One of the oddest things happening in the Irish economy is that unemployment is falling quickly but income-tax receipts are not rising in tandem. The Government is confused. When employment rises so should income tax. So why isn’t this happening?
A few weeks ago, I was on the early-morning Air Canada flight from Havana to Toronto, and I noticed that virtually all the business-class seats were occupied by Chinese businessmen. This is now a familiar sight on international flights. China is wrapping its arms around the world.
Chinese merchants sell cheap consumer goods to Cubans, who buy them with hard currency earned in Havana from Canadian tourists. Some of that money goes back to China, where Beijing uses some of the money to invest in infrastructure back in Cuba, thus buying China political influence as well as market share.
Some money stays in Canada, where the Chinese are pushing up the price of real estate as they buy apartments on Toronto’s lake shore – a personal insurance policy against China lurching back to old-fashioned communism.
A Canadian sitting beside me on the flight chatted about her country: how everything was so expensive now in Toronto and how her salary didn’t stretch any more. She couldn’t figure out why that was, because Canada was booming, yet she felt she was going backwards.
She is not alone. This is a typical conversation all over the West. How many times do we hear people in Ireland ask, “If things are going so well, why am I not feeling it?”
Could there be a connection between the Chinese businessmen on the Air Canada plane and the fact that people in Ireland feel they are struggling to keep up?
In the past few years we’ve seen strong economic growth, yet the feeling of prosperity for the average working person remains elusive. In contrast, the extremely wealthy have taken a disproportionate amount of the goodies. This disparity between headline economic rhetoric and everyday social reality drives populism –particularly in the US and the UK – at the ballot box.
Voting in protest against the establishment is a bit like telling your boss where to stuff his job. You know it’s probably not the cleverest thing to do, but at the time it feels great.
But rage is the weapon of the powerless, not the powerful. And the powerlessness felt by the average voter stems from the reality that, over the past 20 years, wages have been slipping back constantly relative to profits.
In any economy, the goodies are roughly divided between wages and profits. When something is sold the income goes to workers, in the form of wages, or to the people who own the company, in the form of profits. If people are more productive their wages go up. At least that’s the theory.
In practice, something different is happening. Irish workers are generating huge amounts of income but getting only a fraction of this in wages.
The accompanying chart shows Irish productivity per worker and real wages over nearly 60 years. From 1960 to 1990 wages and productivity went hand in hand.
In fact, for 30 years wages were a bit higher, meaning profits were lower. This goes some way to explaining the very fragile state of corporate Ireland up to 1990.
But around 1994 Irish workers’ productivity takes off, while wages just tip along, always increasing but never by much. The gap between Irish productivity and wages opens up dramatically. That gap is part of the reason why the economy is posting stellar numbers but we don’t feel it.
Since the 1990s multinational corporations have driven up Irish income by enormous investment, using fewer and fewer workers to produce more and more stuff. The more capital the largely American firms deploy in Ireland, the more they export and the more productive the workers who work in these plants become. Because the volumes produced are so huge the multinationals have distorted productivity.
In Ireland, the huge housing boom-bust-boom has led to income from property, such as rents, rising more quickly than wages. This, too, makes people feel left behind
Meanwhile, in the past 25 years, central banks have worried about inflation more than growth, and therefore each recession has been taken as an opportunity to wring more inflation out of the system.
In plain English, this means that the worker pays. In a recession, unemployment rises and wages fall. When the economy turns and the worker gets up off the canvas, he does so at a lower real wage than before. This outcome is policy-inspired wage compression.
In addition, technological disruption has made workers cheap all over the world. And this is where our Chinese friends come in. Technology allows companies to scour the world for cheaper workers, and therefore the cost of labour around the world has converged.
Granted, certain professions have done well as a result of technological change but, on average, wages have been kept in check by competition.
The global supply chain means that the global pool of workers, rather than the national pool, sets the national price of labour and therefore wages. You could say the labour force has been “Uberised”.
When local workers lose their jobs because the jobs have migrated somewhere else, those people try to get other jobs. Typically, they slip backwards into jobs that are less well-paid, because they still have to put bread on the table. This puts further pressure on lower-skilled jobs, explaining Ireland’s conundrum. We are creating jobs but at wages so low that these workers aren’t paying income tax.
Societally, this global process leads to more inequality between citizens who depend on wages for their income (the vast majority) and those who depend on rents, dividends and assets (a small minority).
Politically this drives populism, as disenfranchised workers might not have good wages but do have legitimate votes, and the ballot box gives them the possibility of revenge.
In 2018 this conundrum is not going away.
Subscribe.
