independent

Wednesday 23 April 2014

Households suffer second worst fall in income after Greece

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HOUSEHOLDS in this country have suffered the second largest collapse in incomes in the EU after Greece.

The gross income of the average household dropped by 9pc between 2009 and 2011, the European Commission said yesterday.

Lithuania, Spain and Cyprus also saw their incomes fall in the two-year period, but not by as much as in Greece and Ireland.

The Greeks suffered a 16pc hit to their incomes.

No amount is given for the average gross income for Irish households, but the most recent Central Statistics Office figures show household income fell to €52,250 in 2011, down from previous years.

The gross income of the average household was as high as €60,000 during the boom.

The EU Commission said the financial crisis has not impacted on households in all countries. In Sweden, Finland, Denmark, Poland and Slovakia income rose in both periods.

The report also says Ireland had one of the highest increases in its youth unemployment rate in the second quarter of 2012, rising by 1.2pc to 30.7pc. This is the sixth-highest overall unemployment rate among those under 25. The proportion of Ireland's labour force who have been out of work for over a year, at close to 10pc is the third-highest in the EU, behind Greece and Spain.

The confirmation that Irish households have been one of the worst hit in the EU came on the day that €1bn in AIB debt was paid by taxpayers here for the bailed out bank.

Banking debts and the gap between what the State takes in and what it pays out are the main reasons why income taxes, charges and levies have all gone up in the past four years.

This has meant that disposable incomes for most families remain under huge pressure.

A recent survey commissioned by the Irish League of Credit Unions found that 1.8 million people have just €100 or less each month after essential bills are paid.

Mortgages and rents are among the most expensive bills for most, with groceries taking second place. This is followed by utility bills. But financial experts said some were not under the same financial pressure.

Higher-paid public servants, retired people with public sector or good private sector pensions, and many of those in semi-states have escaped the worst of the hit on incomes.

These people are among those who are able to save every month, while huge numbers of families with young children are unable to save as they are burdened with massive mortgages and other debts.

The EU Commission also said the average Irish working week is 39.4 hours, tied with Italy. Only Finland, at 39.2 hours, works less. Greece and Austria have the longest working weeks at 42.2 hours each.

Irish Independent

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