Top 10% have gained most since the 1980s as income gap widens between these and all others in society

Posted on Sunday, 30 January 2011

New research published by Social Justice Ireland shows that, while poverty in Ireland is high, Government policies since 1987 have been increasing the income of the richest ten per cent of households and widening the gap between these and the rest of society. 

Social Justice Ireland has called on all political parties participating in the forthcoming General Election to spell out how they intend to reverse this process in the years immediately ahead.

In its latest Policy Briefing, which addresses the issue of ‘Poverty and Income Distribution’, Social Justice Ireland shows that:

  • Government policies over the past two decades have moved resources towards the top ten per cent of households in the income distribution. 
  • The top 10 per cent of Irish households receive almost a quarter (24.48%) of total disposable income - an increase of 1.34% on the situation in 1987. Disposable income is the amount of money households have to spend after they have received employment/pension income, paid all their taxes and received any welfare entitlements. (cf. page 6 of the Policy Briefing).

When the income distribution is broken down into deciles (i.e. 10% segments) we see that:

  • The bottom decile receives 2.28% of all disposable income.
  • Collectively, the poorest 50 per cent of households received a very similar share (25.25%) to the top 10% (24.48%).
  • Overall the share of the top 10% is nearly 11 times the share of the bottom 10%.
  • Two deciles saw their share of the total income distribution increase since the late 1980s - the bottom decile and the top decile. However, the change for the former is small (+0.11%) while the change for the latter is more notable (+1.34%).
  • All other deciles saw a decrease in their share of the national income distribution since the 1980s.
  • This means that the gap between the top 10% of households and all the rest of society has widened over these years.

The EU/IMF Bailout and the Four-Year Recovery Plan are continuing the process of supporting the better-off and seem set to produce a dramatic increase in poverty and social exclusion. Welfare rates are being reduced, services are being cut and charges are being introduced and/or increased.

Resources are being taken from the poor to bailout gambling bankers and senior bondholders and to increase the incomes of the top 10%. This process of dispossessing poor people by appropriating their resources to pay for activities they had no hand, act or part in may be legal but it is deeply unjust and unfair.

Other issues addressed in this latest analysis from Social Justice Ireland show that:

  • There are more than 620,000 people (14.1% of the population) at risk of poverty in Ireland today i.e. their income is equivalent to less than €11,600 a year for a single person or €27,000 for a family of four. (cf. p. 3)
  • The number at risk of poverty would be more than three times higher if it weren’t for social welfare payments (p. 3).
  • Over 140,000 people are long-term unemployed - the highest since the late 1980s (cf. p.5).
  • The risk of poverty in rural Ireland is 6% higher than in urban Ireland (17.8% and 11.8% - cf. p.5).

Proposals from Social Justice Ireland:

  • The EU/IMF and the Government’s approach to fiscal adjustment (i.e. emphasising cuts rather than broadening the tax base) is both unjust and unnecessary in a country with one of the lowest total tax-takes in the developed world. 
  • The human rights of poor people must be particularly protected in times of economic uncertainty.

 ‘Poverty and Income Distribution’, Social Justice Ireland full Policy Briefing can be accessed here