Not a word about borrowing to support lifestyle and the accumulating debt. Being downtown and stopped at a traffic light one gets to see the people on the street, or at least crossing the road. Observe who they look. Few where smart well designed and cut clothes. Most are clothed in what looks like worn out basket ball tracksuits. That is the cheapest cloths available. Also observe their snacks in hand. mostly cheap processed packaged items. Then the obligatory drink(8 pints of liquid a day) and one sees expensive coffee or a sugar laden bottle of slurpee clutched in hand.… Read more »
The hidden stealth tax is inflation. In the US at least and probably elsewhere the rigged stats show low inflation. The real rate is 5 times higher. That is correct. 10% and not the 2% posted. That means prices are doubling every 7-8 years. Incomes are doubling every 25 years.
Financial assets and housing are doubling faster than the 10% inflation rate. Thus those in financial assets are hanging in while the rest are drowned, economically speaking.
The “rich” get richer and the rest poorer.
http://www.shadowstats.com/alternate_data/inflation-charts
the increase in the money supply tend to mirror the actual inflation rate.
http://www.shadowstats.com/charts/monetary-base-money-supply
In the US, GDP has actually been in decline for 15 years. The EU will be little different.
http://www.shadowstats.com/alternate_data/gross-domestic-product-charts
http://theeconomiccollapseblog.com/archives/the-washington-post-says-that-fedcoin-will-be-bigger-than-bitcoin “”The one thing that could derail the cryptocurrency revolution faster than anything else would be interference by national governments or global central banks. Unfortunately, now that Bitcoin, Litecoin, Ethereum and other cryptocurrencies are getting so much attention, it is inevitable that the powers that be will make a move………….. This is a revolution that has the potential to completely change the global financial system, but I have a feeling that global central banks will never let it get that far. The current system funnels literally trillions of dollars to the very top of the food chain, and the elite… Read more »
Sprott Asset Management echo the same sentiments.
“We believe the corporate focus of Trump tax cuts is misguided for two reasons. First, lowering corporate tax
rates will only exacerbate the economic stratification already plaguing the U.S. economy. As shown in Figure 1,
above, corporate profits as a percentage of GDP hover near all-time highs precisely as wages as a percentage of
GDP have dwindled toward historic lows.
http://www.lemetropolecafe.com/IMG2017/Misc/Sprott%20Institutional%20December%202017%20Strategy%20Report.pdf
Not only is work paying relatively less, it is also gettier nastier. Conditions get worse and workers are kept in a state of fear, knowing they have to keep working to pay all the bills. Even the educated now can only hope of a house-share somewhere. There’s lots of very unhappy workers in the lower end of the service economy and they’re just about making ends meet but it’s costing them dearly in terms of health and happiness. Collectivey, this is very bad for the national morale. There seems to be a general sense of hopelessness in the land-this Christmas… Read more »
Apologies, I think I pressed the return key by mistake. I meant to add that disengagement might well be the best option in the long run.
“You could say the labour force has been “Uberised”. @David McWilliams WHY OH WHY OH WHY WHY ARE WE ASKED TO VOTE ON -> HOMOSEXUALS AND MARRIAGE => MURDER OF THE UNBORN! . . -> THE UBERISATION OF HUMAN LIFE? -> FIRST THE BODY THEN ITS SOUL? . . SOROS MINIONS KEEP PUSHING -> FOR WHATS LEFT OF christian IRELAND -> TO MURDER ITS UNBORN CHILDREN . . . -> ABORTION = A CLEVER SATANIC TRICK? -> ORWELL NEWSPEAK -> CALL MURDER BY ANOTHER NAME => AND TO SOME IT SMELLS LIKE ROSES . . . -> THIS VIDEO HAS… Read more »
Is Dublin the only city in Europe that allows rickshaws to be operated without any regulation?Limitless immigration is driving house costs to increase by ten per cent per annum, yet this is never mentioned by the pc media and charity industry. Property prices in Dublin have increased by a multiple of seven post 1990.Post Brexit the only border will be that imposed by the EU.Leo and co will have lots to explain.Why do so many countries have visa free access to Ireland? Ireland takes the south Americans and Africans nobody else wants. No wonder so many adults live with parents.… Read more »
The article only explains one half of the problem. The other half is this; The govts of the western world have been operating budget deficits for decades. This gap has been closed with borrowed funds. These funds have to be paid back in taxes on citizens. The govts are looking at the same graph and are concluding that taxes must be got from wealth taxes since income taxes are stagnant or falling. These taxes must be paid whether the citizen has income or not. Add these taxes to the increased burden of taxation resulting from the constantly increasing money supply… Read more »
Financing State Contributory Old Age Pensions has become more difficult because more contributors will be paying the minimum PRSI ( nothing ) amount due to very low wages and only fewer will be paying more . So less monies in the State coffers to pay the increasing numbers retiring.
