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THE RICH ARE getting richer. For everyone else, there’s no such luck.
That’s the message from economist David McWilliams in Ireland’s Great Wealth Divide, a new documentary that airs on RTÉ One tonight at 9:35pm.
The programme sees McWilliams challenge austerity and its great promise of trickle-down economics, explaining how and why Ireland’s rich-poor divide has widened so drastically in recent years.
The recession has been challenging for everyone, he says, but those with assets and influence have fared remarkably better than the rest of us.
McWilliams argues that neoliberal economic policies have seen wealth transferred from the poorest to the better off, and that this concentration of wealth is reversing social mobility at a faster pace than many assume.
This is what you can expect to hear if you tune in tonight.
Incomes have stagnated over the past seven years.
The income of those who make money exclusively from shares and assets, though, has gone up by 500% since 2008.
Multinationals located in Ireland are paying very, very little tax.
American corporations based here make $970,000 profit per employee every year, according to the US Bureau of Economic Analysis, but they only pay $25,000 tax per employee on these profits.
If they were to pay only twice as much tax per employee, McWilliams points out, they’d still be making over $900,000 dollars profit a year.
Ireland is significantly more unequal than we think.
The consensus from a Red C poll of 1,000 people commissioned for the documentary was that Ireland’s richest 20% had 60% of the country’s wealth and that the poorest 20% have 11%.
The reality? The most affluent 20% in Ireland actually own 73% of the country’s wealth and the poorest 20% own just 0.2%. As for the top 5%, their combined wealth is nearly double that of the entire “squeezed middle”.
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I know of one FF councillor who with the thanks to his fellow FF councillors has made in excess of €10 millions by rezoning land from agricultural to industrial and back again to agricultural when it suited. That will not be mentioned in tonights program. I would suggest this practice is common around the country.
We are a corrupt society…..but like McWilliams…..his science is flawed. There should be some values on what he is classifying as poor, middle and wealthy/rich……..
That comment didn’t make a lot of sense Maire. Also, I doubt he pulls these figures out of his behind. I’m not an economist but I’d imagine they have a rational methodology for differenciating between economic classes. You’d need to show McWilliams doesn’t follow it to have a point.
I know 5 electricians who will give 2 different quotes for every job. There’s a cash price you see…
Let’s not act like only those at the top are cute h00rs.
Par for the course mickmc, a FF councillor, former TD and Minister, changed the county plan after the closing date for public viewing, to allow a new road to pass through his land. This could not have been done without the knowledge of councillors and officials. In a separate incident, a sitting FG Senator’s constituency running mate has been removed, supposedly voluntarily although he had never given any indication of this, quite the opposite, from the ticket, to allow this former minister’s son a free run. This is the standard of politicians in our republic.
Exactly Maire, like a doctor diagnosing the sickness without perscribing the cure just compounds the illness.
Like shopping in five different supermarkets to see which is the cheapest instead of shopping more economically, or five petrol station to get the cheapest petrol instead of getting a car which uses less petrol per km or making fewer journeys.
The scale is somewhat different though Máire. Plus the fact, should you report any or all of these electricians to Revenue, there is a good chance they will be investigated and prosecuted. That is not the case with the likes of politicians and big business. Have you missed the last few years?
Apologies, should have been addressed to Ciaran.
Globally-speaking, Credit Suisse define the top 1 percent as those who have: Assets – Debts >/=$80,000. How that fits into McWilliams’ Ireland, I do not know. That aside, I share the frustration voiced elsewhere here, of having the problem elucidated without a solution being proposed. Clearly, Political & banking corruption has been a problem yet we have not brought anyone to account. It took water to get some folk onto the streets. The Dept. Of Social Welfare could have used a proper ID mechanism, tied to passport usage to identify social welfare tourism years ago, yet failed to do so. And, many of our own work in the black economy while drawing welfare payments. Whether through action or inaction, we are all part of the problem.
