Nothing invites criticism quite like a column from an economist producing evidence, via facts and data, indicating that Ireland is not such a bad place. Critics on the hand-wringing left argue that Ireland is a neoliberal, fat-cat kleptocracy, while critics on the nativist right warn of a multicultural powder keg.
Both extremes have specific and legitimate grievances that represent real voter concern but the general picture in Ireland is far removed from the dystopia of the right and the left. The “Ireland is crap” brigade are way off the mark: Ireland is among the least unequal countries in the world, while the Irish tax and welfare systems, far from bolstering inequality, work the hardest in the world to redistribute income from the richest earners to the poorest.
Before taxes and transfers, Ireland is the 33rd most unequal country in the world, in a ranking where 35th is the worst position and first the best. After taxes and social welfare, Ireland is the 13th, moving in line with other European countries. The poorest people in Ireland, the 5 per cent at the bottom, are 63 per cent richer than the poorest people in the UK.
The evidence you are about to read serves to reinforce the need to fix Ireland’s housing crisis, which undermines the achievements of our economy and besmirches our society. If we fix housing, we fix almost everything, as most of the other heavy lifting has been accomplished.
The Financial Times’ economics journalist John Burn-Murdoch is incredibly skilled at explaining dense data in a visual and comprehensible way. He wrote a column last week about the levels of income inequality in the UK and the United States, concluding that the two countries displayed levels of inequality far exceeding those in other well-off countries.
This description chimed with my own experience in the UK. A few years back, having accompanied an under-13s football team (Cabinteely Boys) on a trip to Birmingham, I remember being taken aback by the poverty. Watching schoolboy football takes you all over Dublin — you get to see it all, including Cherry Orchard, incidentally, one of the great Irish schoolboy football clubs. Nothing compares to the urban poverty on view in Stechford, east Birmingham.
The Financial Times article trawled the data for disposable income, covering various income groups from the poorest to the richest people in a variety of countries. It found that the gaps between the richest and poorest were most stark in the UK and the US, which is not so surprising. Much of the economic and social policy pursued by both countries was designed to engineer such an outcome. Fascinated by such a comprehensive investigation, I asked Burn-Murdoch to send me the Irish data. The result is the chart above comparing Norway and Switzerland, the two best countries in which to be born either rich or poor, with the UK, US and Ireland, showing progress since 2005.
The way to read these charts is from left to right, noting the fifth percentile on the left is the poorest 5 per cent of the population; the 10th percentile is the poorest 10 per cent; the median is the income of the people right in the middle; the 90th percentile is the very wealthy top 10 per cent; and the 97th percentile is the uber-rich top 3 per cent.
Looking at the very richest first, the chart tells us that being in the richest cohort in Ireland, the UK or Norway puts you among the richest people in the world. These are Irish people who take home about €95,000 or more after tax. Only the Swiss rich are much richer. Being in the top 10 highest earners in the country also puts you in the extremely rich global club. As you can see, the American wealthy leave the rest behind. Interestingly, Irish wealthy people are wealthier than their UK counterparts, meaning they have more disposable income.
So far, so plutocratic. In terms of exposing myths and shibboleths, things get more interesting as we move towards the average. The people right in the middle in Ireland have 20 per cent more income, after tax, than the people in the middle in the UK, while the people in the middle in Norway, Switzerland and the US are richer. If you are in the middle in Ireland, your standard of living is about the same as the middle in most developed countries.
As we can see from the data, the poorest 10 per cent in Ireland rank well above the developed-world average and some 45 per cent above their counterparts in the UK, while the bottom 5 per cent of Irish earners have a standard of living which is 63 per cent higher than the poorest people in the UK.
As a rule of thumb, the gap between the richest earners and the poorest is about three times, the richest taking home about three times more than the poorest. In Ireland, the richest 10 per cent take home a little bit more than three times the poorest, as is the case in Norway. In the UK, however, the richest 10 per cent take home closer to six times the poorest. This gap, more than anything else, explains the fractious, divided nature of UK politics, where regional and social deprivation pushes people to extremes. Underneath all that pomp this week lies a very unequal country.
Socially, Ireland left the UK behind a long time ago. And although it seems natural to benchmark ourselves against our neighbours, such comparisons flatter to deceive; we should compare ourselves with other developed social democratic countries in the European Union. However, this UK and international data will be interesting for the coming debate on a united Ireland. As Northern Ireland is among the poorest region in an already poor UK, one shudders to think what the comparators might reveal.
