Ireland’s has become richer and more equal over the past 30 years. That’s not what you’d expect if you listen to whole swathes of Irish politics and media, where an entrenched narrative suggests we’re living through something closer to a Thatcherite tide of rising inequality and deepening social cleavages.
The ESRI’s evidence shows that negative narrative is at best wrong and at worst deliberately false.
Both in terms of equality and of overall incomes the outcomes for people living here are getting better, but that’s not true for everyone. The research offers valuable evidence of the types of households that are not benefiting, or are benefiting less, from a rise in prosperity.
That means if the country wants to do something about that too we’re better able to target measures that have a better shot at helping.
So it’s not a case of the ESRI report meaning we should be complacent. But, against the doom-mongers, the research provides good grounds for optimism.
There are two reasons for that: One, very simply, is that things are better than they were and for more of us.
That can’t be taken for granted. Two, the research shows that smart action by government can solve problems.
How do we know that?
For one thing Ireland is becoming a wealthier country as a result of deliberate policy actions.
That includes unfashionable policies such as using attractive tax policy to bring in multinational investment and jobs, as well as fashionable ones including investment in education and infrastructure.
For another thing Ireland is only becoming more equal because of tax policies that aggressively redistribute wealth within the country from those who are doing well financially out of the growing economy to those who are not.
Without the very heavy income tax that average and better-than-average earners here pay then income inequality would have risen sharply. It’s not just broad strokes – the research picks out a remarkable change since the 1990s. Back then the group worst hit by poverty were older people, single older people in particular. The impoverished bachelor or poor widow woman were a fact of life until specific policy actions were taken to change that, including raising pensions and medical access. Older people are now less likely to be living in poverty than the rest of the population.
The country is far from perfect but by setting out the facts the ESRI shows where we are on the right track and where we are not including who is being left out of the rise in prosperity.
So who’s missing out?
Two groups stand out: households where no one works and those headed by a single parent where, again, there’s often no one working outside the home or working full time.
It won’t come as a shock that people who are out of work are poorer but it means, for example, that lifting the minimum wage isn’t going to help in a home where there’s no wage coming in.
It’s also good to see that so-called in-work poverty, where people have jobs but can’t make ends meet, is not the large-scale issue here it’s become in the UK.
That suggests the idea of a so-called universal basic income (UBI), where everyone gets a basic income regardless of work, won’t improve the relative lot of people who need the most support.
So policy should be to target measures that bring people into the workforce including vocational training, if it’s just a skills thing, and more intense individual engagement where personal health or social factors are what is actually locking people out of participation and prosperity.
By the same token, boosting universal benefits won’t specifically help lone parents, who’re effectively locked out of the labour force by poor childcare provision, but better childcare surely will.
The report is good but there are caveats. The biggest is it looks at disposable incomes before housing costs. For a significant cohort of people – mostly younger and living in private rented accommodation – it means they’ll simply not recognise the picture painted.
Overall, though, if you’d been told in 2011, with the ECB and IMF banging down the door, or in 1991, when the Leaving Cert was more likely to be a ticket to a building site in Kentish Town than a computer science degree, that things wouldn’t get this much better, and better for the many not just the few, you’d take that as a good place to build from.