The top 1% have assests-debt of > $80,000? Surely you’re missing a zero there – $800,000? Otherwise my working class parents would easily be in the top 1%. They have no debt, own 2 houses and would have a good amount of savings of over €100K.
Their secret? Incredibly frugal living… especially my mother.
16 years in the same job and worse off now than 7 years ago. And I class myself as one of the lucky ones!
Why lucky?
probably when he complains about work and wages he’s told ” lucky to have a job”
Lucky that I have a job that actually pays a decent wage.
So you’re moaning for the same of it.
moaning because someone would expect to earn more after 16 years, not less
Most of those who emigrated from Ireland during the crash were not the unemployed but those with jobs. This is a country where people who earn €32,000 a year are regarded as super-rich and taxed accordingly. This is needed to fund, amongst other things, an annual 20 billion Social Welfare budget which accounts for 40% of all government expenditure. Is it any wonder that we can’t recruit any of the thousands of Irish nurses and doctors for our own health system? We have an unequal society because government implements policies that make society unequal. The Irish political system is crowded in the middle with social democrat do-gooder types who constantly preach about equality but implement policies which militate against hard work and enterprise.
Brought to you by courtesy of Fianna Fáil topped by their even more facist doppelgängers Fine Gael.
But if the incomes of those who make their money from money has risen 500% since 2008, surely FG should be to blame?
Nothing changed and their policies actually made for a more unequal society.
Sick and tired of all this bullshit ireland is a deeply divided society according to wealth distribution the root cause of this is brown envelopes/you scratch my back and I’ll scratch your shyster politics. this won’t change until we vote in people other that the 3 main mafia parties. Wake up Ireland you’ve been asleep long enough.
And still people say we should not introduce a 48% tax rate for over 100000 or increase corporation tax to 15%.
Begrudgery is never far below the surface in this country, even at local level where people are involved at trying to create a better place to live.
The higher band is 40%, plus USC7% plus PRSI 4% which gives an effective rate of over 50%, so there’s no need for a ’48%’ rate.
@mer no it doesnt when you factor in tax breaks and the portion of income paid at the lower rate it gives those earning over 100000 an actual income tax +usc + prsi tax rate of about 25% if you add on indirect taxes this comes to just under 30% which is only 2% higher the direct plus indirected taxes paid by the lowest group of earners and 8% higher than average wage earners.
Where can one find out about these magic tax breaks only high earners seem to be able to get?
@justin most of the figures i quoted can be found in here
http://www.tasc.ie/publications/tasc-a-defence-of-taxation/
I recall McWilliams making fun of Fintan O’ Toole on the Dunphy Show for suggesting Ireland had a right-wing ideology. Good to see him come round to Fintan’s point of view.
@Fifty – All Irish parties are on the left to varying degrees. There are no conservative or libertarian parties in Ireland. We are a socialist state pretending to be otherwise.
I hope you are not using america as a benchmark for that analysis!!
Are you completely mad, dude? Did you even read the article before looking for people to pick arguments with?
@Fifty – I was responding to your comment which was implying that Ireland is a right wing state – which it is not by the way.
@Hidden revolt – When the government is interfering in every aspect of people’s lives and stealing all their wealth so as to redistribute it to others – I think that pretty much sums up the definition of socialism by its own benchmark.
Erm… the aim of socialism is to take wealth from the RICH and redistribute it to the POOR…the exact opposite of what has been happening for the last 7 years as all these statistics show.
@Fifty – it well may be its aim in theory – however it works out in practice quite differently. Nonetheless, all that matters is for it to be stolen from some, so that it can be distributed to others, in order for it to be classed as socialism.
No, Dude, though Bertie Ahern did claim to be socialist, not that he would know the meaning of the word! Socialism in even its mildest form died the moment Labour got into bed with Fine Gael. Ireland is in fact very right wing, with Fine Gael being even more right wing than Fianna Fáil (if that was possible). By no stretch of the imagination is any Irish government left wing.
Is that why we are living in a welfare state Mary?
