|
The
Needs and Wants in a Reunited Ireland
Ireland is not alone in its struggle to find a sustainable balance
between the needs and wants of its people, or, in other words, how
to create a fair and equitable society. Granted, it’s not an easy
task in democracies with loosely regulated capitalist systems that
permit unchecked private ownership of wealth while also tolerating
homelessness, hunger, and enforced deprivation.
Human Rights and Social Needs:
Meeting the needs of people in distress within a democratic society
entails a complex balancing act amid numerous challenges. However,
there is one core principle that must always come first: an
individual’s human right to shelter, food, and clothing, and in
modern societies, education and healthcare. The question is: how
much of this responsibility should rest with the individual, and how
much with the government?
On the other hand, controlling people's wants in a democratic
society is fraught with contradictions, including the need to
protect economic freedom to prosper and accumulate wealth while
preventing national wealth from becoming excessively concentrated at
the top tiers of society. The goal of economic freedom should not be
a society of haves and have-nots. That being the case, how much of
the national wealth should any individual control, and when is it
time to say to the hoarders of wealth, enough is enough?
These are the issues that must be addressed if social cohesion and
economic equity are to be achieved and maintained in the future,
whether in a divided or a reunited Ireland.
Living Wage versus Minimum Wage:
Currently, considerable emphasis is placed on a living wage as a
solution to many of society’s ills and shortcomings. To date, no
country has enacted meaningful living-wage legislation. Several
countries have toyed with the idea, while others have discussed it.
Countries that have narrowed the gap between the minimum wage and
the living wage generally provide a higher quality of life for their
citizens and experience fewer social ills and discontent.
In Ireland, the living wage is a cost-of-living estimate based on a
39-hour workweek for a specific location, intended to provide
workers and their families with a decent standard of living and a
pathway to economic security. The calculated living wage for 2024
was €14,80 per hour. The calculation included the costs of
food, housing, healthcare, education, transportation, and clothing.
The government's reluctance to legislate for a living wage stems
from concerns about caveats, including burdens on small businesses,
outsourcing by large companies, higher costs of goods and services,
reduced employment, increased activity in the underground economy,
and reduced tax revenue. Still, in a well-managed economy,
governments can offset many of these adverse effects with tax and
other financial incentives.
In Ireland, the minimum wage is a government-mandated rate that is
adjusted annually in line with the Consumer Price Index. The set
rate for 2024 is €12.70. The rate is reduced by 10% for individuals
under 20 years of age in each age bracket, down to 17 years. About
190,000 workers out of a total workforce of 4.72 million earn
minimum wage. When first introduced in 2000, the rate was
€5,85 per hour. Adjusted for inflation and changes in living
costs, the real increase from 2000 to 2024 was only 31%, or €1,75.
The minimum wage is not a mandate to eradicate poverty, although it
helps lessen its effects. It’s a mandate that applies to all
employers and workers across all sectors of the economy. Its purpose
is to prevent the exploitation of workers by unscrupulous employers
who, if given the chance, might withhold wages, require employees to
work extra hours without pay, or engage in other dishonest practices
to cheat workers.
Poverty versus Deprivation:
Although the minimum wage does not target low-wage workers
specifically, they are the group that benefits the most from its
implementation. They are also the group most likely to fall into one
of the following poverty categories: 1) the 899,000 who experience
enforced deprivation, 2) the 700,000 who are at risk of poverty, and
3) the 185,000 who live in persistent poverty.
According to the Central Statistics Office, “People are defined as
experiencing enforced deprivation if they live in a household that
cannot afford two or more of the 11 basic deprivation items that are
considered to be the norm for other households in society.”
Poverty in all its forms, including enforced deprivation, is not
confined to poorer neighborhoods or remote rural areas. It has
infiltrated middle-class neighborhoods due to the high cost of
living, which is compounded by the need to maintain a decent quality
of life. As a result, many middle-class families experience some
form of enforced deprivation as described above. If decisive
government action is not taken to address the root causes, the
economic mobility curve for the middle class will reverse and begin
to trend downward.
Tax System Inequities:
As discussed in several other articles in this publication, the tax
code needs an overhaul to address disparities in the system. The tax
burden on the middle class appears disproportionate to that borne by
wealthy individuals, who seem to avoid paying taxes commensurate
with their income and wealth. This disparity is due to tax loopholes
available only to the wealthy, which allow for the unchecked
accumulation of wealth.
Wealth Accumulation Limits:
One might assume that in a country where poverty is much higher than
it should be, there would be a limit on how much wealth individuals
can accumulate to promote a more equitable distribution of the
nation's wealth. There must come a time when restricting the wealth
of the top tier and redistributing a greater share of national
wealth to the working and lower classes, many of whom are struggling
to make a living, becomes necessary. If setting a limit on wealth
accumulation is the only way to create a more equitable society, it
must be implemented carefully and responsibly to ensure that it does
not hinder entrepreneurship or the right to fair compensation for
hard work, innovation, or prudent investing.