As is always the case with statistics, the old expression “every statistic has an agenda” should be kept in mind. Quite apart from disposable income survey data, which is the standardised way of measuring international living standards, there is another series published by the EU called actual individual consumption or AIC. This attempts to measure consumption per head of public and private goods. On this measure, Ireland comes out below the EU average and is used by others to argue that the country is poorer than the disposable income data indicates. However, AIC is an average figure, meaning you add up everything and divide it by the number of people to get a per-capita figure.
This approach masks a problem with averages. For example, say you were drinking with your four friends and those at the table had an average pretax income of €50,000. If Denis O’Brien joined you (worth €3.2 billion, apparently), the average income of the table would go up to €640 million. You get the picture.
Also, as AIC takes in health provision, Ireland, with not only the youngest population in Europe but also the smallest old population because of outsize emigration until the late 1980s, consumes less healthcare. Furthermore, AIC does not capture the fact that Irish people save a lot more than the rest of the EU — 19.1 per cent compared with 14.5 per cent, meaning a full 4.5 per cent of income is not captured.
The evidence reveals that Irish standards of living are high relative to the rest of our peers and that levels of income inequality between top earners and bottom earners are far better than the UK and are on par with other EU countries. Our tax and welfare systems are highly progressive. But the big problem is housing. Unless Ireland faces down property interests and builds tens of thousands of homes at every price range, then all the good work will come to nowt.
What better incentive can there be to get our houses in order?
[deleted]
Thanks for sharing. It’s food for thought.
It’s off the mark alright. Calling Ireland “crap” is far too mild.
The ‘David McWilliams is a waffler, brigade’ are fairly spot on though.
Greatest country on earth, shit government though.
Sounds like Dave’s been lurking on r/Ireland!
Yes people are emigrating just to make us look bad and prove a point.
“So Mac, what should the people of ireland do?”
“Well John, I was speaking to my good friend who works in the ECB and he said that everyone in Ireland should stop spending money for 10years and see what happens, just dont eat, dont go to work and dont have any craic”
“Ahhh Mac but the punters need a few pints at the weekend hahahahhahahha”
“Ahhh john shtop yer killing me 🤣🤣🤣👌”
McWilliams playing all sides as he always does so he can point to whichever article was accurate and say told ye so
Our poor people are richer then the poor people in the UK is such a strange argument. I’ve lived in incredibly poor countries, countries where children routinely die because they get illness we can treat easily like diarrhea. Ireland is nothing like that. We have a level of safety and comfort that is incomparable. And everyone knows it.
But with housing costs, energy costs and inflation rising people are feeling more and more pressure and more stressed and knowing other people have it worse doesn’t help.
I have a good salary and I’m pretty good with money. I bought a house by myself. But I feel like I’m struggling at times. And I’m not going crazy with spending. I’m naturally a save. But as stuff goes up and up some months I feel like I’ve little left and I don’t feel like I can afford to treat myself very often.
And saying it’s all grand if we sort out housing ignores the fact that it’s been seven fucking years of a housing crisis and there is still no end in sight.
How in fuck would he know , he never leaves blackrock
Mcwilliams is not really a textbook economist but unfortunately we don’t live in a world where people are comparing quality of life across the EU. We are idealists who want what is best for us. If we feel uncomfortable people will demand more. They’re not deducing their relative prosperity. It doesn’t matter how many times you tell people how good it is. There’s loads of intangibles that aren’t measured. All countries have differences regarding expectations and what constitutes a good life. Ireland probably sees the good side of the United States more so than other countries like France which consider it a hellhole. We are more influenced by their brand of capitalism and what constitutes a good life.
We also don’t have an interesting enough country for people to cope with the costs. We are Ireland. It doesn’t square with us the situation as it is now. Eventually we will just accept that this is how it is and our expectations will adjust. Dublin if it continues will just be considered where rich people live and people will adapt with time.
I think housing is unfortunately unlikely to improve in the next 5-10 years as once the war is over and Ukraine starts to rebuild, the prices of building materials will skyrocket. There will also be money to be made by the construction workers and tradesmen who will flock to Ukraine for work.
Create a list of Td’s who rent two or more properties.
Ask voters to say come the election time would they vote for them
I believe action on the spiraling rents would be brought to a head.
> If you are in the middle in Ireland, your standard of living is about the same as the middle in most developed countries.
So… average Irish people are average for the developed world?
That’s not exactly a ringing endorsement. Especially in a developed world that’s going through an existential crisis.
