Angry, stressed out, getting nothing, paying for everything
Society is not living up to the promise we make to the coping classes. Be careful, says Brendan O'Connor, they keep the show on the road
Published 14/08/2016 | 02:30
Albert Manifold is the CEO of CRH. CRH is the largest company on the Irish stock market.
Albert Manifold was also the highest paid CEO in a round-up by the Irish Times of the pay of bosses at Ireland's biggest companies. Manifold gets paid 87 times what the average worker costs at CRH. The average worker costs about €63k. Manifold earned €5.53m last year, up about a third on what he earned the year before.
Now, before you get up in arms, remember that obviously includes pension contributions and bonuses, and - as Manifold points out - because much of his pay is incentivised, it means that if he is doing well, then the shareholders are too. The shareholders must hope that in the next few years Manifold will hit the €8m per annum he can potentially earn.
This is not to have a pop at Manifold. Any of us would take it if we were talented enough to be offered it. And it's not taxpayers' money or anything. But it illustrates an interesting point. Arguments about the 1pc are usually made in the context of poverty. But if you look at the average worker in CRH, they are certainly not poor - €63k would, you would imagine, make someone middle-class. But their boss still earns 87 times what they do. And if he hit his maximum incentives he would be earning 125 times what the average guy in the middle earns.
Coping-class problems can often be viewed as first-world problems by those who speak on behalf of the poor. And certainly everything is relative. But at an 87th of the boss's pay, you'd have to conclude the people in the middle, as exemplified by CRH workers, are being screwed too.
What's more, they're stressed out and angry; they feel like they are paying for everything and getting nothing in return.
This is a time of year when money feels particularly like water flowing through your hands. It can often feel like everything hits together in August and September. Broke after the holidays and then you get hit with car insurance or health insurance - along with back-to-school costs or college fees.
Of course, some people will say 'isn't it grand for them with their health insurance'. But the reality is that you'd be mad not to have health insurance if you could at all afford it in a country where there are a half a million people on waiting lists.
The coping classes get health insurance if they can because they don't trust the State to provide for them or their kids in the event of medical disaster. They have spent their lives paying up to half their income in tax but they feel like they get very little back. They view the health service as a basket case. And they might be right.
Last week they will have learnt that the HSE has twice as many directors as it had four years ago. Director is the most senior administrative grade in the HSE. Overall, there are 40pc more senior managers in the HSE than there were four years ago. The number went up by 14pc in the last year, 10pc the year before. The number of nurses in acute hospitals increased by 3pc in the past year.
So the coping classes watch as administrators multiply like rabbits in this big behemoth that they pay for, but also pay not to use. They watch as children wait years for life-changing operations, as old people die on trolleys and as one in 10 people in the country are on a waiting list (maybe less allowing for the same people on different lists).
It would annoy anyone.
While the big-ticket items can always threaten to lead to a bad month, where cloth has to be cut a bit, the coping classes are generally not wondering where the next meal is coming from. The coping classes are careful. They make sure there is always money to put food on the table, to keep the show on the road.
Their issues are not always immediate and short-term. A lot of the time the pressure that gnaws away at them is longer-term. The quintessence of the middle-class worldview, after all, is that you think about the long term.
You mortgage the present for the future. You postpone your gratification - forever, if necessary. When you've finished making sacrifices for your own future you start making them for your children's future. And then you die.
And if your focus is the long term then your worries will often lie in the long term, and the long term is perhaps the thing that makes the coping classes angriest.
Because the reason that the coping classes make all the sacrifices they do, the reason they insure themselves against disaster, the reason they delay gratification, they reason they stick for years with a job they don't necessarily like, the reason they mortgage their present, is for one thing and one thing only. Security.
All humans crave security, but it is at the core of the coping-class dream. They give up everything for it. Even the risk-takers and the entrepreneurs among them do it. It's all about establishing a secure base for the future.
But the coping classes were told that there was a deal. There was a promise they thought was made.
The middle-class dream is a bit like religion - give up everything now, suck it all up, spend years in college, years more earning very little, then when you do start earning money get a huge mortgage and suffer to pay it off, then give up your own needs for those of your children.
Pay your taxes and do your duty and, one day, in another life, you will get your reward. You will be secure in your old age, with a roof over your head.
You will die content in the knowledge that all your sacrifices have set your children up to pursue the same promise.
But the deal doesn't work like that anymore. The ones in the middle still make sacrifices and still pay for everything, sure. They pay most of the taxes and they do most of the work. But the promise is not being fulfilled. Now they're as likely to see their kids go off to Australia or in some short-term gig as to see them set up in any kind of secure employment.
The promise of security in your old age is definitely gone. Take those who thought they had a permanent and pensionable job with a defined-benefit pension at the end of it - a pension based on their final salary.
Mercer said last week that the hole in these schemes in Ireland's largest companies almost doubled in the first seven months of the year, from €3bn to €6bn. Included in that selection of companies, by the way, is CRH, where not everyone gets pension contributions wrapped into their €5m-plus package.
The promise of 30 or 40/60ths of your pay in retirement will probably be broken for many of those people. It's happened in many companies already. Instead, they will get an uncertain amount, based on whatever new fund is set up and however it performs, after extortionate fees, in the uncertain markets where only the big guys ever win.
Those who were relying on the State pension won't be any better off. There is a huge hole there and it is going to become unsustainable too.
But the problem is that if the promise becomes unsustainable, then the sacrifice might become unsustainable too - and if the whole middle-class dream and lifestyle becomes unsustainable, and if mugs like us don't buy in, then everyone is in trouble. Because without us in the engine room, not only are there no €5m salaries, but there are no benefits for the poor either.
There's no one to pay for the health service the coping classes try to avoid, no one to pay for all the benefits they never get.
They're angry. And we should look after them. Because without their sacrifice and sense of duty, the whole thing falls apart.