaranteed by law.

Neither Boston nor Berlin?

David Jacobsen: The main front page article in last week’s (20/12/2015) Sunday Business Post begins with Enda Kenny’s promise “to cut tax bills for households to bring them in line with ‘lower tax’ countries such as the US and Canada”. The particular target for tax cuts is the high earner bracket, where in Ireland the effective tax rate is 45% while in the US it is 29%.  It seems that we are back to that old dilemma of ‘Boston or Berlin’, with Fine Gael firmly in the Boston camp.

Do we seriously want to make Ireland like the USA?

James Wickham: In a recent speech the Taoiseach stated that he wanted taxes in Ireland to be as low as those in the USA.  Why?  Allegedly this will ensure more jobs are created.  It is in fact quite astonishing that in 2015 the USA can still be held up as a model in this way.

Mortgage arrears crisis remains unresolved with possibility of up to 30,000 repossessions

Rory Hearne: Despite the recent Central Bank figures showing a decline in mortgage arrears there are still 37,000 mortgages for a principal dwelling (home) in arrears for over 720 days. The mortgage arrears crisis remains unresolved and continues to cause a huge amount of suffering to those affected. This blog provides an overview and analysis of the current situation based on the Central Bank figures in order to understand better the extent of the on-going crisis.

NAMA Part II: In order to solve housing crisis the government should redirect NAMA to prioritise its social mandate

Rory Hearne: NAMA presents a rare historic opportunity for the Irish people to provide affordable housing on a sustainable, equitable and well-planned basis to meet the needs of its people rather than speculative investors. This post outlines a number of possible ways that NAMA should be redirected to address the housing crisis.

NAMA Part 1: The Christmas gift from the Irish taxpayers to the super wealthy and vulture funds

Rory Hearne: Tis the season for 'good will' and 'giving' and all that but NAMA is giving away too much from Irish taxpayers to property vulture funds and speculators. Last week NAMA outlined how it intends to provide 20,000 ‘starter’ homes by 2020 and invest €1.9bn in Dublin’s Docklands.  But these so-called ‘starter’ homes will be sold to the international vulture funds who currently see Irish property as the ‘hottest’ investment in Europe. NAMA actually has the land and finance to provide 50,000 homes over the next decade. The Minister for Finance should order NAMA to move away from speculative office and residential development with global financial investors to focus instead on providing affordable housing.

The Paris Agreement: a major step forward or ‘worthless words’?

Paedar Kirby: Amid the widespread welcome for the Paris Agreement, what is striking is the lack of consensus on just how significant it all is. James Hansen, former head of the NASA Goddard Institute for Space Studies in New York and regarded as one of the world’s most eminent climate scientists, went so far as to call it “a fraud, a fake, worthless words” while Cara Augustenborg, chair of Friends of the Earth Ireland, said in Paris that “the gap between ambition and action in the deal is too big.” So should we welcome or denounce this long-awaited global treaty?

Lucky to have job? Research highlights bad working conditions in hotels and restaurants

Alicja Bobek: Hospitality has always been an important part of the Irish economy. As the labour market recovers from the recent recession, jobs are growing in the accommodation and food services sector around the country. By the second quarter of 2015 there was a total of 136,700 people working in this sector, 20,000 more than at the lowest point in 2011. While this job creation is obviously to be welcomed, there is a question about the quality of these jobs.

Flat tax maths doesn’t stack up

Cormac Staunton: The debate on flat taxes arose again this week with RENUA promoting the idea of a flat income tax model for Ireland. They invited me to speak at a symposium they held in order to discuss the proposed model. While I now have a few more details from them, and it is not quite as regressive as I had initially calculated, nevertheless my assessment remains that this model would dramatically increase inequality in Ireland.

Prevention is better than cure – tackling corruption as a health risk to our democracy

Nuala Haughey: In the wake of this week’s RTÉ Investigations Unit programme on standards in public office, there have been renewed calls for a host of legal reforms. These include the establishment of a properly resourced anti-corruption body with full police powers, the appointment of an independent Planning Regulator and the long-overdue overhaul of our toothless ethics ‘watchdog’, the Standards in Public Office Commission.

CoP21: Might Paris begin the long road to a low-carbon society?

Peadar Kirby: The fact that the world’s leaders turned up at the beginning rather than at the end, as happened in Copenhagen in 2009, seems to have galvanised action during the first week of the Paris CoP. Leaders such as Presidents Obama and Holland made plain the gravity of the crisis facing humanity and the urgent need for action, both pledging their countries would be at the forefront. The contrast with the Taoiseach, Enda Kenny’s attempt at special pleading for poor Ireland couldn’t have been sharper. It was a moment for Irish heads to hang in shame.

Inversions as a Tax Strategy - Implications of Ireland

Jim Stewart: The recent announcement by Pfizer that it is taking over Allergan and establishing their joint ‘headquarters’  in Ireland is another illustration of complex corporate tax strategies.  Moving headquarters to a low tax regime in order to minimize tax has become a well known phenomenon. Corporate inversions have a long history as a tax strategy.

Diversions and Inversions: Some Implications of Corporate Tax Strategies

Jim Stewart: The announced takeover by Pfizer of Allergan and consequent redomicile of Pfizer to Ireland has attracted enormous international media interest. Much of this comment is critical of both Pfizer and Ireland.  This blog considers one aspect of Pfizer and MNE tax strategies, that is switching profits away from or to a tax jurisdiction (Tax Diversion).  A further blog tomorrow will discuss inversions as a tax strategy, and some possible implications of the Pfizer transaction.