From top: Apple CEO Tim Cook greets Taoiseach Leo Varadkar at an IDA Ireland event in the National Concert Hall last month to mark Apple’s 40 years of investment; Aidan Regan
On RTÉ’ Radio One’s Morning Ireland.
Dr Gavin Jennings asked rhetorically why most people who voted in the general election, and who responded to RTÉ’s exit poll, said “they didn’t believe they benefitted from the country’s economic recovery”.
He told listeners:
“Ireland’s economy is growing richer, faster than most European countries and there are more people working than ever before.”
Dr Jennings then interviewed Associate Professor at University College Dublin’s School of Politics and International Relations Aidan Regan, who writes a column in the Business Post.
Dr Gavin Jennings: “You were writing in the Sunday Business Post, as far back as 2017 that the economic boom was setting up a political timebomb that could stoke a Brexit-style backlash. What did you mean and do you think you were right?”
Aidan Regan: “I mean, broadly speaking, yes. Perhaps not as quick as has appeared to have happened. But what’s meant by that, and of course, I don’t pick the headlines for these things…what’s meant by that is that Ireland is very dependent on one or two key sectors and in particular, and increasingly so, on the ICTC sector, let’s say big tech, right, for your listeners.”
“And that foreign direct investment and big capital for technology companies has been beneficial right? It has ultimately lifted the economy out of the recession. It has generated computer service exports and in that sense has enabled the Government in the austerity years to implement an internal adjustment without effectively crashing the entire economy.
“But, in terms of the kind of job and income growth and productivity gains that comes with that, it’s very narrowly concentrated in a very small section of the workforce.
“And those work in these high-tech, high-income sectors, or more concretely, in these firms, like think about Dublin City here where we are, Google is the biggest…”
Jennings: “Apple, Cork, yeah.”
Regan: “….biggest private employer in the city. You know, if you’re working those companies, of course you don’t feel, you don’t, there never has been a recession. There has been no austerity. But you do obviously feel the effects of under investment in public service infrastructure.
“So the point of that article and the point of that research suggested was ‘look this is not sustainable’. When you have an economy that’s so dependent on one or two key sectors, and the net gains of that increasingly are concentrated, in addition to the fact that there’s a lot of funny money floating around.
“The headline figures look a lot better than they are. It does not provide the fertile ground for political and electoral sustainability.”
Jennings: “There has been a rise in wages nationally. But it’s an uneven rise in wages.”
Regan: “Yes, I mean. So overall in the economy, and particularly in the past couple of years, overall earnings have gone up. People’s wages have improved but some people’s wages have improved by double digit figures on a year-on-year basis for a couple of years.
“When you have that type of wage growth, it obviously creates, that’s to say, puts upward pressure on the price of non-tradeables as you would say, basically housing, rent, restaurants, etc. And so therefore, if you’re earning those higher incomes, in those particular sectors, you’re in a position to, well, afford to pay the cost of living within the city that you would live in.
“But not everybody earns those types of wages.
“So whilst there has been a growth overall in our earnings and wages, it has not been equal. And, effectively, if you look at the income distribution, break it down by earnings. It doesn’t look as healthy as is often assumed.
“I mean the median wage in this country is about €36,000. Gross income, it’s stripped out. If you include earnings and non-earnings, 85 per cent of people in this country have less than €50,000. That’s not a huge amount of money to be able to afford those things in this country which are expensive, housing, health, education.”
Regan: “It’s estimated that 70 per cent of people who work in Google are non-Irish which would suggest that they don’t have a vote in the national elections. The public policy regime in Ireland is increasingly tailored to, you know, the high-tech, higher income earners and that’s understandable which would make sense in most countries, given that those same people would have a vote and they would typically support, in this case, the centre, centre-right parties.
“And that’s what you would expect. But in this country, that’s not the case because these people don’t have a vote. So it’s a very volatile growth regime. It’s a very volatile growth model that’s dependent upon not just inward investment from US multi-nationals but also the free movement of workers from the European Union.”