Thursday 18 January 2018

Stephen Donnelly: Sometimes going to work just doesn't pay

The Government has an opportunity to cut childcare costs and create jobs, writes Stephen Donnelly

Almost half of working parents would be better off on the dole, according to findings in a paper by Professor Richard Tol and his former colleagues in the ESRI.

As public interest in this finding grew last week, the ESRI withdrew the working paper to give it a proper seeing to. Discussion moved to the airwaves, with some claiming the findings as proof that social welfare rates in Ireland are too high. There were accusations that many on welfare are scroungers or fraudsters, and that welfare rates should be cut to make low-paid jobs more attractive. These comments, though, were in the minority. Most people understood that the vast majority on the dole want to work. That until the crisis, they were working.

The Department of Social Protection pointed out that two-thirds of those on welfare receive €188 or less per week. If employment does not pick up quickly, the €188 will fall. Not because it is too high, but because social welfare accounts for about 40 per cent of total government expenditure and that cannot be sustained by any country for very long. But that is a discussion for another day.

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