Tuesday 25 October 2016

The middle is getting battered - despite what the ESRI says

Published 03/05/2015 | 02:30

REALITY CHECK: The ESRI has denied the existence of the squeezed middle
REALITY CHECK: The ESRI has denied the existence of the squeezed middle

Here we go again. The Economic and Social Research Institute, the country's leading think-tank, has denied the existence of the squeezed middle.

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That is the group that has ended up with limited income, but whose members feel they are paying for everything. This group feels it has borne the brunt of the downturn.

But a working paper issued last week by the ESRI dispelled the notion that this group has suffered the most.

The paper - Crisis, Austerity, Recovery: Income Distribution through the Great Recession in Ireland - concluded that the poorest section of Irish society suffered the largest income contraction.

It follows a paper published last December by the ESRI that said high- and low-income families have been hardest hit by budgets since 2008.

ESRI research professor Tim Callan said there was a misconception that middle-income households were hardest hit.

And he memorably told this newspaper there was no excessive suffering or even a phenomenon of a squeezed middle: "When I hear talk of a squeezed middle, I want to reach for a gun."

This is getting beyond a joke - because it is not long ago since the ESRI concluded that the squeezed middle has indeed been hit hardest in the painful adjustment of the last seven years.

Last May, Christopher Whelan, Bertrand Maitre and Helen Russell outlined findings that were "consistent with the middle-class squeeze thesis, as viewed in social class terms".

Then there was last year's paper, entitled Distribution of Income and the Public Finances penned by John FitzGerald for the ESRI, which concluded that welfare payments have been protected and high earners have been wiped out - leaving the load to be shifted onto Middle Ireland.

You would be forgiven for being confused.

The ESRI denies it is being inconsistent, and insists that issues examined in various papers are complex. It received €5m in grant-in-aid from the Government last year, but says that this has no effect upon the conclusions of its research.

Whatever the ESRI says, the middle certainly has been squeezed hard.

The spring statement was published last week, and much discussion will follow it, debating which groups should get a recovery dividend.

Not only is the squeezed middle paying for everything - from the social welfare of unemployed people, to an ailing health system - but the squeezed middle generally don't have a medical card, but still have to part-fund their children's schools and pay for health insurance.

And as for pensions… well, forget that for those struggling on in the private sector.

How extraordinary that the ESRI can't consistently find evidence of the pressure on middle-income earners.

The Government should ignore the conflicting outpourings of the ESRI, and recognise the reality of the pressure on Middle Ireland, especially those in the private sector.

Twitter: @CWeston_Indo

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