Friday 24 November 2017

Dan O'Brien: Touch of class as people move up social ladder and confound 'left behind' view

'In a world in which polarisation between the rich and skilled on the one hand, and the poor and unskilled on the other was on the increase, one would expect to find it showing up in these class figures.' (stock photo)
'In a world in which polarisation between the rich and skilled on the one hand, and the poor and unskilled on the other was on the increase, one would expect to find it showing up in these class figures.' (stock photo)
Dan O'Brien

Dan O'Brien

The structure of the economy and how it is evolving concerns everyone in business. Few, if any, sources of information can beat the five yearly census for giving detailed granular information on those matters.

The latest batch of numbers from the last census, taken 14 months ago, tell us many things about a central aspect of the economy - the nature of work, skill levels and class. They point to a country making a lot of socio-economic progress.

One commonly held view on rich world economies, usually stated as fact, is that people are working in more precarious circumstances and that the ranks of the "left behind" are swelling fast. There is really very little evidence in most countries to support this view. In Ireland, there is next to none. While there is a significant minority of people who are in poverty traps, and for whom the Celtic Tiger did little, there is far more evidence to show that more and more people are moving up the social ladder, not getting stuck on its bottom rungs. The latest census data shows this very clearly.

Among the many breakdowns of the population contained in the data is socio-economic class, based on skill levels and broad occupation category.

The number crunchers at the CSO have included questions in the census on class for decades. There are 10 categories, all included in the accompanying chart. The entire population is included, and not just workers - children and other dependants are categorised on the basis of the category in which the head of their household falls.

In a world in which polarisation between the rich and skilled on the one hand, and the poor and unskilled on the other was on the increase, one would expect to find it showing up in these class figures. The data actually show the opposite.

From 1996 (the start of the economy's catch-up growth spurt) until 2016, there was a huge movement in Irish society up the socio-economic ladder. The absolute and relative size of the "higher" classes grew, while the reverse happened for the "lower" classes.

That trend continued over the five years from the 2011 census to last year, suggesting that whatever negative effects some trends may be having - such as technology and globalisation - they are either doing more good than harm and/or other trends - such as higher educational attainment - are having a bigger overall impact.

Consider the unskilled and agricultural workers, along with their dependents. In the mid-1990s, 350,000 people, or around one tenth of the population were in these two lowest socio-economic groupings. Last year, their absolute number had halved. As a share of a much expanded population, just 3pc of people were unskilled, labouring on someone else's land or dependent on people who were in one of those categories.

The census doesn't tell us much about the conditions of those in these categories, but as the absolute numbers involved are falling, the worst possible interpretation of the data is that those who are left behind are becoming relatively worse off than the rest of the population. The much more positive interpretation, and one which it seems hard to see how anyone would dispute, is that Ireland's social mobility ladder is certainly not broken, another argument of those who make the "left behind" case, particularly in the US.

Another angle on the debate is the claim that more people are working in more uncertain circumstances - think of all those youths bicycling around cities with outsized backpacks delivering takeaways. Yet again, there is limited evidence internationally to back up this view of increasingly insecure working conditions and even less in Ireland - a very long report on zero-hour contracts, for instance, had to generate a lot of padding after it found that there are none!

Even more positively, the socio-economic census data show that the social class most likely to make up the "precariat" is in decline.

Back in the mid-1990s there were just over 200,000 people who worked for themselves (and who didn't employ others) or who were dependent on them. That amounted to almost 6pc of the population. A fall in absolute numbers and an increase in the population cut that share by a third as of last year. Interestingly, most of the decline took place in the past five years, something that one might not have expected given the common perception that the gig economy is expanding rapidly and that more people have "portfolio" working lives.

If there has been a fall in the population who live in circumstances that might often be considered less than ideal, the other end of the socio-economic spectrum has been swelling fast. That is creating a much more bourgeois society.

The biggest growth has been among the professional classes and their dependants, as illustrated in the graphic. Both the higher and lower professional classes more than doubled in size over two decades. There were just under 1m people in these categories as of last year, making up almost exactly one fifth of the entire population.

The "employers and managers" segment of society has also expanded rapidly, growing by almost 80pc over 20 years. This elite grouping now numbers almost three-quarters of a million people, far more than the numbers of unskilled, semi-skilled and agricultural workers combined. This is very far from the dystopian picture of a polarising society that is often painted.

The census also found a nation in rude health. A tiny of percentage of the population last year describe themselves as in "very bad" and "bad health" - around one in 350 people. The overwhelming majority - 87pc - said they were in "very good" or "good" health.

Interestingly, the proportion of people reporting good/bad levels of health in last year's census recorded almost no change on five years earlier. That there was so little change is surprising given the aging of the population. But even among older age groups there is considerable sprightliness. While the number of people age 85 and over jumped by almost a fifth in the five years to 2016, only a few dozen more described themselves as being in "very bad" health. It has never been a better time to be long of tooth it would seem.

Sunday Indo Business

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