Michael Taft: Reversing Into Crisis

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From top left to right: Minister for Finance Paschal Donohoe, Minister for Public Expenditure and Reform Michael McGrath, and Tanaiste and Minister for Enterprise, Trade and Employment Leo Varadkar; Michael Taft

Back in July the Tánaiste Leo Varadkar warned of a coming economic crisis that could be ‘very divisive’:

‘ . . . it’s a very serious economic crisis and one that’s very unequal . . . The country was very united during the pandemic. The economic crisis that is coming could be very divisive.’

Unknown to us (at least based on national statistics) was that a serious crisis was emerging in 2019. The pandemic crisis is likely to give it legs and if we don’t act, it could run away from us.

The CSO has released its Survey of Income and Living Conditions (SILC) focused on the issue of enforced deprivation. According to the CSO, the enforced deprivation rate measures the proportion of households that are considered to be marginalised or deprived because they cannot afford goods and services which are considered to be the norm for other people in society.

Enforced deprivation is where a household experiences two or more of the following eleven deprivation items:

* Without heating at some stage in the last year

* Unable to afford a morning, afternoon or evening out in last fortnight

* Unable to afford two pairs of strong shoes

* Unable to afford a roast or an equivalent once a week

* Unable to afford a meal with meat, chicken or fish every second day

* Unable to afford new (not second-hand) clothes

* Unable to afford a warm waterproof coat

* Unable to afford to keep the home adequately warm

* Unable to afford to replace any worn out furniture

* Unable to afford to have family or friends for a drink or a meal once a month

  • Unable to afford to buy presents for family or friends at least once a year

During the last crisis, 30 percent of the population experienced enforced deprivation. Since that peak in 2013, the rate steadily declined.

Until last year when the enforced deprivation rate suddenly and unexpectedly rose. In 2019, unemployment fell and job numbers increased along with wages and incomes. Yet deprivation rose. Even before the crisis, something in the social structure was wrong.

Those most at risk of deprivation are social housing tenants, those who can’t work because of illness or disability, and single parents. The former two categories saw a sizeable increase in 2019, while close to half of single parents suffer multiple deprivation experiences.
We tend to assume that deprivation is associated with being out of work. That would be a mistake.

Nearly one-in-eight people in work are categorised as deprived. 20 percent of households with one person working are deprived. More surprisingly (and depressingly), even where there are two people at work in the household, more than one-in-ten suffer deprivation.

Clearly, in an economy with high levels of precarious working conditions and low pay, having a job is not a ticket out of deprivation and poverty.

And for children the situation is looking even grimmer. In 2018, the deprivation rate for children (under-18s) was 19.7 percent. It rose last year to 23.3 percent.

This is not only an indictment that nearly one-in-four children in the state suffers enforced deprivation; it also undermines future growth and prosperity for these households and society at large. And in one final stat twist, 30 percent of the population still experience at least one enforced deprivation experience.

And all this in the year prior to the pandemic, during a year of growth and expansion. This raises two questions:

Will the pandemic accelerate these trends? As the Tánaiste put it – will it accelerate inequality and divisiveness?  And if the answer to the first question is yes, then what are the policies that we need to put in place starting now in Budget 2021?

For we will need to do something. If we go back to ‘normal’, we’re heading back into rising deprivation.

Michael Taft is a researcher for SIPTU and author of the political economy blog, Notes on the Front. Michael’s regular column resumes next Tuesday.

Rollingnews

16 thoughts on “Michael Taft: Reversing Into Crisis

  1. Joe Small

    Why would the numbers of people who can’t work because of an illness or disability show “a sizeable increase in 2019”?

    “We tend to assume that deprivation is associated with being out of work. That would be a mistake.”
    Yes, there are many “working poor” out there but employment is the single best means of escaping poverty. Raising social welfare rates dramatically is not a sustainable means of reducing poverty for large numbers of people.

    1. George

      Just imagine the overtime bill for the public sector the massive amounts Earned by people employed around covid. 19

      Then see the victims of closing down the economy

      Many winners but many losers who unfortunately might loose their homes

      Many businesses will not survive this winter
      As for Christmas it truly will be a disaster as the weather changes and hospitality businesses are severely restricted in the numbers Allowed in
      Imagine no works do’s that in December are vital to the hospitality sector to pull them through and of course that means no VAT paid to the exchechor

      The worst will come October to January as we see thousands upon thousands laid off Just past Christmas just when the bills come in and the first payment on that new car that was bought with a three month period before the first payment is made plus mortgage interest free payment is made plus the capital payment

      I see a massive headache

      1. George

        Ah but that depends on weather they have the money or ability to get the money needed

        The biggest thing is not being mentioned and it’s our fishing industry thrown to the wolves

        All those boats from the UKs fishing grounds are going to be moving into our fishing grounds
        As the UK is not playing ball and will not

  2. Gabby

    That CSO list of Enforced Household Deprivation items is interesting. It is stated that marginalised households experienced two or more on the list. I am aware that marginalised households in First World countries are, for all the family misery and dysfunctions being felt, different from marginalised households in the Third World.

