Brendan Keenan: Most affluent class suffered the greatest stress during Ireland's great recession
It is impossible for an Englishman to open his mouth without making some other Englishman despise him. There has never been a pithier description of the British class system than George Bernard Shaw's in 'Pygmalion'. But what of the Irish class system - if indeed there is one?
Socialists claim the nature of capitalism means there must be. I once took part in a very long evening where a Danish socialist insisted there was no underclass in Denmark (this was long before the refugee crisis) and an Irish socialist insisted there was, even though he'd never visited.
An Irish person is more likely to despise another from their speech because of what it says about their county of origin, rather than their income or family lineage. The Irish class system hangs in the air invisibly. We all know it exists, but would find it hard to describe.
Full marks then to three economists from UCD, Oxford and the ESRI for giving it a go. The fruits of their labours can be found in the latest edition of 'The Economic and Social Review' and is in line with the attempts to get away from standard, rational homo economicus of past theory and closer to the messy, complex behaviour of real people.
As well as a valour award for wading into the class system, perhaps they should get a bar too, for daring to question the effects of austerity in the Great Recession. It is certainly the public consensus that this was not just a bad idea in itself but an unjust one, because it bore more heavily on the less well-off.
There is no consensus among economists on the first point, not least because, even if the bank losses had been more widely shared, the public finances were completely wrecked and austerity in some shape or form would have been required. But the second point has not been examined much at all - certainly not the effect of austerity on the class system.
As for class itself, it seems to be decided more by income in, say, the USA than it is in Britain, where accent does indeed play a major role. This piece of analysis attempts to combine income and class - and the two do not run strictly in parallel. There are young professionals on meagre salaries, self-employed barely making ends meet and 'routine' workers who do very nicely, thank you.
It is however, an economic rather than a Shavian definition of class which relies heavily on employment. Unusually in such analyses, it is done at the individual level, rather than relying on the overall figures from surveys. Putting income and employment status together, in trying to assess the effects of the recession, the researchers decided to exclude over 65s and households where no one has had a job.
The latter constitute an alarmingly high proportion of the Irish population - and may come closest to the definition of an underclass. Their situation in the recession, along with that of the much more fortunate pensioners, would require a different study.
In this one, income groups are divided in the usual way; from those earning less than 60pc of the most common level of disposable income, through those earning up to 75pc, 125pc and up to 165pc and beyond.
The group earning between 60pc and 75pc of median disposable income are seen as a 'Precarious' class, with the other groups ranked as Poor, Lower Middle, Upper Middle and Affluent.
Those are typical 'class names', but social class involves something more than income. The nature of employment is key, giving those with jobs access to certain economic and social resources, along with varying degrees of security and prospects for advancement.
The higher classes have more wealth, often in the value of their houses, but that also means debt. They also tend to have more financial obligations, from school fees to pension contributions.
Putting names on these classes gives (from the top) Higher & Lower Professional & Managerial; Intermediate/Technician; Self-employed; Lower Services/Technical and Routine (which is a bit wider and more accurate than the old Manual category).
About half the workforce is in the first two categories and 40pc in the bottom two. In itself that is an interesting snapshot of the Irish workforce
Central to the paper is the increase in "economic stress" during the recession. The definition here resembles the deprivation index used as a poverty measure, but with a greater emphasis on housing costs, mortgages and things like back-to-school expenses. Stress is measured by inability to meet these costs without adding to debt or cutting back on other items.
It is not part of this study but, on paper, the sub-prime loan phenomenon was moving people up the social scale by turning them into homeowners. No wonder politicians were reluctant to call a halt.
The Irish property bubble had different characteristics, although sub-prime lending was becoming significant by the end. Even so, the property price crash, when combined with the public finance crisis, meant the Irish crash was worst of all, rivalled only by Greece and Iceland.
The study finds little change in income differences between the groups from 2008-12, although actual incomes were of course under severe pressure. When economic stress is included, a different picture emerges.
In 2008, as one might expect, the two bottom classes were under the most economic stress as is presumably normally always the case. But the increase in stress in the following five years was greatest for the top, Affluent class, where it more than doubled, reflecting things like higher taxes, pay cuts, negative equity and loss of wealth and savings.
The so-called Precarious class had the smallest relative change, with a 35pc increase in economic stress. This compared with a 69pc increase in the next group, the Lower Middle class - the highest figure apart from the 130pc deterioration for the affluent.
The Lower Middle class included many of those who were self-employed in the building industry and lost their jobs in the recession. The analysis finds that, while self-employed made up 11pc of the workforce in 2008, this had fallen to 7.5pc by 2012, as they moved down the earnings scale into the lower services/technical groups; and the bottom Routine group.
There was also a two percentage point move from the top professional/managerial group into those earning less than 165pc of median income. Given the scale of the recession, these are small enough changes. It is different from the experience of Greece and Iceland, with little change in social class positions in the former, and an improvement in the relative stress of the upper classes in the latter.
In the Irish case, pay, tax and welfare changes will have helped even out the differences between groups, although this is not part of the study. The authors do suggest, though, that the results may point to the origin of the 'squeezed middle' complaints, which do not seem to be supported by figures for income alone.
They point out that in 2008 both income and social class helped explain economic stress, with a pretty clear line from most stress at the bottom and least at the top. By 2012, it makes little difference which class one belongs to in terms of economic stress, with the upper groups' comfort zones almost gone.
Looking at income alone, it can seem as if there is a straightforward loss by the poorest groups, leading to claims of unjust austerity policies. Bring in economic stress and it looks more like a middle-class squeeze - in this case perhaps a third of the self-employed dropping down into the Precarious and Poor categories.
This is not the kind of squeeze generally portrayed. That is reflected more in the determined pay campaigns by middle class public sector workers, which the authors see as opposed to gains for lower-paid staff or improved social welfare.
It goes without saying that relative changes are of no comfort to people under economic stress, but they are important for analysing the effects of policy and, ideally, influencing new policies.
It may also be true, however, that changing relativities do affect political attitudes, if only at an instinctive level. The increase in economic stress recorded by the paper was unprecedented and is bound to have influenced, not just people's perception of their own situation, but their view of their position in society, and how society has treated them.