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Address to the ICTU Biennial Conference 2015

Posted on July 07, 2015 by Tom Healy

President, I would like to thank the General Secretary and the Executive Council for inviting me to introduce this debate on the economy. The motions concern more than just the key areas of employment, wages, pensions and public finances. An economy that works is one that enables workers, their families and communities to not only survive but flourish and prosper in the widest sense that no measure of GDP or income can adequately capture.

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Living Wage 2015 €11.50 per hour

Posted on July 06, 2015 by Micheál Collins

The 2015 Living Wage has been calculated by the Living Wage Technical Group. It is €11.50 per hour. The new figure represents an increase of 5c per hour over the 2014 rate (€11.45). The increase has been driven by changes in the cost of living and changes in the taxation system over the past year.

The Republic of Ireland Living Wage was established in 2014 and is part of a growing international set of similar figures which reflect a belief across societies that individuals working full-time should be able to earn enough income to enjoy a decent standard of living.

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Posted in: IncomeLiving wage

Emigration has taken its toll

Posted on July 03, 2015 by Tom Healy

Tom Healy, Director NERI

Significant progress has been made in reducing the overall rate of unemployment in the Republic of Ireland since 2012 when it peaked at one in seven in  the workforce. Still, the overall rate remains close to one in ten and is double that in the case of persons under the age of 26. As in previous Irish recessions, outward migration has acted as a very significant ‘safety valve’ in facilitating the movement of a large number of young persons to other countries to take up work there.  Just how many have left and what impact would their staying have had on unemployment, government finances and living standards here?  There has been a striking absence of public debate or research on these important questions. Still more noticeable has been the absence of debate about the decision to reduce the rate of job seeker allowance to new entrants to the Live Register under the age of 26. Against a context of pre-election budgetary and labour market ‘pay back’ it seems that young people join lone parents, migrants, homeless and other groups as the voiceless when it comes to determining public policy priorities.

First, it is useful to review some facts (all available from the CSO online database):

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Whose on the Minimum Wage?

Posted on July 02, 2015 by Micheál Collins

Micheal Collins profile

A new NERI research paper estimates the number of workers on the minimum wage and further profiles these workers by gender, by the sector they work in and by their employment status (full-time, part-time, permanent, temporary etc). The data also allows an examination of the household/family circumstances of workers on the Minimum Wage.

The key findings from the paper are:

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Posted in: GenderIncomeInequalityJobsLabour costsWages

First principle: Do no harm

Posted on June 27, 2015 by Tom Healy

Tom Healy, Director NERI

On Thursday of this week just as half a million children at primary school begin their summer holidays many thousands of children in families with one parent face a drop in family income - a sharp drop in some cases by as much as €140 per week.  Just at a time when working parents are under severe pressure to find chilcare for their children after school their incomes will be cut sharply.  The end of austerity in Ireland has been greatly exaggerated. Parenting can be a challenging undertaking. Parenting alone or mainly alone – for whatever reason – can be particularly challenging. A living income, social support and access to help are vital to help parents and children avoid poverty.  Economists and statisticians need to be careful when describing the nature of work and household composition.

References to ‘jobless households’ or ‘activation measures’ betray an underlying set of assumptions or values about (a) the nature of work and (b) value of different kinds of work. Add to this a widespread (but by no means universal) prejudice that lone parents (typically mothers) are in some way to blame and need to be 'encouraged' to enter the workforce and avoid 'welfare dependency'.  In Ireland due to the restraints of political correctness such prejudices are rarely articulated explicitly. In the UK such restraints have been thrown to the winds under the general heading of 'welfare reform'.

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Tax Increases Since the Bailout: the facts

Posted on June 26, 2015 by Micheál Collins

The Taoiseach Enda Kenny, speaking in Brussels on Thursday, mentioned the following in the context of the ongoing negotiations regarding a debt/bailout deal for Greece:

“I pointed out at the EPP that in Ireland’s case we did not increase income tax; we did not increase VAT; we did not increase PRSI but we put up alternatives to those measures that were proposed in order to keep a pro-growth policy and to make our country competitive and to provide jobs for our people.”

His comments seem intent on highlighting the Irish-way of doing a bailout – but his memory of that bailout, including some of the adjustments that the Government he leads has delivered, is simply incorrect.

