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With 800,000 in poverty, 700,000 on healthcare waiting lists and 10,000 homeless, its time to tackle Ireland's inequality
Ireland is a relatively rich country – one of the five richest countries in the world in 2016 according to Fortune Magazine, yet we have a pervasive inequality problem. Ireland’s market inequality (before taxes and transfers) remains one of the highest in the OECD and has risen since the economic crash. Ireland’s national inequality (after taxes and transfers) has, however reduced since the Financial Crisis to near average among rich countries.
Increased globalisation, which pits the skills and resources of wealthy countries against those of developing nations, financialisation and economic policies based on cutting the taxes of the rich have all contributed to the reduction in the share of income going to labour from 60% in the 1990s to 33.9% in 2018 – well below average.
Inequality has consequences for all of society.
- It leads to lower and more unstable economic growth.
- It contributes to rising household debt.
- It distorts the housing market and contributes to ghettoisation of economically deprived areas.
- It inhibits social and economic mobility.
- It is a major factor in the persistent poverty experienced by almost 800,000 people in Ireland today.
Each year, Social Justice Ireland publishes our Sustainable Progress Index, a comparative study of Ireland and our EU15 peers’ progress towards the Sustainable Development Goals (SDGs). In our 2018 study, Ireland ranked 11th out of 15. For a country that was instrumental in the development of the SDGs, this simply is not good enough.
Our latest policy briefing makes four policy suggestions to reduce Ireland’s inequality:
1. Improve information and transparency
Information on inequality in Ireland, especially incomes and wealth, is inadequate and less than what is produced in other European countries. This is especially true on the important issue of intergenerational income mobility. Furthermore, much more research is needed on the mechanisms by which inequality influences social outcomes.
2. Strengthen worker protections
Ireland’s marked inequality is the result of a lack of worker protections and the unhampered power of corporations, especially foreign multinationals. Greater support for workers (unions, collective bargaining) and increased social protection spending are required.in
3. Tackle tax avoidance
Most, if not all, large accumulations of wealth are supported and facilitated by the use of state investment and/or power. Often this wealth, in effect, is the privatisation of the benefits of social investments, invention and innovations.
The great technological developments of the second half of the 20th century (microcomputer, GPS and Internet) all started as government research projects. Great financial fortunes often start with changes in government regulations that benefit one group, often at the expense of all others. Considerable “wealth” is earned in Ireland in the “tax avoidance” industry. Government should introduce a minimum effective corporate tax rate; remove the tax refund element for unused research and development tax credits; introduce taxes on emply houses and a site value tax on underdeveloped land.
4. Do more to promote gender equality
Government should implement a system of gender proofing for the annual Budget, and commit the resources needed to develop a childcare infrastructure equivalent to those of our European peers. While huge strides have been made in recent decades in terms of female labour force participation, female participation is still at 55 per cent, compared to 68 per cent for men. While Ireland compares reasonably well with the rest of the EU in male participation, female participation is well below the EU average.
To read our full Inequality Policy Briefing, click here.
To read our 2018 Sustainable Progress Index, click here.