Our nation’s best kept secret: we’re actually a great success
Sarah Carey
THEY say economics is a dismal science. That’s rather unfair, because while things look bleak at the moment, economics is full of positivity. It’s a quirk of human nature that compels us to dwell on the negative. This may seem like the wrong time, but perhaps it’s the right time to observe that, both globally and nationally, we’ve come a long way.
Ireland has a highly progressive tax system, we redistribute income from the wealthy to the poor more than many other countries, we’ve lowered inequality when it has increased in almost all other OECD countries, and while everyone is talking about low pay, there’s a very weak link between low pay and poverty in Ireland.
But almost everything you read and hear tells you the precise opposite.
We are perpetually caught in a narrative of negativity and, at times, falsehood.
Why are we so negative? Well, it’s not just an Irish thing.
During lockdown I’ve been catching up on improving books. One is ‘Factfulness’ by Hans Rosling, the famous Swedish public health doctor. He toured the world for 20 years, asking highly informed audiences, from Davos to the IMF to international politicians and Nobel Laureates, basic questions about the developing world.
These intelligent people were so bad at answering multiple-choice questions about global progress, monkeys would have done better by answering randomly.
The best informed people in the world consistently held beliefs that were true 50 years ago. Yet by every important measure, humanity is phenomenally better off since the 1960s.
Almost every child in the world is vaccinated. In the lowest income countries in the world, 60pc of girls finish primary school. Just 4pc of children die before their fifth birthday – a massive drop from wholescale infant morality. Deaths during war, oil spills, child labour, deaths from disasters, hunger and even ozone depletion have all reduced significantly since the 1960s.
Meanwhile, the share of the Earth’s land surface protected as natural parks, literacy, women’s right to vote, child cancer survival, electricity coverage, protected water sources and cereal yields have significantly increased.
This doesn’t mean there aren’t bad things going on in the world. Of course there are. But it does mean we’ve done an amazing job improving almost everything.
This is important. If people believe that, say, “Africa” is a hopeless case because nothing has changed, they’ll stop trying to help. The fact that millions have been lifted out of extreme poverty shows how effective we have been and how effective we can be. Don’t give up. We can solve global problems. Look what we’ve achieved.
Now back to Ireland. Rosling often refers to a chart showing which countries were in the developing and developed world in 1965. Back then, Ireland was so poor it didn’t even count as a developed nation.
Look at us now – one of the richest countries on Earth. Nevertheless, despite the incredible increase in living standards – I grew up with chilblains, my children don’t – people are rightly concerned about inequality: the gap between the haves and have-nots.
Here, too, Ireland has made great progress. Most OECD countries over the past 30 years have experienced rises in post-tax income inequality. Except for Ireland, which had the largest reduction in inequality.
Success like this, against an international trend, is great news; but advocacy groups, ill-informed commentators and politicians will casually convince you the opposite is the case.
The Central Statistics Office (CSO) tells us that between 2013 and 2018 , both income and net wealth inequality fell while deprivation rates halved.
In 2004, Ireland had the third-highest ‘at risk of poverty’ rate for people under 60 in the EU15. By 2018, Ireland was second-lowest.
You’ll often hear about the working poor, yet people in low-paid employment account for just 5.4pc of those at risk of poverty.
That’s because many people in low-paid employment belong to a household where someone else has a higher paid job.
Forgive my gender stereotyping, but perhaps the husband has a good job and the wife has a part-time job. It doesn’t pay well, but their combined income is good. As a result, there are far more people in low-paid employment in the top 40pc of households than at the bottom. Some people casually assert that many of the 500,000 people in part-time employment would like more hours but, actually, 80pc don’t.
Finally, Exchequer returns issued this week showed that income tax receipts in May were down just 7.8pc on the same month last year. One of the reasons is because pandemic unemployment has hit the lowest paid hardest, but in Ireland, the low-paid pay some of the lowest tax rates in the EU.
None of this good news means there is no bad news. Before tax, we have one of the higher rates of inequality because Ireland has an unusually high number of households where no one has a job. This is our big problem.
The saddest thing is a child born into a family of intergenerational unemployment, where expectation and opportunity have been entirely crushed. Breaking that cycle is the imperative.
Joblessness in this group is so entrenched it requires a lot more than a social welfare policy to tackle it. But the worst thing we can do is give up.
Perhaps if we more readily acknowledge our successes, we’d find the courage and determination to keep trying.
Advocacy groups, commentators and politicians will convince you the opposite is the case