‘The money is good and the suntan is free. You could fry an egg on the stones here, if you had an egg. And you could certainly sink a pint of Harp, if you had a pint of Harp.”
Do you remember that? The classic 1980s ad for Harp produced that famous line about “Sally O’ Brien and the way she might look at you.” It must have some magic to stay in the public consciousness for so long. The ad, first aired in the early 1980s, spoke to an Ireland of emigration and home-sickness felt by an emigrant out in the desert on good money, but having no connection with the place.
I am writing this from the middle of a different desert. It is 107 degrees today in Arizona and visiting the Irish Centre, here in Phoenix, reminded me of the ad. It is unbearably hot and talking to the many Irish ex-pats who have rocked up here in the desert reminded me of the bloke in the ad writing a letter home lamenting the things he missed.
However, Sally O Brien and emigration apart, one of the other things that has struck me in Arizona is the amount of frail elderly people working – putting in long hours working at shopping malls, garages, cafes and fast-food joints.
It is disconcerting to see women and men well into their late-70s, and in some cases older, working in jobs that pay the minimum wage. To a European, who expects a welfare state to look after us when we get older, the notion that we’d still be lugging ourselves out of bed, putting on some polyester uniform, beaming, “have a nice day” while on our feet for an eight-hour shift, seems all wrong.
But that is the reality for many Americans and it is very noticeable down here in the sunshine states, which have seen a huge migration of older people in the past three decades from the cold north.
Could this be the prospect for my generation in Ireland?
Yesterday, this paper carried a story that only half of workers in their 30s and 40s are saving for a pension. This generation has been most severely affected by the housing bust and is at the stage of their lives when they have young children and teenagers, so it isn’t surprising that there is hardly any money left at the end of the week to save. Yet, the same survey revealed that four out of 10 of them are concerned about having enough income for retirement.
The ability of a country to provide a pension system for its older people depends on having enough young people working to generate the tax income to divvy up to the older ones. That’s the deal. Therefore the system is dependent on having enough jobs for the average person and it is also dependent on there being not too many older people.
However, two structural issues immediately raise their head. The first is the fact that advances in medicine mean that we are all living longer. In 1961, there were 315,000 people aged 65 or over in Ireland; by 2011 this number had increased by 70pc to 535,393.
The second is the fact that more and more young people can’t find a job and without jobs there is no income to pay for the pensions.
One of the major questions is where the jobs will come from. Since the 1970s, there has been a dramatic fall-off in employment opportunities all over the Western world. For example, in the US in the mid-1970s, one person in 15 was unemployed. Today, the figure is one in six and that is after five years of the most active economic stimulus on record.
In Ireland, we know that the figures are worse on every comparison but many of us content ourselves with the fact that this is a function of the economic cycle and the worst recession in the developed world, where national income has fallen by one-fifth, domestic demand has fallen by one-third and there are over 200,000 fewer jobs in the country than there were in 2008.
But what if the lack of employment opportunity is not only cyclical but also structural – meaning that the gradual process of globalisation is moving jobs away from the country and they are not likely to come back?
A way of looking at how this process is developing is to look at the rate of inflation in various sectors since the Sally O’Brien Harp ad. If we take 1983 as our starting point and we compare the prices of various things we spend our money on, we can see how certain industries have been decimated and how certain ones have grown.
If we start at 1980 and price everything at 100pc, we see some very interesting patterns developing which have profound implications for job opportunities in the future.
For example, if telecommunications cost the equivalent of €100 in 1983, today it costs €98. Amazingly, despite the huge improvement in telecoms, it actually costs less today than in 1983. This is competition, technological advances and globalisation.
On the other hand, a day in hospital is now 511pc, or five times, more expensive than it was in 1983. Similarly, the cost of education has gone through the roof and is now 440pc higher than it was in 1983. The costs are mainly wages, so the industries to be in are clearly education and health. But these are not traded industries in the main, so we will have to sell something new to pay for these sectors.
And what might that new thing be?
The fall in the price of phones shows what has happened to employment and wages in manufacturing – people have been replaced by technology. So what is going to change to bring back manufacturing in order to employ the average guy?
And if we don’t find a sector in Ireland that might absorb hundreds of thousands productively, how will we generate the cash, which might pay for the pensions of people in the future? The cost of education and health are largely financed by the public purse, which is also dependent on the taxes from selling stuff at a profit.
This is the big conundrum facing the national economy and it is not easy to find the answers. However, one thing is clear: if Ireland doesn’t find that new industry or set of industries, the prospects for today’s thirty- and forty-somethings get closer to those of the elderly, minimum-wage workers of America’s sunshine states’.
Come to think of it, Sally O’Brien must be reaching retirement age some time soon. Doesn’t time fly?