All for one and one for all

Irish Examiner - - Front Page - Jim Power

The chal­lenge for pol­icy mak­ers is to en­sure that those who do not get the best op­por­tu­ni­ties, who are un­able to work, or who suf­fer from some other dis­ad­van­tage, are helped to the great­est ex­tent pos­si­ble.

Ire­land does this quite well. The coun­try has a very pro­gres­sive tax sys­tem.

Last week I wrote a pretty up­beat piece on the Ir­ish econ­omy, with a strong fo­cus on on­go­ing pos­i­tive trends in two key com­po­nents of the in­dige­nous econ­omy, namely tourism and the agri-food sec­tors.

Pre­dictably, I got a neg­a­tive re­sponse from cer­tain quar­ters, with one in par­tic­u­lar claim­ing that it read like “a PR piece to en­cour­age in­ward in­vest­ment and that as usual there is a cer­tain group in so­ci­ety do­ing well and feel­ing pos­i­tive, but far too many are be­ing left be­hind again”.

Dif­fi­cult to know how to re­spond to that ac­cu­sa­tion with­out com­ing across as cal­lous and cruel.

A point to note is that I did not once men­tion in­ward in­vest­ment and my fo­cus was very much on the do­mes­tic side of the econ­omy and on the growth that is be­ing ex­pe­ri­enced in some key do­mes­tic com­po­nents.

This is dif­fi­cult to ar­gue with.

It is a fact that the real­ity of life in ev­ery de­vel­oped coun­try in the world is that some peo­ple will do bet­ter than oth­ers, due to fac­tors such as ed­u­ca­tional at­tain­ment, so­cial back­ground, the qual­ity of em­ploy­ment, and the will­ing­ness to work hard and take risks.

Those with higher lev­els of ed­u­ca­tional at­tain­ment gen­er­ally tend to get higher qual­ity and bet­ter paid jobs, which in turn is of­ten heav­ily in­flu­enced by so­cial back­ground.

It is also gen­er­ally the case that the harder one is will­ing to work and the more risks one is pre­pared to take, the bet­ter off one will be. I use the term gen­er­ally, as it is ob­vi­ous that this is not al­ways the case.

The chal­lenge for pol­i­cy­mak­ers is to en­sure that those who do not get the best op­por­tu­ni­ties to im­prove them­selves, who are un­able to work, or who suf­fer from some other dis­ad­van­tage are helped to the great­est ex­tent pos­si­ble.

Ire­land does this quite well. The coun­try has a very pro­gres­sive tax sys­tem, in the sense that the more one earns, the more one pays in tax.

The pro­ceeds of tax­a­tion pay­ments are then used to fund a pretty gen­er­ous and pro­gres­sive so­cial pro­tec­tion sys­tem, and also to fund pub­lic ser­vices.

Peo­ple can moan for­ever about the nature of our econ­omy and our so­ci­ety, but the truth is that if we do not have eco­nomic growth and if we do not have peo­ple in so­ci­ety do­ing well, the re­sources to fund so­cial expenditure and pub­lic ser­vices will not be gen­er­ated.

I did not — and would not — ar­gue for one mo­ment that Ire­land does not still have many prob­lems, it does. The lack of suf­fi­cient hous­ing and un­der-funded health, education, and law and or­der im­me­di­ately spring to mind.

It is a fact that hav­ing ex­pe­ri­enced the most sig­nif­i­cant eco­nomic shock in gen­er­a­tions back in 2007, there are still sig­nif­i­cant legacy is­sues to be ad­dressed, but at least with the strong mo­men­tum in the econ­omy, we will be given the op­por­tu­nity to ad­dress those is­sues.

With­out growth, very lit­tle would be pos­si­ble.

Thank­fully, as I pointed out last week, we are see­ing a lot of growth com­ing through and the lat­est data re­leases show clearly that the good news is con­tin­u­ing to pour forth.

This week, the IDA sug­gested that it has had a very strong first half and that the in­vest­ments al­ready ap­proved so far this year will lead to the cre­ation of over 11,300 jobs, which is marginally ahead of the first half of last year.

The IDA is con­tin­u­ing to at­tract strong over­seas in­ter­est in its in­vest­ment propo­si­tion, and that is un­am­bigu­ously good news.

Of course, there are chal­lenges and risks in­volved here, but that is the nature of eco­nomic and busi­ness life. Man­ag­ing the risks in a pru­dent man­ner is key.

It is not cor­rect to sug­gest that a ris­ing tide will lift all boats, but a ris­ing tide is still prefer­able to a fall­ing one.

I firmly be­lieve that the best thing that is cur­rently hap­pen­ing in the econ­omy re­lates to labour mar­ket de­vel­op­ments.

The level of un­em­ploy­ment de­clined by 15,600 in the 12-month pe­riod to May and the un­em­ploy­ment rate has fallen to 5.8% of the labour force.

Since the low point of the labour mar­ket in Jan­uary 2012, the num­ber of peo­ple un­em­ployed has de­clined by 217,300 from 356,300 to 139,000.

Of course, we can ar­gue with the qual­ity of some of the em­ploy­ment be­ing cre­ated, but the trend should be wel­comed by any sen­si­ble per­son with an open mind.

“It’s dif­fi­cult to know how to re­spond to that ac­cu­sa­tion with­out com­ing across as cal­lous and cruel

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