Dude, have you read Marx? Or is your opinion, like so many others, based off American pop culture and Cold War red phobia? We’re living in a welfare state because we allowed ghetto areas to develop in inner city regions, reduced educational opportunities for the poor, decided foreign direct investment was a better option than funding local entrepreneurship, refused to regulate banks, gave out loans without any regard to the pre-liquidity ratio, then bailed out said banks after the system finally crumpled. That is fairly straight-forward Neoliberalism.
Shows up FG/Lab much vaunted stability for what it is – only good for a small % at the top and bad for the vast majority of people. The recovery has not been fair.
If the people are stupid enough to vote for them then they deserve the society they get.
@kevinmunster,
The big worry is what you said there about stupid people deserving the society they vote in, this may come to be, like when the Greeks voted in Syriza who then proceeded to totally ruin what was left of their economy and banking system, they are many times worse off now than before Syriza got power. The same could happen here, I have absolutely no confidence that the so called far left parties here could continue with our (delicate) economic upturn, they still want to burn bankers & bondholders yet would still need to borrow tens of billions a year from them! and at what interest rate! There’ll be no water tax, no bin charges, no property tax, no usc, there’ll be massive increases in spending on health, housing, social welfare & education, but where will all the money for this party come from? It’s nonsense. If the current government can’t manage to raise enough money for all this extra spending (which I’m sure they would love to do) then I can’t see the looney left doing it:)
Well almost €8 Billion would come from not paying annual profits (interest) to the banking industry and the American corprations could easily pay more tax, Apple owes how much?
Not being funny, but there’s plenty of money to be made from docking their salaries and pensions, taking more tax from the rich, American multinationals and back from bond holders. Also, basic Leaving Cert economics: you can’t tax your way out of recession. If people have no money to spend, there won’t be any economic activity. Sadly, you need to bite the bullet, spend money you don’t have and wait. It’s their own fault for landing us in this mess in the first place.
Ireland is right wing
Nothing surprising there and I’m sure the blue shirts are delighted
@seamusgrant,
This reference to blue shirts is one of the laziest comments that is regularly used on Journal comments, it is meaningless in this day & age, it gives no strength to any argument.
@James That’s something a blue shirt would say
@goonforlife
Thank you, you’ve proven my point.
This is not news or new, in every single country where there has ever been an economic disaster (like here) or a recession, anyone that is lucky enough to have money left during it has huge buying power compared to normal times, this is basic economics, not new groundbreaking thinking.
Lucky?? These recessions and economic disasters you speak of are engineered by those with money in order to sifle more money from those who have the least.
@goonyforlife,
I don’t believe the economic downturns/recessions are “engineered by those with money” as you suggest, or how do you know this? I think you may be watching too many Austin Powers type movies to believe this actually happens.
Watch the doc “Inside Out” it gives a comprehensive analysis of what caused the 2008 global crash.
@goonforlife,
‘Inside Out’ is not a documentary, it’s a kids movie.
Documentaries are made all the time by people coming from a certain viewpoint and so made to show something from their angle, another doc could be made of the same issue showing another viewpoint. Documentaries are not necessarily the truth.