Poverty cannot finance Old Age .
Here’s my go at potential solutions. Please let me know what you think: More permanent solutions: Barriers. Trump style barriers to stop jobs moving to cheaper locations. An attempt to end globalization. I think this would be the dawn of a new age for the smuggler though. And it would create division between nations which is never good Or ride it out for generations until the world’s economies all align and there’s nowhere left to go for cheap labour. I’ve a feeling that would be a very long time coming, certainly multiple lifetimes. None of these are nice, and I… Read more »
Marx’s Theory of Surplus Value.
The workers are being robbed, plain and simple.
Oh! that wicked Populism: saints preserve us….
Hello folks, Andy Mooney here. I just wanted to pop in and wish you all a very Merry Xmas from ye olde Englande. I had a lot of fun ranting on this blog over the last decade whilst decoding the gibberish of conventional economics. I don’t follow the discussions these days as they don’t really track the real emerging issues around crytocurrencies, cultural cryptography and really exciting stuff like The Graphene Era. I’ll comment briefly on the article as I’m here… Sensible observers see the rapid escalation of various innovations which will render the ‘worker’ mostly redundant in huge swathes… Read more »
50 times as a gain is very worth the bragging rights!!!
Meanwhile the left foes looney tunes about Trump. The tax Bill may get signed today. We will see how a refund of excess taxes payable allows people to spend their money any way they see fit. Some major corporations are announcing bonus cheques to employees and others increased wages. Will this stimulate the economy or just be used to finance more debt or to pay off existing debt. Still IMO a move in the right direction. Major problem is the huge increase in the annual budget deficit. This increases the national debt. The great reset cannot be far off where… Read more »
The divide widens
http://www.gopusa.com/?p=35714?omhide=true
May be Ireland’s economy is not making most richer is because the taxes are too high.
Not one democrat supported this bill which gives billions back to working people.
I guess if people help themselves there is no need for the welfare state. What a shame.
https://spectator.org/the-democrats-stink-of-weakness-and-defeat-and-other-pre-christmas-news/?utm_source=American+Spectator+Emails&utm_campaign=9dea090dba-EMAIL_CAMPAIGN_2017_12_21&utm_medium=email&utm_term=0_797a38d487-9dea090dba-104365713
Canada’s own working people champion just violate ethical standards. Apparently the first incumbent Prime Minister to do so. What a trend setter.
“He also delves into ‘Hashgraph’” – many people in the crypto industry believe that Hashgraph will make Bitcoin’s blockchain completely redundant
Maybe people do not feel richer because they are redeeming accumulated debt?? Ireland: Ireland still owes €44.5B in bailout loans after paying off IMF early: The Irish Times said Ireland still owes €44.5B on bailout loans provided by the Troika in 2011 after paying off the remaining €4.5B it owed to the IMF ahead of schedule earlier this week. It noted that the National Treasury Management Agency (NTMA), the body which manages the State’s debts, confirmed the repayment to the IMF on Wednesday, a day after it was revealed that €1B in bilateral bailout loans provided to Ireland by Sweden… Read more »
Massive tax cuts in the US put $1000 bonus cheques into the pockets of thousands. https://spectator.org/128-lumps-of-coal/?utm_source=American+Spectator+Emails&utm_campaign=6a10dafc71-EMAIL_CAMPAIGN_2017_12_22&utm_medium=email&utm_term=0_797a38d487-6a10dafc71-104365713 Millions will have tax cuts. millions will have better take home pay and rising wages. Jobs will appear for millions more. “But rage is the weapon of the powerless, not the powerful. And the powerlessness felt by the average voter stems from the reality that, over the past 20 years, wages have been slipping back constantly relative to profits.” The powerless in the flyover belt so long ignored VOTED for the one candidate that said he would help. The coastal millionaire socialists despised the… Read more »
The French press in general, and Mr Micron in particular, are not the brightest switches on the lightboard if this dawned on them only now:
http://www.fdesouche.com/925067-viktor-orban-previent-hongrie-bloquera-toute-sanction-de-lunion-europeenne-contre-pologne
The Irish Times should read this (also, they should sack the incompetent and slanderous Derek Scally):
http://www.lefigaro.fr/vox/monde/2017/12/21/31002-20171221ARTFIG00266-l-injustice-faite-a-la-pologne-un-deni-de-democratie.php
http://www.politics.ie/forum/eu/ e.g. http://www.politics.ie/forum/eu/261153-eu-suspend-polands-voting-rights.html But, beware ! Lots of moles in threads of politics.ie forum ; POLAND’s INDIGENOUS DEATHS NUMBERS [ CATHOLICs in the main ] [ ARISING FROM GERMAN NAZI OCCUPATION OF POLAND ] CONTRADICTS THE HACKNEYED REMAINDER FROM THE TOTAL. THIS IS PROBABLY THE MAIN REASON POLAND BEING TARGETED BY THE SELF-CHOSEN FEW. Not forgetting that Mr. Foxman visited Ukraine prior to installing regime to please him + Victoria Nuland [ real name Nudelman ] & cousins warning them not to be informing the world of Holodomoor genocide upon 14 million Ukrainian Christians by Bolsheviks who also holding Christian… Read more »
The Self-Chosenites are still determined to impose Communism upon the whole world ;
Every citizen “equally poor” ;
Except themselves, of course.
