The price of third-level education has risen by 131 per cent since 2005, while the price of computer games has fallen by 63 per cent. The cost of clothes has fallen dramatically in the past decade and a half, while the cost of healthcare has risen exorbitantly. The price of furniture is much lower now than it was at the height of the boom, yet the price of childcare has gone up by 34 per cent.
These are the latest trends in prices and costs in Ireland. What is the reason for these huge disparities and what does this mean for the economy, the electorate, and the political cycle?
Education, healthcare and childcare are people businesses, and people are expensive. These services can’t be outsourced to cheaper countries or replaced easily by robots. In contrast, manufacturing is hugely affected by transformational technological innovations. New technology has caused productivity in manufacturing to surge upwards, allowing prices to come crashing downwards. Productivity is the alchemy of economics: when a company can produce much more with much less, not only can its prices fall while remaining profitable, but wages in high-productivity areas can rise and the company can still make money.
Productivity explains how there can be more computing power in your tiny phone than in a giant 1970s space rocket, but the phone is a fraction of the cost of the Apollo; at the same time, there are far more people employed in tech at higher wages than in the 1970s.
Spare a thought for people working in jobs such as teaching, healthcare and childcare. Productivity can’t go up in these sectors because robots can’t do the job of looking after babies, treating sick people or teaching children. (In some cases, robots could do parts of these jobs, but what government would want to introduce such a brave new world?)
There are other ways of increasing productivity in education, but they mightn’t be palatable. For example, we could increase class sizes to 100 or maybe 200, if we wanted to be more cost-effective. This would dramatically increase productivity and we could pay teachers lots more, but the electorate wouldn’t stand for it.
Similarly, we could increase doctors’ productivity by extending waiting lists fivefold, but that’s hardly a runner. And while we are at it, we could industrialise childcare by stipulating a minimum of 500 infants per creche, but that’s not going to happen.
You get the picture.
More machines
In the people’s eyes, better phones, laptops or cars means more machines at lower costs, driven by technology.
Better means more.
However, in the people’s eyes, better teaching means fewer children per teacher; better healthcare means fewer patients per doctor and better childcare means fewer infants per caregiver.
Better means less.
Fewer pupils, patients or infants per worker pushes productivity down. The lower the productivity, the higher the cost of the service and the higher the price of the service.
These thoughts went through my head listening to the teachers’ unions giving out about wages this week. These classroom revolutionaries are members of the “squeezed middle” – large sections of the Irish middle class, hemmed in by high levels of income tax and high costs of living. At the end of the month, the squeezed middle has no money left. This is particularly the case for working parents with children still at home, which we know these days can last for a long, long time.
But why is this happening now, just when the economy is growing?
Interestingly, the answer lies in the fact that the economy is growing quickly. A growing economy is a counterintuitive beast. The notion that all boats rise on the growth tide is unfortunately only that, a notion. The reason the economy is growing quicker than most is that some parts of the Irish economy are incredibly productive. Transformative changes in technology are making some industries, such as multinational manufacturing industries, more and more productive.
In productive areas of the Irish workforce, where the level of wages is already high, wages are rising very quickly.
So far so good, but there’s a hitch: most Irish people don’t work in the multinational or tech sector. So what happens to them?
As wages rise in the tech and multinational sector, something strange happens in the economy, particularly when the economy is small and at full employment. The higher wages in high-productivity sectors actually drag wages up in low-productivity areas, making them expensive because (a) people simply leave the areas where productivity is low and head to the area where productivity is high, so these places have to raise wages to retain staff or (b) higher wages in the tech sector push up houses prices and this forces workers in low-productivity sectors (such as teachers) to agitate for a pay rise to maintain their standard of living. (This process is called Baumol’s cost disease, after the economist William Baumol.)
Political practicalities
Lower productivity areas of the economy are forced to pay higher wages to retain employees. If they can’t offer higher real wages, they must attract workers with better conditions, more job security or longer holidays. This has the effect of driving up prices and costs in the lower-productivity sectors.
Now think about who supplies big sectors such as education and health in Ireland. The State provides these services. As the cost of these services goes up, so too does the State budget outlay.
However, if costs are rising more quickly than the price of other services, the amount of tax the government has to levy to pay for these more expensive services also goes up.