Also, who cares for comparison to the UK. It’s turning itself into an emerging market. Finland/Denmark are better comparisons.
Agree with the point that in many ways it has improved (I too remember the 80’s and aspects of that time were existentially grim). But of course it could be better. Fix health and housing and it takes a quantum leap. But it rarely feels like those in power truly want to fix them- and why would they- things work just fine for them. I’d be delighted to see any new government manage to address these issues but at this juncture I just don’t see it. And, as more people are forced to emigrate, the very people who could help stimulate change are taken out of the system and the vote.
I agree but housing is such a big thing. If you are in your late 20s and 30s living with your parents, or in a massive house share or spending most of your money on rent then everything else in your life is on hold. Doesn’t matter how great everything else is when its overshadowed by the housing crisis.
Ya how many years have people like DMcW been saying “but we need to sort out the housing crisis” it kind of undermines his argument because of the country wasn’t crap this shit would have been sorted long ago
McWilliams and others need to stop pandering to the masses and instead attack them. Fine Gael and Fianna Fail are elected by the people, therefore it’s the people that are ultimately the problem. Go after them. Stick the knife in to them. Tell them a few home truths.
Change will only come about once these guys are out of office and in opposition. What we need (and is long overdue) is *radical* overnight intervention to solve the housing crisis.
* a ban on foreign buyers
* a ban on companies buying houses & apartments
* establishment of a rent history database, backdated a decade where renters can opt-in to the system which must be accepted by banks when applying for mortgages
* increased capital gains tax on housing, massive reduction in capital gains tax across all other assets
* increased property taxes for 2nd homes and holiday homes
Basically you want strong incentives for people to sell property and to make it very unnattractive as an investment. You almost want to punish people who use it solely for investment purposes.
I can’t argue with an economist about economics, but almost literally everyone I know under a certain age moved away. UK, Canada, Australia, Germany, Norway etc Why are people not staying if everything is grand? Why do the people from those countries not come here. It seems to me emigrants from way poorer areas of the world come to Ireland, while Irish emigrants go off somewhere better in the west. People don’t move based on an unfounded whingey opinion of Ireland. It can’t be “way off the mark” to that many people if they willing to pick up everything and move their life overseas, its not an easy endeavor.
21 comments
Nothing invites criticism quite like a column from an economist producing evidence, via facts and data, indicating that Ireland is not such a bad place. Critics on the hand-wringing left argue that Ireland is a neoliberal, fat-cat kleptocracy, while critics on the nativist right warn of a multicultural powder keg.
Both extremes have specific and legitimate grievances that represent real voter concern but the general picture in Ireland is far removed from the dystopia of the right and the left. The “Ireland is crap” brigade are way off the mark: Ireland is among the least unequal countries in the world, while the Irish tax and welfare systems, far from bolstering inequality, work the hardest in the world to redistribute income from the richest earners to the poorest.
Before taxes and transfers, Ireland is the 33rd most unequal country in the world, in a ranking where 35th is the worst position and first the best. After taxes and social welfare, Ireland is the 13th, moving in line with other European countries. The poorest people in Ireland, the 5 per cent at the bottom, are 63 per cent richer than the poorest people in the UK.
The evidence you are about to read serves to reinforce the need to fix Ireland’s housing crisis, which undermines the achievements of our economy and besmirches our society. If we fix housing, we fix almost everything, as most of the other heavy lifting has been accomplished.
The Financial Times’ economics journalist John Burn-Murdoch is incredibly skilled at explaining dense data in a visual and comprehensible way. He wrote a column last week about the levels of income inequality in the UK and the United States, concluding that the two countries displayed levels of inequality far exceeding those in other well-off countries.
This description chimed with my own experience in the UK. A few years back, having accompanied an under-13s football team (Cabinteely Boys) on a trip to Birmingham, I remember being taken aback by the poverty. Watching schoolboy football takes you all over Dublin — you get to see it all, including Cherry Orchard, incidentally, one of the great Irish schoolboy football clubs. Nothing compares to the urban poverty on view in Stechford, east Birmingham.
The Financial Times article trawled the data for disposable income, covering various income groups from the poorest to the richest people in a variety of countries. It found that the gaps between the richest and poorest were most stark in the UK and the US, which is not so surprising. Much of the economic and social policy pursued by both countries was designed to engineer such an outcome. Fascinated by such a comprehensive investigation, I asked Burn-Murdoch to send me the Irish data. The result is the chart above comparing Norway and Switzerland, the two best countries in which to be born either rich or poor, with the UK, US and Ireland, showing progress since 2005.