I was told that Karl Marx alluded to ancient Ireland as basis for his communism economy ;
Because, ancient Ireland did not — allegedly* — recognise the concept of private property.
*Arguably, the ancient Hibernians did with certain property though ?
“Hey, gimme back my girlfriend ! Stop, Thief !”
“Hey, gimme back my … Britvic ! Stop, Thief !”
The housing problems are decimating : most of persons whose sole income is social welfare + in, or seeking, private rented accommodation & / or seeking public housing most of students + in, or seeking, private rented accommodation most of working poor in jobs [ particular private sector employees, & particular self-employed & particular directors of ltd. companies ] +in, or seeking, private rented accommodation OR private ownership of own accommodation ////////////////////////////////////////// Anyway, the housing problems have been carefully contrived by the Dreadful Few so as to help destroy the Irish nation. And, the local elite are delighted to profiteer… Read more »
God rest ye Jerry mental men let nothing you dismay
Remember Christ our Savour
Was born on Christmas Day
Remember good old Auschwitz
And good old Belsen too
The tidings of comfort and joy
Comfort and joy
Tidings of comfort and joy.
May Punch be good and Judy fair: may evil vanish in the air.
Like Groucho: whateveris – I’m against it.
https://www.youtube.com/watch?v=dEFd_2_b6X8
SO, WHAT TO DO ? . HERE IS A HUM-DINGER OF A TEMPLATE ! . . THE WAY TO ARISE THE PEOPLE ; Unity, Information & Peaceful Dialogue With The Elite . . Ref. HEADING ; Swedish Activist’s Murder Spurs Call to Action . . December 20, 2017 . . INTRO ; Bechir Rabani’s death has aroused the Swedish people to confront the complete corruption of the Swedish elite and MSM. The real Swedish opposition –rational people– has found their martyr. . . EXCERPT The Elite´s Extreme Fear Of The Masses . Bechir has aroused the Swedish people to confront… Read more »
See you :-)
Just home from an early Christmas lunch and supper with daughter, sons and inlaws and grandson. fun rolling on the floor with a talkative two year old. tomorrow is a sunday and a day to relax before Christmas day and the feasting and gifts to remind us of the moral authority who attempts to guide our lives for the better.
Fun, food and family are on order for this weekend. I wish everyone peace and comfort.
Best
Tony
Happy Christmas everyone.
Best Regards,
Michael.
The answer to David’s question is once again “Inflation”. But inflation is below the ECB 2% target, I hear you all? say. The bitcoin savants fir one would disagree with a smile as it is possible to have. But laughing happily aside, the price of a standard postage stamp in 2012 eas 55c. Today it’s 100c. Yeah but surely average inflation is what matters. That is another one of those big lies. Inflation should be a tight average. As in the item with the largest rate of inflation should be 3% and the lowest 1% (Not sure if a lower… Read more »
TAKE NOTE !
.
……………………………………..
.
David McWilliams Retweeted
Marla Dukharan
.
?@Marladukharan
.
11m
.
Replying to @OverstockCEO @gilliantett @FinancialTimes
.
Excellent article @gilliantett
maybe next year at @kilkenomics we can have a panel discussing how Blockchain technology can reduce poverty.
.
.
@davidmcw
.
I am not sure what else can make a big difference in so many ways including digital financial inclusion
.
0 replies . 1 retweet 2 likes
Happy Xmas to all Greek Orthodox Christians contributing to or reading solely this blog.
Greeks Orthodox Christians being very devout actually use the X to signify the Christ ;
That’s a real bummer for the Anti-Christs who purposely use X thinking that it gross insult to the Christ & Christians.
.
.
And, Happy Christmas to all Christians who use the English language version of the Logos’s other name contributing to or reading solely this blog.