Now, let’s go back to the squeezed middle or, as they have also been called, “the people who get up in the morning”. How can their income tax bills be cut if the cost of things such as education and health are going up? They can’t, unless the State finds something else to tax – or they cut spending on health and education services. And that’s not going to happen – for the Fine Gael minority Government, or any party – it would be politically impractical now that we are facing into another election cycle.
The squeezed middle is going to be squeezed for some time to come.
Good morning from beautiful Grenada.
All very well and lucidly explained. BUT nothing about the cost of money. The expanding money supply (inflation at 7-8%), the accumulating debt associated with it and the increasing volume of interest to be paid on that debt. It does not explain why the middle class is squeezed in every county regardless of the health of the economy. It does not explain why the indebtedness of all people and and governments and most corporations have dramatically increased. It does not explain why the housing costs are out of sight all around the world, or why rents are soaring too. It… Read more »
A huge amount of people are working out of necessity to do something which neither makes them happy in doing it nor does the produce of their labour make anyone else happy either short term or long term.
People are increasingly existing in a toxic economy which keeps them stressed, in competition and in conflict with each other, chasing their tales working ever longer hours for less reward but under the tight control of a system which serves the extravagant wasteful lives of a few at the top.
http://www.gopusa.com/?p=43353?omhide=true https://www.youtube.com/watch?v=iC_TPmLyluc There is no democracy left in the US The rule of law is thwarted. The EU is not democratic All policy decisions are made by appointed officials. There is no longer such a thing as a free market, economically Justice is no longer blind but totally biased. The power of the state is being brought to bare against the private citizen, there is no recourse. An individual is bankrupted defending himself from baseless accusations. Free speech is now denied unless politically correct and conforming to doctrine. The educational system no longer imparts knowledge it enforces the latest doctrine.… Read more »
What did people really expect to happen? Is this really a revelation to anyone? If transnational corporations or wealthy individuals don’t contribute by choice and can offshore wealth and relatively poor people don’t contribute by design who did you really think was going to pick up the slack? The middle income groups (as opposed to the middle classes who represent cultural aspirations) are sold the liberal agenda but seem to forget that it is they who will pay virtually all taxation demanded by that agenda while being unable to access many of the services and virtually all the luxuries paid… Read more »
https://www.jsmineset.com/2018/04/10/no-one-consider-chinas-ultimate-nuclear-option/
Bankruptcies up again to similar level of 2011
https://confoundedinterest.net/2018/04/09/danger-chapter-11-bankruptcies-jump-63-from-1-year-ago-to-april-2011-levels/
Drones hacked so why not aircraft carrier groups? It would be better it wars were fought by robots and AI rather than young men and collateral damaged civilians. Then like after a soccer match everyone could have a beer and get on with their lives.
https://www.nbcnews.com/news/military/russia-has-figured-out-how-jam-u-s-drones-syria-n863931
Davids narrative (like rte and all other emotional narrative commentators) is that education plus health workers are victims and to fuel the present system we need more tax transfers to our most protected sector. This sector are the equivelent of over protected children driven to school forever regardless of age and ability. A software developer earns 37,000e, a software engineer earns 43,000e and a senior software engineer earns 61,000e. https://www.google.ie/url?sa=t&source=web&rct=j&url=https://www.payscale.com/research/IE/Location%3DDublin-Dublin/Salary&ved=2ahUKEwjHmfi81bHaAhWHKlAKHXj6AwMQFjAMegQICRAB&usg=AOvVaw20vmKoxbH2W4h8ZeZuCnSq Even back in 2013 according to the HSE 27% of nurses earned between 40,000 and 50,000. 33% earned between 50,000 and 60,000 and 21% earned over 60,000. 18% earned between… Read more »
Third Level education in Ireland is not a price, it is a contribution to something largely funded by government. While it is fair enough to look at the impact of this contribution on living costs , it is meaningless to use this figure in any discussion on productivity.
Middle class people could pay more taxes and have cheaper university courses, or could pay less taxes and have more expensive university courses. The effect on the middle class as a whole might not be much different either way.
REAL HISTORY + REAL GEO-POLITICS WHICH THE TEACHERS WILL NEVER TEACH U AT SCHOOL
Henry Makow
?@HenryMakow
TWEET ;
USA ignored the napalming of American sailors on the deck of the USS Liberty, but pretends to be concerned with a fake gassing of Syrians –
This is just a Cabalist pretext for war because Russia won’t bow to USA hegemony.
https://twitter.com/HenryMakow/status/983868492020703232
https://www.youtube.com/watch?v=YZYjRREqUF0
TRUTH !