[graph](https://i.imgur.com/KKeF6Od.jpg)
The way to read these charts is from left to right, noting the fifth percentile on the left is the poorest 5 per cent of the population; the 10th percentile is the poorest 10 per cent; the median is the income of the people right in the middle; the 90th percentile is the very wealthy top 10 per cent; and the 97th percentile is the uber-rich top 3 per cent.
Looking at the very richest first, the chart tells us that being in the richest cohort in Ireland, the UK or Norway puts you among the richest people in the world. These are Irish people who take home about €95,000 or more after tax. Only the Swiss rich are much richer. Being in the top 10 highest earners in the country also puts you in the extremely rich global club. As you can see, the American wealthy leave the rest behind. Interestingly, Irish wealthy people are wealthier than their UK counterparts, meaning they have more disposable income.
So far, so plutocratic. In terms of exposing myths and shibboleths, things get more interesting as we move towards the average. The people right in the middle in Ireland have 20 per cent more income, after tax, than the people in the middle in the UK, while the people in the middle in Norway, Switzerland and the US are richer. If you are in the middle in Ireland, your standard of living is about the same as the middle in most developed countries.
As we can see from the data, the poorest 10 per cent in Ireland rank well above the developed-world average and some 45 per cent above their counterparts in the UK, while the bottom 5 per cent of Irish earners have a standard of living which is 63 per cent higher than the poorest people in the UK.
As a rule of thumb, the gap between the richest earners and the poorest is about three times, the richest taking home about three times more than the poorest. In Ireland, the richest 10 per cent take home a little bit more than three times the poorest, as is the case in Norway. In the UK, however, the richest 10 per cent take home closer to six times the poorest. This gap, more than anything else, explains the fractious, divided nature of UK politics, where regional and social deprivation pushes people to extremes. Underneath all that pomp this week lies a very unequal country.
Socially, Ireland left the UK behind a long time ago. And although it seems natural to benchmark ourselves against our neighbours, such comparisons flatter to deceive; we should compare ourselves with other developed social democratic countries in the European Union. However, this UK and international data will be interesting for the coming debate on a united Ireland. As Northern Ireland is among the poorest region in an already poor UK, one shudders to think what the comparators might reveal.
As is always the case with statistics, the old expression “every statistic has an agenda” should be kept in mind. Quite apart from disposable income survey data, which is the standardised way of measuring international living standards, there is another series published by the EU called actual individual consumption or AIC. This attempts to measure consumption per head of public and private goods. On this measure, Ireland comes out below the EU average and is used by others to argue that the country is poorer than the disposable income data indicates. However, AIC is an average figure, meaning you add up everything and divide it by the number of people to get a per-capita figure.
This approach masks a problem with averages. For example, say you were drinking with your four friends and those at the table had an average pretax income of €50,000. If Denis O’Brien joined you (worth €3.2 billion, apparently), the average income of the table would go up to €640 million. You get the picture.
Also, as AIC takes in health provision, Ireland, with not only the youngest population in Europe but also the smallest old population because of outsize emigration until the late 1980s, consumes less healthcare. Furthermore, AIC does not capture the fact that Irish people save a lot more than the rest of the EU — 19.1 per cent compared with 14.5 per cent, meaning a full 4.5 per cent of income is not captured.
The evidence reveals that Irish standards of living are high relative to the rest of our peers and that levels of income inequality between top earners and bottom earners are far better than the UK and are on par with other EU countries. Our tax and welfare systems are highly progressive. But the big problem is housing. Unless Ireland faces down property interests and builds tens of thousands of homes at every price range, then all the good work will come to nowt.
What better incentive can there be to get our houses in order?
[deleted]
Thanks for sharing. It’s food for thought.
It’s off the mark alright. Calling Ireland “crap” is far too mild.
The ‘David McWilliams is a waffler, brigade’ are fairly spot on though.
Greatest country on earth, shit government though.
Sounds like Dave’s been lurking on r/Ireland!
Yes people are emigrating just to make us look bad and prove a point.
“So Mac, what should the people of ireland do?”
“Well John, I was speaking to my good friend who works in the ECB and he said that everyone in Ireland should stop spending money for 10years and see what happens, just dont eat, dont go to work and dont have any craic”
“Ahhh Mac but the punters need a few pints at the weekend hahahahhahahha”
“Ahhh john shtop yer killing me 🤣🤣🤣👌”
McWilliams playing all sides as he always does so he can point to whichever article was accurate and say told ye so
Our poor people are richer then the poor people in the UK is such a strange argument. I’ve lived in incredibly poor countries, countries where children routinely die because they get illness we can treat easily like diarrhea. Ireland is nothing like that. We have a level of safety and comfort that is incomparable. And everyone knows it.
