This day last week a letter posted in Connacht came into the Irish Independent addressed to me. Its contents were disturbing. It describes the “new poor”– people with good jobs in our country who can’t make ends meet and who are advised by people working for the State that they’d be better off working part-time and taking benefits. I will transcribe it for you.
Dear David,
I think you may be interested in my story. I am a stay-at-home mother with six children and my husband is a PAYE public sector worker earning a salary of €88,000.
Yesterday, after having forked out €100 to the GP to see two of the children on two separate occasions, I went to the Citizens Advice Bureau to enquire about a GP card only to be told that not only are we eligible for one but that we are also entitled to Family Income Support.
The adviser looked at me in the eye and told me directly: “You people are the new poor.”
He told me that it is costing my husband to go to work. To my shock he then asked me whether my husband could go on a three-day-week so that he could claim the other two days and be just as well off and hence get grants for our two children to go to college. He was most helpful and also informed me that if we were ever stuck for a few bob we could always “touch” the SVP (St Vincent de Paul).
I have to say I left the meeting feeling like I wanted to emigrate!
The letter went on to say that her husband was extremely well educated and so was she. She was so shocked because, as she said herself, she thought he had a “good job” and here was someone working for the Department of Social Welfare advising him to skive off in order to be better off.
This is an extraordinary place to arrive at for a country, where the hardworking are told to slacken up and not only would they not suffer, but they’d be actually better off.
This letter could have come from many thousands of people all over the country. Take what appears to be a good wage, indeed a very good wage, then throw in 46pc income tax with all the deductions at source, including things like VHI, then what’s left goes to childcare, commuting, mortgages and the everyday bills that everyone, or at least working people with kids, have to pay. There is very little left at the end of the month.
Now imagine that we have constructed a system whereby the individual worker knows that he or she would be better off working Monday to Wednesday and taking Thursday and Friday off, claiming benefits and giving the welfare cash to their kids.
Yet this is the system we have created. It is not that people are bad or lazy, they are just responding to the incentives they see in front of them. If you give people incentives to behave in a certain way and they do, who is to blame – the people or the architects of the system?
But what if there are no architects? What if bits have been added on to the structure here and there on the whim of some political expedience or other? Think about constructing a building where there was no overall plan, but one piece of contradictory engineering layered over another bit and we went on like that all the time marvelling at how the thing stood up at all, until one day it fell down.
The nexus where the Irish PAYE system meets the Irish welfare system is not too dissimilar. Years of politicians paying off each constituency in the Noughties with the “rented” proceeds of a transient credit boom has left us with a mishmash of good intentions, promises which can’t be rolled back electorally and a country that can’t pay its way as we rob Peter to pay Paul and hope some foreigner will lend us the shortfall.
This leads to a perversion in the way the economy works because every good intention needs to be paid for and this implies raising taxes on someone or something.
This leads to what could be called “benefit creep” as the cut-off point for qualifying for a benefit creeps up to meet the falling disposable income which equally, could be called “wage shrink”, as income taxes rise. In time, these both meet and a woman goes to a Citizens Advice Bureau and finds out, to her shock, that her hard-working husband might be better off on a three-day week.
This kicks off a conversation in the kitchen, when the children are in bed, one of those “what is it all for/who is the bigger fool?” conversations which thousands of ordinary people have every night when they are not anaesthetised by the latest box set, the Champions League, a bottle of Blossom Hill or the weather.
Once these conversations start, it is very hard to stop them – unless of course you suppress them.
Last year, a paper written by the ESRI, the Government-funded think tank, was rapidly withdrawn with Orwellian haste when it claimed that: “The cost of working in Ireland is around €140 per week, or €7,000 annually, for people without children – which increases to €9,000 per year for a family with children.”
The report suggested that around 15pc of people without children and 44pc of people with children would be better off not working given the costs involved with working including transport, childcare costs (which are among the most expensive in Europe) and clothing.
It was withdrawn immediately, God knows why, your guess is a good as mine. Maybe because it dared to say what many other ordinary citizens have the cop-on to know.
At a certain point, the marriage of benefit creep and wage shrink produces an unholy matrimony where people wonder what’s the point of working.
The only solution is divorce. Either benefits go one way and wages the other or the union is doomed to failure. The choice over which way to go is the biggest political choice of the next few years.
David McWilliams writes daily on international economics and finance at www.globalmacro360.com
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A well presented arguement for not working and absolutely correct.
Leaders need to get tough and honest with themselves and honest with their electorate. Benefits are too high for too many people and this causes a great overhead on the nations funds. The Unemployment benefit in Ireland is much higher than in the N.Ireland, and is there any reason why it is so high in comparison. With higher benefits feeding higher taxes everyone is loosing. Where does it all stop. Who will lead with the honesty? Reforme Alliance??
Welcome to the nanny state! I had a conversation with a friend of mine whose daughter became pregnant at 18, apart from the concern he had over the young age his daughter was to be come a mother he was positively angry at how her life would not develop. The girl and her 18 your old boyfriend would be entitled to a house, earn a host of social welfare protections and have a household income of nearly 45k a year. I am not sure if the math is correct but his concern was that they would be now trapped by… Read more »
The thing that warps the whole arguement it the rent allowance to people on the dole to private homes, which helps keep rent levels high and thus house prices high. If this was taken away then being on the dole would be a whole less attractive (not that it would make a difference because there are no jobs going anyway and this seems to be skipped over by all the above posters), but on the flip side this would have a knock on with the price of housing. Also why do we always compare ireland with the UK?, we should… Read more »
It is a blatant discrimmination against workers and unequal.Meanwhile surplus amounts of politicians will feather the “so called impoverished in society” nests.Which other country would tolerate penalising workers?for being a worker.Do not think there are many who do.Meanwhile the silent government continue to turn a blind eye at the strugging working classes.Something has to give soon!