“The country we love to hate ;
But, never cease to imitate.”
RTE always tries to emulate BBC
_ _ _ _ _ _ _ _ _
AND, HERE, DIRECT “FROM THE HORSE’S MOUTH” IS DIAGNOSIS OF B.B.C. ;
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Haaretz.com
?Verified account @haaretzcom
HEADLINE ;
The BBC, a Broadcaster in Israel’s Pocket
https://twitter.com/haaretzcom/status/983557999397670912
Official Full-Scale WW 3 coming fast ! And, these cosy-shops within the middle classes [ And, there are many classes within the Middle Classes ] will not be ur friend before, during, & after : Because, _ _ _ “A Leopard cannot change its Spots” + “Them’s Leopards all” as proven by how the act for many decades. Champagne Socialist Teachers Garda-Landlords / Landlord-Gardai Nurses married to above Gender-Fluid RTE Note ; Nothing from our Soccer Players, nor Gender Fluid RTE, nor El Presidente at the Arse, nor Bob Geldof, nor Bone-Head himself, nor Mirror-I-am O’Callaghan, nor Not-My-Taoiseach Fear-Rod-Karma, about… Read more »
Brexit analysis in terms of face fungus; Martin Schulz will never be taken seriously in Britain because of the simple fact that he has a beard. The British, bless them, believe people with beards have something to hide: they are not too fond of moustaches either: which they regard as a sure sign of vanity or worse. Out of Britain’s 77 Prime Ministers only one Prime Minister, Lord Salisbury, had a full set of face furniture. Benjamin Disraeli had a microscopic goatee, but he was a dandy and an exotic and the Queen’s favourite so he was let off. Clement… Read more »
“There are other ways of increasing productivity in education”
I can think of one….Second level teachers should stop taking a QUARTER OF THE YEAR off for Summer holidays. That would raise productivity by 20%. Spreard the classes out over the whole year, with the kids taking a set number of modules of each subject would reduce class size (by 20%), and increase effective learning.
I think this distinction of classes into working, middle (with upper and lower bands) and upper class is very passé. It possibly hasn´t applied to Ireland since the mechanisation of agriculture 50 years ago. It certainly doesn´t allow for the huge migration and flux that has existed in Ireland since the late 90s. It is too simplistic and ought to be binned. Perhaps we could do with new definitions for the society of today in order to better discuss its economics and politics? Education uses (or used) a five-tier classification for parents, but this relates to educational prospects for kids.… Read more »
The problem with this article is too much acceptance. There is always room for improvement. Take health for example. I don’t have a medical card. I go to the doctor once/twice a year. How often does someone with a medical card go on average? A lot more than twice a year. The system has/is creating demand that is psuedo real demand. To paraphrase Parkinson’s Law “demand will expand to fill the available supply of services” As for education – Let’s take an example. We are teaching Polish in our schools. What is the economic rationale behind this decision given the… Read more »
Totally agree that there’s no respite in sight for the middle class but not so sure about the source of the pain. First of all, it’s worth making the point that using the costs of 3rd level education and healthcare since 2003 is a bit misleading in Irelands case. University fees were abolished in the 90’s so prior to 2003 the costs were much higher. Roughly around 2003 the cost of 3rd level education was at an all time low in Ireland. On healthcare, I can’t remember the ratio of admin staff to nurses but this is one of the… Read more »
Why is Dublin the only city in Europe that allows rickshaws? So long as we have limitless immigration, we will remain the most expensive nation in the ezone, second most expensive in the eu,Dublin is ten per cent pricier than London. Bewleys charge seven euro for a bowl of watery soup.Multicultural is wonderful, if you are Mary Robinson.
