Marc Coleman: Government for the elite, by the elite
Disincentive to challenge the system means that the Croke Park deal -- opposed by the people -- remains in place, writes Marc Coleman
Unless you've returned from a quarter of a century in immigrant exile, you are likely to have heard of the 'coping classes'.
Chances are, you're one of them. When put together, the unemployed, low-paid frontline public and private sector workers, small businesses, squeezed consumers and those in negative equity make up a large minority -- if not majority -- of our population.
It was Eoghan Harris who coined the term 'coping classes' a quarter-century ago. Since then variants of the idea have done the rounds, none as good as the original. David McWilliams's Breakfast Roll Man was entertaining but analytically weak. Then along came the Irish Times with its 'Squeezed Middle'. But the trouble with copying an idea is that you copy its flaws as well as its genius.
Insolent pup that I am, I last week had the cheek to point out to Eoghan his one flaw: as a former Marxist should have known, a dialect must have two sides to it. As Lenin posed it in his famous question, "Kto Kogo?" it is a question of, "Who rules whom?" Any idiot knows the coping classes are suffering. But who is inflicting that suffering? And how do they operate?
Say hello to the other side of the dialectic: the 'groping classes'. Apart from rhyming with 'coping', there is a good reason for the term 'groping'.
At the last general election we saw what happens to governments that make sudden grabs on our incomes. Marginal tax hikes, reductions in tax thresholds and the universal social charge did for Fianna Fail what Lenin did to the Kulaks. It was not a pretty sight. So "grabs" are out and "gropes" are in. A pension levy here. A VAT hike there. A property charge here. A VHI hike there. By making several furtive gropes in our trouser pockets instead of one grab, the State aims to get the same revenue for less political aggravation.
Who is doing the groping? Again, a question posed by Lenin -- "Who benefits?" -- is indispensable. A typical but not exhaustive illustration is given by a 2007 European Commission survey on comparative academic salaries. Compared to €3,744 per month in Germany, a university professor in Ireland earned €7,700 per month in that year. Cuts in pay have, since then, reduced the gap. But costs of living here have also fallen. So that gap remains substantial.
As Professor William Reville pointed out in this paper last week, academics aren't the only ones benefiting from high public pay. They are cited as an example because pay and conditions are more easily compared internationally for academics than for other highly paid public service workers and are a good benchmark. But senior civil servants, local government managers and others are -- as William implicitly points out -- also very well paid.
Who is doing the coping? In Germany the 41 per cent tax rate kicks in at €52,881. Here the salary is €32,800. So the obverse of higher public pay for the groping classes is higher marginal taxes for the coping classes.
Of course, those in the public sector also pay these higher taxes. Which is why lower paid public workers -- frontline teachers, nurses and the like -- are part of the coping, not the groping classes. Although net beneficiaries of the tax system, their net earnings are just enough to cope with Ireland's high basic cost of living.
Not so higher levels of public pay. And unlike German workers, Irish workers face far higher costs for electricity, food, health and alcohol. Here it must be acknowledged that in some cases private sector lobbyists preserving high profits are among the groping classes. And our Government wants to raise alcohol prices even more!
How does the groping/coping classes system operate? Their disincentive to challenge the system of which you are part plays a huge role. As the make-up of the National Economic and Social Council (NESC) shows, the private sector -- small business, for instance -- is greatly outnumbered on that council by members of the civil service, academia and trade unions, ie those benefiting from the Croke Park deal.
So has the NESC ever challenged that deal? No.
All four members of the Government economic Cabinet committee, most of the Cabinet, the entire top staff of the Economic and Social Research Institute, and Government departments are also from public sector or academic backgrounds. To remain credible, the new Independent Fiscal Advisory Council will need to break this trend. Its members are of excellent calibre. But its collective make-up -- all academics -- is a worrying continuation of an overwhelming bias towards Government by the elite for the elite.
Caught between powerful public sector unions and semi-States, the coping classes should be able to look to politics for a saviour. But as politicians' pay is protected by the Croke Park deal, this reinforces the problem.
So while Fianna Fail is stuck in thrall to the public sector and facing a largely left-wing opposition, Fine Gael knows the coping classes have nowhere left to go. Hence the Croke Park deal, opposed by the people, remains in place.
And as I found out last year, trying to challenge this consensus is like trying to kick a dead whale along a beach. I borrowed €10,000 to run for election to the Seanad (TCD panel). Other contenders were academics with better pay, pensions and job security -- funded by your taxes -- than myself. As academics, they also enjoyed the fawning adulation of a social democratic RTE that regards academics as demi-gods.
Predictably, all three academics were elected. And not one has since spoken out against the Croke Park deal.
Unlike this paper, other media outlets have often failed to match their analysis of the "squeezed middle" with a needed commentary on who is doing the squeezing. Some advocates of a property tax even seem more interested in helping the squeezers than the squeezed.
But the coping classes are waking up. And -- as media outlets and Government may discover -- they are capable of squeezing back.
Follow @marcpcoleman and listen to 'Coleman at Large' on Newstalk 106-108fm each Tuesday and Wednesday, 10pm
Originally published in