    These items in the CSO list I would regard as being on a level similar to Third World living standards, in the sense that for persons to physically survive in our climate they are necessities:
    – Without heating at some stage in the last year
    – Unable to afford a roast or an equivalent once a week
    – Unable to afford a warm waterproof coat
    – Unable to afford to keep the home adequately warm
    These items I would regard as deprivation relative to First World general living standards; but relative comfort relative to Third World low-based living standards:
    – Unable to afford two pairs of strong shoes
    – Unable to afford new (not second-hand) clothes
    – Unable to afford to have family or friends for a drink or a meal once a month
    – Unable to afford a morning, afternoon or evening out in last fortnight
    (These last two items concerning limitation on socialising do not pertain to many First World households, where lone individuals may have no friends to socialise with or individuals just don’t want to be sociable.)
    All poverty is relative. In advanced consumer societies (like Ireland) households unable to participate in the consumer momentum feel depressingly marginal. Children feel ashamed at school when comparing notes with other children. Pressure on marginal parents is enormous, especially on birthdays, religious coming of age moments and Christmas or other festivals like Eid.

    There is one item I am surprised to see not listed by the CSO – the inability of First World parents to buy school books, uniforms and leather shoes for their schoolgoing children.

    1. Janet, dreams of big guns

      has anyone seen the documentary that shows all the British kids surviving on food bank rations, it would break your heart, Channel 4 I think.

      1. George

        A bit like ours also the family hubs
        Maybe watch a country with no god about Mannix Flynn and his family
        It makes kids using food banks like utopia

    2. Cian

      You didn’t mention the one I personally find most interesting: “the inability to afford to replace any worn out furniture “. It was the most commonly experienced item of deprivation in 2019. You list for developed/underdeveloped countries is reflected in the order.

      Unable to afford to replace any worn out furniture 18.1%
      Unable to afford to have family or friends for a drink or meal once a month 13.6%
      Unable to afford a morning, afternoon or evening out in the last fortnight 11.7%
      Without heating at some stage in the last year 8.6%
      Unable to afford new (not second-hand) clothes 7.7%
      Unable to afford to keep the home adequately warm 4.9%
      Unable to afford a roast once a week 4.5%
      Unable to afford to buy presents for family or friends at least once a year 4.3%
      Unable to afford two pairs of strong shoes 3.1%
      Unable to afford a meal with meat, chicken or fish every second day 1.7%
      Unable to afford a warm waterproof coat 1.4%

  3. Rob_G

    Giving that things are seemingly so bad, can we really afford to pay public servants their 8th increase since 2018?

    1. curmudgeon

      According to Taft yes, also according to Taft the govt should magic up even more jobs and give them to unemployed young people. All paid for by borrowing even more money! Economist David McWilliams pointed out in his podcast a few weeks back that jobs area only created when a product or service is successful and the only exception to this is in public administration since they get to spend other peoples money ansd claim there job is comparable to private industry. The lie on which benchmarking was founded.

    2. Joe Small

      If your employer cuts your pay substantially by about 15% and then, over a decade,, slowly increases your pay while keeping it below what it used to be, does that still count at a pay increase?

      1. Rob_G

        If the coming coming recession is going to be (at least) as bad as the previous one, when public sector workers had their salaries cut, is it really justified to be giving pay increases this time around?

  4. Kate

    23.3 percent of children in deprivation is actually shocking . It disgusts me to see TD’s getting 750euro for a mobile phone on top of their very generous wages when children are going hungry.

    1. AKA Frilly Keane

      Using stats and numerical analysis makes it easier to live with

      Pictures of kids in the line at a food bank stings but they are easier to turn away from

      One of the real long term casualties of the lockdown was the loss of Breakfast Clubs in schools
      For many –
      too many, that was their own source of hot meals
      And provided without the humiliation of lining up on a public street in their uniform

      The other impact the lockdown had but doesn’t get analysed into numbers, but will leave permanent scars on those same children
      Is that for many, school was their safe place

      We will never really know the damage our management of this Pandemic did
      Stats and numerical analysis are the easy way out for Politicans imo
      They dehumanise the real cost of their decisions, thus
      Making them easier to live with

      Measuring the financial cost to anything is easy
      Yet its the non financial cost is the one with the biggest price

      1. Joe Small

        “Using stats and numerical analysis makes it easier to live with”

        It also makes it easier to shape a coherent policy response to counteract child poverty.

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