NATO Whore that Irish State is [ “Officially, & indeed constitutionally, Neutral” Irish State has been allowing USA / NATO use of Shannon Airport ] ==> there will be no relief for ANY of the Classes, nor also for ANY of the Sectors that straddle, or are separate from, the Classes [ e.g.s Chameleons ( straddling sector ), Kleptomaniac Tourists 8-) ( separate sector ) ], within Irish State if WW 3 escalates to being Officially Full-Scale WW 3 ; We will be considered legitimate Battleground because we not effectively neutral. _ _ _ _ _ Ref. Damian Martinovich Apr… Read more »
MEANWHILE _ _ _ And, the Tectonic-Political Shift described below is of immense importance for all Classes & Sectors [ Straddling or Separate ] in Irish State ; EXCERPT ; . . . In another 2017 Jerusalem Post article titled, ‘Israel and the unexpected new world order,’ Brian Schrauger writes (emphasis added): “Israel is positioned to guard the world’s Internet. Everything today is traded, controlled and administered online. And Israel is emerging as the world’s number one guardian of the worldwide web. That means, regardless of being a few miles offtrack from China’s Land and Maritime Roads, it is positioned… Read more »
It is the true rogue state. The deep state.
https://michaelsavage.com/?p=15220
The white hats are really the dark ops. Ostensibly humanitarian while covertly criminal and callous. Trained and paid by the West and false flag events operated in order to “allow ” western intervention and removal of yet another regime in the name of advancing democracy. “”This confirms that rebel forces had access to chemical weapons and that the U.S. helped familiarize rebel groups with storing and transporting the weapons. And now, with the rebels almost defeated, someone decided to use chemical weapons against a few dozen civilians. And everyone had to know that this was the most likely way to… Read more »
@ Tony Brogan,
Apologies for being late in returning to u on a few points in last article’s discussion ;
1_
Male on right-hand-side of photo montage
https://twitter.com/melodyhahm/status/981138180744318976
It took me a bit of time to retrieve the Twitter thread ;
Now, I able to inform u that he is Chuck Schumer ;
Google.com results for string ;
chuck schumer scandal
https://www.google.com/search?source=hp&ei=5m3QWtqiG4vfvATt85PIBQ&q=chuck+schumer+scandal&oq=chuck+schumer+scandal&gs_l=psy-ab.3…1360.11010.0.11296.21.17.0.3.3.0.657.3122.0j3j5j1j1j1.11.0….0…1c.1.64.psy-ab..7.13.2522…0.0.AXHHsQ5qk24
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Follow-through on other points will issue as separate post[s]
@Tony brogan.
Just for you tony why the west hstes Syria;
https://www.rt.com/op-ed/syria-world-hate-message-604/
HEADING ;
Jimmy Carter Just Issued A Chilling Warning To Trump About Syria
by
Tyler Durden
Fri, 04/13/2018
https://www.zerohedge.com/news/2018-04-13/jimmy-carter-just-issued-chilling-warning-trump-about-syria
WE NEED MORE OF SYRIAN GIRL / PARTISAN GIRL TO TELL IT AS IT IS And, she is a Beauty too ! THEN, WE WOULD HAVE CHANCE FOR RELIEF FOR : a_ the squeezed Middle ClassES b_ the squeezed Poor ClassES [ vis Jobbed Poor ClassES, & Jobless Poor ClassES ] c_ the squeezed SectorS STRADDLING the Middle ClassES & / or Poor ClassES d_ the squeezed SectorS SEPARATE TO the Middle ClassES & / or Poor ClassES //////////////////////////////////////////////////////// 1st “Informal” Fractional Reserve Banking ; Following realisation that Receipts for Gold stored in Gold-Smiths’ Safes were operating as Currency 2nd… Read more »
Ref.
Above reflection on Puppet Leaders of UK not exhibiting Beards
Here is the USA situation
Mustaches as proxies for Beards
APROPOS OF ZIO-USA’s EFFORT TO GIVE RELIEF FOR THE SQUEEZED Israel Secret Intelligence Service [ I.S.I.S. ] TRAPPED IN GHOUTA, SYRIA I, MYSELF, THOUGH, AM THINKING THAT SYRIA — WITH RUSSIA’S HELP– IS NOT TAKING ITS EYE OFF THE BALL OF ROUTING THE TRAPPED Israel Special Intelligence Service [ I.S.I.S. ] Legion INTERESTING CONTRIBUTIONS UNDER MAIN ARTICLE OF URL BELOW //////////////////////////////////////// Ref. Will Russia Ever Force the US to Get Real? April 14, 2018 YES, WE KNEW HE WAS A SNAKE knew-i-was-a-snake.jpg(left, Yes we knew he was a snake…) BY HENRY MAKOW PH.D. /////////////////////////////////////// First Comment by TP A few… Read more »
TRUTH !
