At this time of year, it behoves us all to think about what really matters - money. As the Christmas shopping festival gives way to the post-Christmas sales, we should perhaps pause to contemplate our odd relationship to cash, writes Fintan O'Toole.
We devote most of our waking hours working to get hold if it and most of the rest getting rid of it. And in a more general way, we use it as an index of our individual and collective well-being. The one thing we seem to be able to hold on to in these confusing times is the certainty that we have more money, are better off, and therefore, as a nation, we are doing well. But for all our obsession with it, we seldom stop to ask whether we are in fact well-off by the standards of the developed world.
There is a little game you can play on the internet. Go to a site called realtor.com. It's the website of the US National Realtors Association, which represents what we call estate agents. One of the facilities they offer for people who are thinking of moving to a new city is a computerised calculation of what you need to earn in your new home city to preserve the standard of living you currently enjoy. The relative cost of living is worked out using data on housing and utility costs, and the prices of consumable goods, transportation, and other services.
Let's assume, using this calculator, that you live in Cork city and earn €100,000 a year. How much do you have to earn to enjoy an equivalent lifestyle in different cities? If you move to Paris, you need €81,691. In Madrid, €70,888; in Barcelona, €65,028; in Rome, €72,914; in Brindisi, €66,163; in Krakow, €54,334; in Hiroshima, €85,667; in Kobe, €92,439; in Berlin, €81,015; in Stuttgart, €54,240; in Stockholm, €78,315. There are a few places where you'd need more than your €100,000 - €102,620 in Oslo; €102,214 in San Francisco; €134,351 in New York - but there aren't many.
There's a slew of beautiful cities with a very good quality of life where money goes a hell of a lot further than it does here. With no disrespect to Cork, it would be very hard to argue that the privilege of living there is worth Barcelona plus €35,000 a year. In purely monetary terms, if Irish lifestyles were for sale, they'd be dismissed as very bad value.
According to the EU's statistics service Eurostat, in a survey published last summer, Ireland is the most expensive of the EU's 25 states. Irish food, alcohol and tobacco prices are not just higher than in any other country of the EU 25. They're an astonishing 44 per cent above the average. The cost of fruit, vegetables, coffee, tea and soft drinks is 40 per cent above the EU average.
A basket of food, beverages and cigarettes in Ireland costs about 2.6 times more than in Poland.
Dublin is the fourth most expensive city in the EU, and the 14th most expensive in the world. And the trend is even more alarming. As a proportion of average manufacturing wages, a pint of Guinness now costs 50 per cent more than it did in 1969. The distance between us and our neighbours, in terms of what we can buy for a euro, is rapidly increasing. Ireland's consumer price inflation has exceeded that in the Eurozone and old EU-15 countries for the past seven years, increasing by 17.5 per cent between December 1999 and December 2003. By comparison EU-15 prices increased by only 8.4 per cent over the same period. In the four years to May 2004, the average price of Irish goods and services increased by 22 per cent relative to our trading partners.
We're also extremely expensive to visit. In a survey that was published in May 2004, Ireland was ranked behind Norway as the second most-expensive place to take a holiday.
All of this would lead you to expect that Irish workers would be exceptionally well paid. It's not at all clear that we are. Another survey this year, done by Mercer Human Resources Consulting, compared the salaries of senior information technology professionals in different countries. This is an interesting benchmark, because IT professionals are supposed to be the new standard-bearers of the Irish economy. Yet they seem to be paid rather badly by international standards. A senior IT professional in Switzerland earns on average $75,100 a year. The Japanese and the German worker get roughly the same: $64,500. The Danes get $55,000. The Irish IT professionals, however, pull down just $46,200.
If you live in a more expensive place and earn less money, it ought to be pretty obvious that you're poorer than most of your counterparts elsewhere. Yet that doesn't seem to be the way most Irish people think of themselves at the moment. We've bought in to a notion of ourselves as a tremendously prosperous society. Some of our politicians have taken to patronising other Europeans as if they're miserable sods without an arse in their collective trousers, and suggesting that if they followed our policies they could be rich like us. When they see how we tolerate such high prices, they must assume that we're rolling in it. How could they know that, for all our obsession with money, we are actually pretty clueless about the stuff.