Economic changes leaving majority behind, Begg says

Former Ictu head tells MacGill summer school top 10% now takes 34% of all income

David Begg said the top 10  per cent of people were now taking 34 per cent of all. Photograph: Aidan Crawley/The Irish Times

David Begg said the top 10 per cent of people were now taking 34 per cent of all. Photograph: Aidan Crawley/The Irish Times

David Begg

tank Tasc, has said.

The former general secretary of the Irish Congress of Trade Unions was speaking at a session of the MacGill Summer School yesterday titled Inequality: Is there any answer? .

Dr Begg said that the problem was not just that the rich are getting richer, but also that we were failing to tackle poverty and that a changing economy was leaving the majority behind.

“We can see this problem in the growth in precarious work – like zero-hour contracts, for example – and the hollowing out of the labour market in a way that destroys formerly good middle-level jobs,” he said.

“This is a long-term trend made worse by a change in the balance in power between capital and labour, which can be traced to the entry of China to the global marketplace and the collapse of the Soviet Union.”

These events, Mr Begg said, added 1.5 billion new workers to a pre-existing industrial workforce of 900 million.”

The issue of low pay was particularly relevant in Ireland, he said, where the inadequacy of universal public services and high charges for services such as GP visits, childcare and eldercare – along with a cost of living that was 20 per cent higher than the EU average – meant cash income was even more important.

“Low pay is a feature of rising inequality.” he said. “While average incomes in Ireland in real terms have more than doubled since the 1970s, the average for the top 10 per cent has tripled and for the top 1 per cent it has gone up five fold.”

Top 10

per cent

Ireland is now the most unequal country in the OECD in market income, he said.

“As a result of our social protection or welfare system, Ireland moves from being the most unequal to around the average in terms of economic inequality,” he said. “However, as economic inequality rises it is going to become unsustainable for our welfare system on its own to tackle this problem. This is why it is so important that we increase wages while retaining the level of welfare expenditure.”

Dr Begg commended the Government’s work in establishing the Low Pay Commission and in introducing legislation to underpin the collective bargaining system.

He said the dominance of the European Central Bank and the narrowness of its remit was “a catastrophic flaw in the institutional architecture of European Monetary Union”.

Undermining labour

Federal Reserve

The issue in Europe, he said, “was that the ECB’s policies were “actively undermining labour market institutions, which in other circumstances might give better outcomes.

“To be specific, labour market ‘reforms’ and ‘flexibility’ are euphemisms for undermining collective bargaining systems and destroying working conditions built up over decades, and they should be called out for what they are.”

The research and policy body Tasc is funded by philanthropic funding from Atlantic Philanthropies and the Joseph Rowntree Charitable Trust.