It is Tom Lehrer’s 90th birthday: he is still good:
The Sociology song:
https://www.youtube.com/wat…
And:
Tom Lehrer – We Will All Go Together When We Go:
https://www.youtube.com/watch?v=frAEmhqdLFs
TONY BROGAN HAS BEEN CORRECT ALL ALONG ABOUT : GOLD SUPPLANTING FIAT TEXTILE / PLASTIC PAPER GOLD SUPPLANTING MERE “CREATED OUT OF THIN AIR” DIGITAL ENTRIES IN LEDGERS NEW FINANCIAL SYSTEM ///////////////////////////////////////////////////////////////// HEADING ; Russia Readies Back-Up System For Potential “Split With International Banking System” by Tyler Durden Sat, 03/25/2017 Authored by Mac Slavo via SHTFplan.com, THE ARTICLE ; The grand order of things could be undergoing some major overhauls. To put it more bluntly, a war to reset the global financial order is about to be unleashed. Preparations inside Russia are being made in case the ultimate banking sanctions… Read more »
Re ; The Democratically — & by massive % majority of country’s populace yet again — fairly elected Leadership of Syria BUT whom David McWilliams accuses of being a Regime ;
Assad giving as much relief as possible to all the squeezed classes of Syria
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Ian56
?@Ian56789
US Reporter @PearsonSharp on the ground in #Syria investigating what life is like under what the US calls the “Monstrous Dictator” Assad.
#Damascus
#SyriaStrikes
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https://twitter.com/Ian56789/status/985308042471329794/photo/1?ref_src=twsrc%5Etfw&ref_url=https%3A%2F%2Fwww.henrymakow.com%2F
Life on the Briney. Mostly middleclass playfellows. 62 Mile overnight sailing race.
Mostly cold and wet. Winds from zero to 20 knots. Definitely not Grenada!!!
“While another war or two might buy a bit more time for the Anglo-American Empire, it should also be very clear that the U.S. military, like the U.S. budget, is out of control with no one specifically in charge. What it is instead is an amorphous powerful monster that needs more lands to conquer to justify more military spending that in turn will continue to keep massive parasitic bureaucracies ever expanding so that hundreds of thousands of Americans can continue living a splendid lifestyle while Americans who produce things of value find their living standards ever in decline.” (all funded… Read more »
When McCabe and Comey testify against each other we will know the truth that at least one is a lyer if not the other!!
Draining the Swamp is such fun.
https://spectator.org/andrew-mccabe-and-james-comey-deserve-each-other/?utm_source=American+Spectator+Emails&utm_campaign=65d156ad90-EMAIL_CAMPAIGN_2018_04_16&utm_medium=email&utm_term=0_797a38d487-65d156ad90-104365713
Draining the swamp
https://spectator.org/andrew-mccabe-and-james-comey-deserve-each-other/?utm_source=American+Spectator+Emails&utm_campaign=65d156ad90-
EMAIL_CAMPAIGN_2018_04_16&utm_medium=email&utm_term=0_797a38d487-65d156ad90-104365713
NO RELIEF FOR THE SQUEEZED MIDDLE WAY ADVOCATE NOW
How did Tucker Carlsonn squeeze into Zio-MUR-der-DOCH’s Fox News propaganda TV station ?
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BUT _ _ _ BUT _ _ _ BUT
Tucker is being tucked into line now
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Henry Makow
?@HenryMakow
TWEET ;
Someone yanked Carlson’s chain since he made this great broadcast ;
Tonight he was echoing the official line on Syria
http://whtt.org/must-see-report-on-syria-war-fox-newsman-tucker-carlson/ …
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https://twitter.com/HenryMakow/status/986084715181506561
There will be NO re-leaf for Adam & Eve by The Serpent SERPENT REALLY SQUEEZING HARD ON THE MIDDLE OF OF Candad’s TORSO NOW IN THE FREEMASON COURT SYSTEM OF CANADA ////////////////////////////////////////////////// Beyond the Bank of Canada. Litigation Directed against Ottawa Regarding the Mandate of the Bank of Canada By James Clayton Global Research, April 13, 2018 Region: Canada Theme: Global Economy, Law and Justice [print] 24 1 3 30 A few determined Canadians may have felt like something big was actually about to happen—before they spent more than five years in litigation with the Government of Canada. Maybe they… Read more »