If you want to know how our problems are ‘engineered by the rich’, you need to understand three basic principles. First, is the Fear of Falling Principle. If you have more money than you will ever spend in your lifetime, a bank account with billions of dollars in it, every luxury imaginable, you still fear losing any of this money you will never spend. You get everything you want, you want more. Because money is power, and those with money create jobs, spend millions in lobbying and know who’s corrupt enough to be bought in governments, they can largely influence policy to their advantage. With a global society, they can also take advantage of cheap labour in one country and cheap taxes in another; think factories on the US/Mexico border. This has caused a shift in global income trends over the past two decades. During the 1990s, we had the champagne glass divide, where the top 10% of income holders held 50% of the world’s wealth. This has shifted to a graph which now resembles very uncomfortable underwear, where that 50% of the world’s wealth is held by a mere 80 individuals, or .000005% of the world’s total population. Income gaps have not been this high since the peak of the industrial revolution, when the welfare state had to be created to avoid Proletariat uprising. To understand how this has been allowed to happen by people, I’ll give you a curious anecdote from colonial Africa. During colonial times, European superpowers decided to create a hierarchy out of the Tribal system. They would make one tribe superior, and give them a small proportion of the wealth. To the Europeans it was leftovers, but it was considerably more than fellow Africans would have had. As a result, even though they were only been given such a tiny fraction of the wealth being earned in their country, these upjumped tribes would align themselves with their European masters, and would micromanage their own countrymen for them. This is essentially what is happening in our society, the richer the person the more likely they are to identify with ruling elites over the poor, even though their actual income levels are more comparable with those of poor people. They vote in conservative/neoliberal governments, support tax breaks for the wealthy and sign up to clearly false ideologies such as trickle-down economics, or that our society is meritocratic. This system is inevitably unsupportable. Not only because the growing poor become incredibly angry, but only on the environmental level, because the rich overconsume, the poor overpopulate and the aforementioned fear of falling principle causes ruling elites to instigate ‘treadmill-based production’ (or environmentally unstable production) to produce more product, ergo more profit.
FG and Labour don’t care about this as long as they can stuff their pockets enough while in power to weather the next few years until it’s time to feed at the trough again.
@Alcal,
You shouldn’t judge others by your own standards. Most of this government are normal people with families, friends, sick relatives etc, like the rest of us, I’m sure there is nothing more that they would like to do than to improve the lives of their fellow countrymen, family, friends etc, it would also help them to get re-elected, so why aren’t they? Because we don’t have the money, in case you hadn’t noticed, we’ve been tru the worst financial crises to ever hit this country and the world, there ain’t enough money to round yet.
james….if FG had done what they’d said they’d do with regard to Anglo/IN we’d be €2 billion a year better of for the next 40 years. The threw our money into a big private pit with no thought to their fellow countrymen. We have money…….it’s just rather than deal with inefficiencies in the public sector they prefer to create quangos to see what the problem is and then shelve the results because fixing might be tough.
@Alca
You’re right, both FG & Labour had said they would do more before they got into power but the realities of dealing with it all was a lot tougher than they expected, there were/are no simple solutions to it all, I believe they tried to make the right decisions for the country, I think they have played the markets well to get our interest rates so low for borrowings and also to push out the bailout repayments (it will always be pushed out).
Reforms have started in the public sector but the unions should be the ones blamed for the slow pace of reform.
It would seem WE DO have lots of money still? Always have had this money, even throughout the recession? As Vinnie Browne always says – we are still a very wealthy country.
This wealth, while not equally spread, is out there amongst alot more people than you think.
Lots of people seem to compartmentalise their savings relative to their debt and their perceived wealth . Almost like the savings dont count when deciding whether one is rich or not. Ones richness based on weekly/monthly earnings only, excluding any deposits or assets owned.
“Irish private-sector deposits increased during the period, with household deposits accounting for 54 per cent of the €175 billion recorded at the end of July 2015.”
Yes thats 54% of €175 BILLION on deposit by Irish People … €94.5 BILLION ( not sure if this includes cash on deposit in Post Office, Credit Unions etc .. That figure I think bumps up to close on €116 Billion with these included ..
Hardly surprising…Fine Gael ARE in power!!
This is nothing unique to Ireland all first world developed countries have the same wealth spread. I would agree though that the gap is widening but across all developed countries. The common test is average company salary v ceo salary. Not knowing the facts it has gone from something like 4 to 12 times to difference showing that the top are increasing their income levels when income for the middle has remain the same
We as a people are to docile. We accept this outrageous behaviour of the elite. We need a government to put fairness in society. Have a think ….
Thats why Im such a big fan of Bernie Sanders in the US.
What’s the average wage now in Ireland?
If in 2008, a record slump in the history of share prices, I was paid a measly fiver in dividends, and last year the shares paid 30 euros for the whole year, that’s a 600% increase.
If the shares had only paid 50c in 2008, that’s 6,000% of an increase!
The top chart gives very little information by using 2008 as a base line.