Multinational Enterprises' Economic Impact:
The disproportionate influence of multinational enterprises (MNEs)
on the Irish economy is concerning and poses a hidden threat to the
overall economy's viability. According to the Central Statistics
Office. -
-
Only about 3% of enterprises in Ireland were owned by foreign
MNEs in 2022.
-
These enterprises accounted for 71% of the total turnover (€921
billion), 74% of Gross Value Added (GVA) (€301 billion), and 27%
of employment (623,128 people) in the Irish business economy.
-
The impact of enterprises owned by foreign MNEs was particularly
notable in the Industry sector, where they made up 88% of
turnover, 87% of GVA, and 48% of employment, despite comprising
only 5% of enterprises in the sector.
In the past, successive governments convinced themselves that
attracting MNEs to Ireland was sufficient to build a robust and
resilient economy. They should have realized long ago that MNEs are
the proverbial icing on the cake, not the cake itself. A withdrawal
of MNEs due to export tariffs or other reasons beyond the
government's control would be disastrous for the Irish economy and
the individuals affected. Such an event would likely increase
poverty rates and, if severe enough, lead to social unrest.
In an era of uncertainty, as the world order shifts rapidly due to
the rise of homophobic populism and anti-globalization that stress
economic and military alliances, Ireland could easily find itself
caught in the middle of unwanted global trade realignment and
protectionism. Ireland's overdependence on MNEs to drive its economy
stems from a lack of vision, misplaced political hubris, and
economic ignorance among government planners.
The Need for Domestic Economic Development:
what should have been done and what needs to be done now are one and
the same. Successive governments, in their haste to attract MNEs to
Ireland, overlooked the importance of building a strong, broad-based
domestic economy to mitigate the risk that MNEs would withdraw in
response to external economic forces. The lack of sound financial
planning is a serious vulnerability that Ireland must now address if
it wants to survive the impacts of economic events beyond its
control; otherwise, it risks falling back into an economic mess
similar to the one before the European Union era.
There is no quick or easy solution to the dominant role MNEs have in
the Irish economy. The best approach at present is to offer MNEs a
stable, welcoming, and business-friendly environment, along with a
highly educated and skilled workforce.
To ensure long-term sustainability, the government must develop a
new plan that preserves the current economic system while fostering
a robust, self-sufficient domestic economy that can operate
independently of MNEs. To achieve this, the government should
establish an agency similar to the IDA or redirect the IDA’s mission
to lead the expansion of existing domestic businesses and to
identify and finance the development of new high-tech enterprises
focused on 21st-century needs. Moving forward, MNEs should take a
backseat to domestic enterprises.
In addition to that essential mission, the government must update
its agricultural policy to boost exports and reduce imports in a
manner that is less environmentally harmful than the current system.
It also needs to ensure food self-sufficiency as a safeguard against
climate change or supply chain disruptions. Overall, Ireland must
shift toward a foundational economy.
Tax Reform and the
Living Wage:
In the envisioned
Federal Parliamentary Republic advocated in this publication,
eliminating wealth and income inequality is not a minor issue;
it is a core priority. The Republic’s legitimacy would depend on its
ability to ensure dignity and opportunity for all citizens, not just
the privileged few. A comprehensive revision of the tax code would
include:
-
Targeting accumulated assets above a high
threshold would ensure that those who benefit most from the
economy contribute proportionately to its sustainability.
-
The tax burden would be recalibrated to ease
pressure on middle-class families, who have long borne a
disproportionate share of fiscal responsibility.
-
Loopholes and evasive practices would be
closed, ensuring that corporations and high-net-worth
individuals pay their fair share.
The minimum wage would be replaced by a living
wage, calculated to reflect the actual cost of living in different
regions across the country. To lessen the financial burden on
employers, especially small and medium-sized businesses, the living
wage legislation would include:
-
Targeted tax
incentives: funded through revenue from the wealth tax, these
incentives would help offset higher labor costs.
-
Social savings
reinvestment: As fewer people rely on state assistance, the
savings generated would be reinvested in public services and
infrastructure, creating a sustainable cycle of empowerment and
growth.
Urgency of Reform:
Relying heavily on MNEs for government funding and high-paying jobs
is advantageous but also poses risks. In a reunified Ireland,
balancing the benefits while minimizing vulnerabilities would be a
key focus.
These issues should not wait for a reunited Ireland. They are urgent
matters that require immediate attention and resolution to prevent
social unrest or, worse, social conflict.
|