Well, I guess that’s it – Christmas officially begins. It remains for me to wish all the Readers of the blog and David McWilliams himself a very Merry Christmas and part with you with the most popular Christmas carol in Poland:
https://www.youtube.com/watch?v=wriBVTJY_cA
Nollaig faoi shéan agus faoi shona duit.
Irish State’s GDP — production WITHIN Irish State jurisdiction — now classes earnings to prostitutes + pimps inter alia as part of GDP ;
“Our home-grown Betters” #”ever internationally embarrassed by any remaining Catholicism in Ireland” & #”obsessed with so-called economic growth” surely soon will be promoting aping of this from post WW2 captive country Germany ?
.
.
https://www.dangerous.com/39089/germany-now-animal-brothels-randy-goat-lovers/
THEM FOLKS BE SAYING “It’s all relative” ABOUT JUST ABOUT EVERYONE & EVERYTHING.
WELL, HERE ARE SOME PARAMETERS TO RELATE GROWTH + WEALTH :
.
…………………………………………….
HEADING ;
8 Axioms To Understand The Fake Economy
by
Tyler Durden
Dec 20, 2017
Authored by Bill Bonner via Bonner & Partners,
What have we learned so far?
http://www.zerohedge.com/news/2017-12-20/eight-axioms-understand-fake-economy
The growth of Christianity stemmed from the death of Stephen
http://suscopts.org/resources/literature/215/part-ii-saul-of-tarsus-and-the-martyrdom-of-st-ste/
NO CHRISTMAS CHEER FOR MANY INDIGENOUS SWEDES IN MALMO, SWEDEN . . FOR SURE, WERE THE DREADFUL FEW TO POOL TOGETHER AN ASSORTMENT OF YOUNG IRISH INSTEAD, OR ANY OTHER NATIONALITY, MALE DEGENERATES & TUTOR THEM TO RAPE CHILDREN [ Male & Female ] & WOMEN OF WHATEVER TARGETED NATION ; ==> U WOULD GET THE SAME RESULTS ! /////////////////////////////////////////////////////// HEADING ; 100s Protest in Sweden After Police Told Women to ‘Stay Inside or Walk in Pairs’ After Series of Violent Gang Rapes Dec 21, 2017 Source: dailymail.co.uk The North Tags: gang rape Malmo migrant invasion Muslims sexual attack Stefan… Read more »
“Everybody’s smokin ; But, no one’s gettin high.” . John Lennon ; Nobody told me ; 1980 . . “Israel’s growing territory isn’t making the indigenous Semites richer.” . . BRUTUS WAS A FASHION OF A FRMSN BRUTUS — A MONEYLENDER — JOINED THE PLOT AGAINST JULIUS CAESAR BECAUSE CAESAR HAD UPTURNED THE BANKSTER SCAM BUNDLE THAT WAS BLOOD SUCKING UPON THE CITIZENS & SLAVES OF ROME. . . https://twitter.com/HenryMakow/status/945326238163505153 . . FOLLOWING ; . NO OFFER BY THE SELF-CHOSENITES FOR 1-STATE SOLUTION WITH EQUAL + FAIR RIGHTS FOR SEMITES [ JUDAICS + PALESTINIANS ] vis. NO OFFER OF 1… Read more »
“”She is not alone. This is a typical conversation all over the West. How many times do we hear people in Ireland ask, “If things are going so well, why am I not feeling it?”” People have been talking about this for years. I talked to Americans working hard going backwards, many years ago. It is the money system. all money is debt. The governments run deficits and borrow money. The banks increase the money supply and as all money except coin is loaned into existence this caused more debt. In fact 97% of all money is debt. All the… Read more »
Project Veritas. James O’Keefe getting the truth out to the public.
https://www.youtube.com/watch?v=XcNZtdsSXKs&feature=youtu.be
https://www.projectveritas.com/
American Pravda, WaPo: National Security Reporter Says Russia Story is “f*cking crap shoot…” and “Maybe it doesn’t exist, we haven’t found it yet.”
In this all new Project Veritas video, two Washington Post employees are caught on hidden camera expressing their biases and acknowledging that the Trump-Russia collusion…..
1st Christmas Mass in Mosul, Iraq since 2014
.
I… Secret Intelligence Service [ ISIS ] mercenary army of degenerates NOT pleased about this.
.
.
Steven Nabil
.
?Verified account @thestevennabil
.
The 1st Christmas mass in Mosul Iraq since June of 2014
When #ISIS took over the city, Mosul was completely liberated 5 months ago.
A huge win in the war against #isis and radical terrorism.
.
.
https://twitter.com/thestevennabil/status/944997184457515008