But with housing costs, energy costs and inflation rising people are feeling more and more pressure and more stressed and knowing other people have it worse doesn’t help.
I have a good salary and I’m pretty good with money. I bought a house by myself. But I feel like I’m struggling at times. And I’m not going crazy with spending. I’m naturally a save. But as stuff goes up and up some months I feel like I’ve little left and I don’t feel like I can afford to treat myself very often.
And saying it’s all grand if we sort out housing ignores the fact that it’s been seven fucking years of a housing crisis and there is still no end in sight.
How in fuck would he know , he never leaves blackrock
Mcwilliams is not really a textbook economist but unfortunately we don’t live in a world where people are comparing quality of life across the EU. We are idealists who want what is best for us. If we feel uncomfortable people will demand more. They’re not deducing their relative prosperity. It doesn’t matter how many times you tell people how good it is. There’s loads of intangibles that aren’t measured. All countries have differences regarding expectations and what constitutes a good life. Ireland probably sees the good side of the United States more so than other countries like France which consider it a hellhole. We are more influenced by their brand of capitalism and what constitutes a good life.
We also don’t have an interesting enough country for people to cope with the costs. We are Ireland. It doesn’t square with us the situation as it is now. Eventually we will just accept that this is how it is and our expectations will adjust. Dublin if it continues will just be considered where rich people live and people will adapt with time.
I think housing is unfortunately unlikely to improve in the next 5-10 years as once the war is over and Ukraine starts to rebuild, the prices of building materials will skyrocket. There will also be money to be made by the construction workers and tradesmen who will flock to Ukraine for work.
Create a list of Td’s who rent two or more properties.
Ask voters to say come the election time would they vote for them
I believe action on the spiraling rents would be brought to a head.
> If you are in the middle in Ireland, your standard of living is about the same as the middle in most developed countries.
So… average Irish people are average for the developed world?
That’s not exactly a ringing endorsement. Especially in a developed world that’s going through an existential crisis.
Also, who cares for comparison to the UK. It’s turning itself into an emerging market. Finland/Denmark are better comparisons.
Agree with the point that in many ways it has improved (I too remember the 80’s and aspects of that time were existentially grim). But of course it could be better. Fix health and housing and it takes a quantum leap. But it rarely feels like those in power truly want to fix them- and why would they- things work just fine for them. I’d be delighted to see any new government manage to address these issues but at this juncture I just don’t see it. And, as more people are forced to emigrate, the very people who could help stimulate change are taken out of the system and the vote.
I agree but housing is such a big thing. If you are in your late 20s and 30s living with your parents, or in a massive house share or spending most of your money on rent then everything else in your life is on hold. Doesn’t matter how great everything else is when its overshadowed by the housing crisis.
Ya how many years have people like DMcW been saying “but we need to sort out the housing crisis” it kind of undermines his argument because of the country wasn’t crap this shit would have been sorted long ago
McWilliams and others need to stop pandering to the masses and instead attack them. Fine Gael and Fianna Fail are elected by the people, therefore it’s the people that are ultimately the problem. Go after them. Stick the knife in to them. Tell them a few home truths.
Change will only come about once these guys are out of office and in opposition. What we need (and is long overdue) is *radical* overnight intervention to solve the housing crisis.
* a ban on foreign buyers
* a ban on companies buying houses & apartments
* establishment of a rent history database, backdated a decade where renters can opt-in to the system which must be accepted by banks when applying for mortgages
* increased capital gains tax on housing, massive reduction in capital gains tax across all other assets
* increased property taxes for 2nd homes and holiday homes
Basically you want strong incentives for people to sell property and to make it very unnattractive as an investment. You almost want to punish people who use it solely for investment purposes.
I can’t argue with an economist about economics, but almost literally everyone I know under a certain age moved away. UK, Canada, Australia, Germany, Norway etc Why are people not staying if everything is grand? Why do the people from those countries not come here. It seems to me emigrants from way poorer areas of the world come to Ireland, while Irish emigrants go off somewhere better in the west. People don’t move based on an unfounded whingey opinion of Ireland. It can’t be “way off the mark” to that many people if they willing to pick up everything and move their life overseas, its not an easy endeavor.