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Posted in: Taxation

Solidarity key to avoiding a European tragedy

Posted on June 18, 2015 by Tom Healy

Tom Healy, Director NERI

Monday 22 June 2015. Krinein is a Greek word which means 'to sift or to separate'.  It gives rise to the word 'crisis'.   Greece has always been at the heart of the European continent. Culturally, linguistically and philosophically ancient Greek civilisation has helped shape who we are as Europeans.  Like so many other countries in Europe, Greece has had a troubled history over the last century marked by wars, a bloody and prolonged civil war (1946-49), a period of military dictatorship (1967-1974) and since then a period of democracy and relative stability together with some uneven economic progress. Politically, Greece stands at an important gateway in Europe – a member of the European Union (since 1981) and of the North Atlantic Treaty Organisation (NATO) – close to the Balkans, on the receiving end of refugees from North Africa and never far from the cauldron of the Middle East.

A presently troubled Greek economy and political situation is a matter of special interest to both the United States of America and Russia where competition for spheres of influence and cooperation is evident. The current impasse in Greece concerning its public debt and the situation involving the European institutions, the International Monetary Fund and the Greek Government is threatening the very cohesion of the Eurozone and possibly the European Union itself.

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Posted in: Macroeconomics

TTIP in trouble

Posted on June 12, 2015 by Tom Healy

Last week an unprecedented even took place in the European Parliament. Following months of complex negotiation between the European Commission – on behalf of European Union Member States – and the United States of America  a resolution to the Parliament to be discussed and voted upon last Wednesday was postponed and the matter was referred back to the Trade Committee. This concerns the Transatlantic Trade and Investment Partnership (TTIP) a brief summary of which is provided at the very end of this blog. If you have followed the international debate about TTIP you probably belong to one of four groups:

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Posted in: InequalityInvestmentMacroeconomics

Cutting back & going without – deprivation and the recession

Posted on June 11, 2015 by Micheál Collins

The scale of Ireland’s recent recession was such that its impact was unavoidable for almost all of society. Whether through job losses, pay reductions, welfare reductions, cuts to services or new taxes and charges, its impact touched almost every household. Income (disposable), just one measure, shows a more than 10.5% fall between 2007 and 2013. However, the story of how people coped with such dramatic changes in living standards is more complex than just changes in income.

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Posted in: IncomeInequality

Wages on the rise after 7 years of stagnation.

Posted on June 05, 2015 by Tom Healy

Tom Healy, Director NERI

As data filter through every three months from the Central Statistics Office it is clear that wages are recovering slowly across most sectors of the economy. The adjustment of the labour market over a period of 7 to 8 years since the crash of 2008 is, and will be, the subject of research – did wages fall everywhere? Why did wages increase during the recession in many successful exporting firms? What impact did wages have on the length of the recession in domestic demand? How did wages compare to other trading countries? The picture is complicated because many factors impact on company performance as well as the level of domestic demand (the total of consumption, investment and government spending). Clearly, exports helped pull Ireland out of recession. Yet, the decline in wages was greatest in what economists call ‘non-trading’ sectors of the economy. The simplistic narrative runs like this: ‘we paid ourselves too much before the crash; we took the pain of previous transgressions; we pulled out because we took the hard decisions to reduce pay; and now we are example to everyone in Europe and beyond’. That narrative does not hold up to full critical scrutiny.

Chart 1 tracks the level of Average Weekly Earnings (seasonally adjusted) from the start of 2008 up to the first quarter of this year. It shows a gradual decline in wages from a high point of the final quarter of 2008 to reach a floor in the third quarter of last year. Since last Autumn average weekly earnings (AWE) have increased by 2.3% on average (or 4.6% on an annual basis if the quarterly rates of growth were sustained). Because prices – as measured by the CSO – have been falling since the middle of last year, this nominal increase in wages is the equivalent of 3.5% over the six month period from October 2014 to March 2015 suggesting an annualised rate of close to 7%. Care is needed in jumping to conclusions because quarterly statistical estimates are subject to revision as well as statistical quirks (as we have seen in relation to employment data in recent times). Also, the picture is more complicated once we start unpacking headline average figures to look at specific sectors and occupations.

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