In this NERI Blog and its associated Long-Read No. 9, NERI Co-director Dr. Tom McDonnell discusses economic security and inequality, as well as income adequacy and well-being.
Read the latest NERI Long-Read here.
A general election is fast approaching in the Republic of Ireland and the new Labour government in the UK is currently considering its first budget. With policies potentially in flux it seems an opportune time to consider how we might want our economies to develop over the next generation.
A motion carried at the ICTU Biennial Delegate Conference in Kilkenny last year called for a debate throughout the trade union movement (North and South) to help develop a comprehensive long-term model of economic development for both economies on the Island of Ireland. This model is to be agreed at the next ICTU Biennial Conference in 2025.
The NERI was asked to assist in this process and has identified four mutually reinforcing pillars to frame this work. These are:
- A Productive and high-value economy;
- Participation and good or better jobs;
- Economic Security and
- Economic dynamism, resilience and sustainability.
The latest in the NERI’s series of policy long-reads discusses the 3rd of these pillars and it will be supplemented later this year by policy long-reads on each of the other three pillars.
Our purpose is to describe the key elements of a sustainable, prosperous and inclusive economy, and to identify some of the main policy levers and achievable reforms. Policy must seek to avoid the booms and busts which have caused such huge pain in the past. Policy should also seek to protect people from the ups and downs of the international economy and ruptures form new technologies while simultaneously recognising that engagement and adoption is critical.
There are a number of challenges for us to consider. How do we ensure economic security throughout people’s lives? How do we reduce economic inequality? How do we minimise poverty and deprivation and how do we attain a high level of economic well-being for all?
Why will we need to change in the future? Economies themselves are constantly in flux and they change for many reasons. There are economy-wide technological disruptions like the steam engine, electricity, and the microchip that have transformed economies utterly. Alongside general-purpose technologies such as these has been an ongoing stream of other minor and major process, product, and service innovations that have, in their various and complex ways, shifted the workings and structure of the economy. Artificial Intelligence in one or more forms may prove to be a transformative technology over the next generation.
In addition, changes in taste, fashion, sentiment, and political decisions and direction will all affect particular industries and regions in uncertain ways. The global mission to tackle the climate and biodiversity crises will transform economies and generate even more change than usual in the decades ahead.
People will lose their jobs and existing jobs will change. We know that change is coming even if we cannot predict exactly what that change will look like. We will need safeguards to prevent people and regions from falling off the economic cliff. Laissez faire policies are not going to protect or resuscitate falling behind households and regions.
And yet we know that we can’t simply stand still. If we don’t embrace economic change we will fall behind and at best we will see our living standards stagnate. So, what we want is economic disruption that complements workers not disruption that substitutes for them. We also need to ensure that the way we deal with change is guided by just transition principles. This means that real income protections and new educational and job opportunities are made available for those adversely affected.
Already our current economic and social model is failing too many people and with this in mind the long-read proposes a set of policy reforms that will facilitate a more secure economy. Read the proposals here.
The long-read is simply a discussion document. Comments are welcome and can be sent to [email protected]