Off topic, I know…
€50 for a GP appointment says it all. In Belgium, I pay €22 per visit.
No surprises here, I was back in Ireland between 1998 and 2003. The back to Education Allowance combined with ‘cheques’ from Brussels and the ability to work a few hours a week without effecting my benefits pretty much kept me out of the workforce for the duration of my stay. Simple maths demonstrated the futility of work. I finished my exams for my degree in June 2003 and left the following week. Payack for being screwed to the ground in the eighties when Haughey was saying we should tighten our belts while he was having his Charvet Shirts flown by… Read more »
There is no factual basis for this article whatsoever. Can anyone write to you with their personal stories, to be used as a basis for an article with absolutely no checking of facts whatsoever? Extremely poor journalism. Errors include: There is no such thing as the Citizens Advice Bureau, and if there was, its’ employees would not work for the Department of Social Welfare. Someone earning that salary (even pro rata for a three day week) will not be allowed to claim for Social Welfare entitlements such as a medical card. One cannot simply decide they want to work a… Read more »
When I red the article the first thing that came to mind was that it is a fictional letter sent to David and it should be checked for integrity. I guess first of all it is the Citizen Information Board and not the Citizens Advice Bureau. OK, that is fine. I find it strange that an advisor at the Citizen Information Board brands a family with a Public Sector position and a salary of €88,000 as “the new poor”. The advisor should not be in a position to qualify anyone like that – they should only advise as that is… Read more »
You do have to laugh at those ‘hard workers’ who complain about dole spongers not realising they and all of us are being screwed by a fraudulent ponzi monetary model based on theft, it’s like haranguing a goldfish for nibbling a bread crumb while unaware of the school of killer whales chomping on your legs. I suppose their ignorance serves a useful purpose for the REAL spongers. A friend works in the Social Welfare system and despises the Daily Mail’s etc concocted ‘living it large’ portrayals of life on the dole. It’s a fabrication. Those living ‘large’ on the dole… Read more »
This is bizaare, Having just been made redundant in december 2013 and given the statutory redundancy at that, my experience on job seekers allowance has not been the holiday that the Citizen Information Board and David seems to indicate one can enjoy on welfare. I have to say, I hate it. I hate getting welfare. I have avoided the dole office, (what does dole even mean?), since 2006, (this is my second redundancy in that period), and for me it is excruciating to be reliant on the state again for money at this stage in my life. I could only… Read more »
I’m operating on the basis that by ten years time there will be no Social Welfare and State Pension in place. So rather than working every hour humanly possible for no future return I’m doing the complete opposite, working the minimum amount of hours financially practical, and with the remainder I’m enjoying the HERE & NOW.
To re-quote myself from a previous comment:
Only Fools And Horses Work In A Kleptocracy
You may as well enjoy life now in the last few years of normality (if that is within your power) because the not-so-distant future will be one inescapable dystopia.
Adelaide, There are so many who think they can enjoy the Here & Now during the boom years. The “buy now and pay later” generation are encouraged by the banks and governments to live in the now and worry later. Who cares … We all tearfully found out what happened. Regarding the future – I think you’re absolutely right. No social welfare and state pension and it is for that reason that I think that it is not so wise for me to live in the Here & Now. We all have no alternative than live in the Here &… Read more »
No further comment needed from me!!It’s the money system stupid!! :) http://www.thedailybell.com/news-analysis/35026/Reality-of-Inflations-Outcome/ “An unbiased observer watching from a distance would surely conclude two things from the just-announced intentions of US and British central bankers to continue to stimulate aggressively: First, these intentions are as rash as they are deliberate and second, those at the helm obviously want another great bust. This is exactly what we’ve been writing, of course. They’re pushing a Wall Street Party as hard as they can. And they know full well the harder they push the worse it will be in the end. From a boom… Read more »
Degaulle on the advantage of a gold standard is….
Maybe we would not be in this mess if he had had his way.
http://www.nysun.com/editorials/yellen-and-degaulle/88584/
Unemployed 2 years went through the lows and lows of being unemployed…cant seem to get gainful employment. Applied for 346 jobs…..2 interviews….unsuccessful. presently working towards setting up my own business…again. Any thing I…you or anyone receives from social welfare we paid for through our pay related social insurance , U.S.C , Taxes etc. In the past year we have had Govt attempt to criminalize the Unemployed , the low paid & alleged strategic defaulters.. In several years..their will be almost zero benefits..even though you paid for them…their is a very high probability I or my wife will not have our… Read more »
I work a 4 day week not because I get benefits (I get none) but because it allows me to do creative work at the weekend. It also preserves my sanity. I know it wouldn’t be possible for every company to do this but if the companies that could do this did so and employed another worker on a PT basis for each 2 or 3 worker on that 4 day week, we would have a lot more at work with the added benefits to the economy, health and personal creativity. The govt could even subsidize this idea with the… Read more »
BoCualain,
Great Ideas. This concept is implemented in Germany, Holland, France, Belgium and the Scandinavian countries during the crisis in the 80’s. It is still in place in fact.
Someone penned a piece on the back of the IT health supplement a couple of months back to the same effect but it was never picked up on unfortunately. My neighbor who owns and runs his own business does not like the idea one bit. Mainly from an administrative pov but also because he thinks that it would cost him more but that is where the government must lend a hand.