Financial Predators free to extract the wealth from those who create it …
- Landlords who max your Rent
- Banks who max your Debt
- Political Parties who max your Tax ….
Voters need to bring their brains to the Polling Booths …
Everyone knows that Ireland is like this. If the people wanted change they would vote in left wing partys.
We did, KevinMunster. A lot of us voted Labour, which was supposed to be a left wing party. Look how that turned out. Joan Burton makes Margaret Thatcher look like Mother Theresa.
American companies and other job providers are not the cause of unequity in this country, it is the low levels of tax and money management that need to be looked at to make this country more socially accountable like councilsbeing able to use the property tax money in their own regions.
a new documentary that airs on RTÉ One tonight at 9:35pm.
>9+3+5 = 17
Prove it.
And what is the significance of the number 17?
If it was about tax then the poor wouldn’t be getting poorer, it is about using people as money fodder, that is what the E.U. is really about, corporations like financial services using people as fodder or their money really by U.S. companies normally.
@michealsands
Can I guess that you believe a lot of conspiracy theories? The members of corporations and governments that people think are involved in these conspiracy theories are not actually as smart as you think, they would not be able to manage the control that’s suggested by some.
No, I go by reliable and trusted news articles as from the BBC, Guardian newspaper, Irish Independent, Newscientist, etc etc… those sources.
Conspiracy theories seem to be used only to confuse people and by people who just want them to be true in order to say that what they believe themselves is right? You find that conspiracy theories are also called Black Propaganda which the U.S. and U.K. authorities are good at doing as well…
What is the force behind corruption and the answer is greed… Greed is the force behind lobbyists as well.
While ye all go on about using your brains during elections,what do we mayo people do?…our choices are,Fine Gael,Finna Fail,no labour, Shin Fein,that’s it…no renua,no pbp,no independants of value,….64,000 people in mayo…same in Sligo,letrim,Roscommon,its only Dublin that has a choice….
Any bets its a rip off of Robert Reich’s in Inequality for All (2013) .
Here is a link to the original for info:
http://www.imdb.com/title/tt2215151/
Capitalism
David McWilliams piece is interesting but he makes too many excuses for the gangsters and capitalists in Ireland and abroad. Beware of Capitalists in sheep’s clothing trying to make out that is THEY only shared everything would be Ok well you cannot barter with liars murderers and crooks
Capitalism is a total failure I remember the old days when people shared I did it when we come in on the boats from a days fishing and people would meet the boats and you would share a few fish or the farmer whould share his crop or people worked together.
Greed has destroyed the Earth the affects of the global warming is already being felt in the Pacific rim where Islands are getting swamped by seas. In Papua New Guinea the crops are failing and rotting in the ground just like they di in Ireland 160 years ago and people are leaving their lands starving.
They have destroyed the village and farms stolen the water from the village pump and generally screwed the world.
We no longer grow our own food so they can switch the source anytime they want
They stole and control our water electricity oil gas and fuel
Now the thousands of homeless will fill our streets and be dying in the ditches again because people have been asleep and allowed it to happen
My Brother in law was telling me about pollution in the seas 40 years ago and now the crooks are lining up the TPP to totally finish off the planet. We are heading for total disaster as the seas warm and the fish die this mans message is that capitalism is good is a load of rubbish greed has destroyed the earth its not going to destroy the earth it has already. The next two years are to be the hottest in modern world history
I’d seriously doubt that David McWilliams refers to himself in this type of programme but he charges plenty for his ‘courses’ and ‘wisdom’. People in glasshouses……..
There is no silver bullet. Increased taxation on the top= personal and corporate, incentives to invest in a productive manner, stronger regulation of banks/financial institutions, an increase in the pocket of those at the bottom…
All this and more will help to A) slow the formation of bubbles b) protect the people from bubbles bursting c) create real growth and employment.
Income inequality does not fix itself. Government’s must have the political will to leash capitalism. – Not a socialist utopia, but a set of measures to control the wealth and it’s distribution in the state.
have your say