IMF: social welfare benefits 'too high'

Good loser

I say cut public service pay and pensions 5% per annum for each of the next three years. The same for all social welfare rates. These will give people time to plan and adjust.

KyussBishop

K3lso:
Where is adequate government funding going to come from if you get rid of income tax?
If minimum wage is so bad, what exact problems was it causing in the pre-crisis years? (pre-crisis, to remove any ambiguity caused by the current high-unemployment environment)

Farmer Pudsey

K3lso wrote: »

I agree we need to close a deficit and install some balanced budget asap - what I don't agree with is that this has anything to do with me and that I am to pay for the incompetency of government to let it get out of hand in the first place or bail out corporations and then come looking for a hand out to run "services" i.e - keep these massively paid public sector workers and quango queens/kings living the high life. You'd swear some of these gangsters had built a private business empire judging by their salaries.

My referral to "bureaucrats" stems from your initial point about no jobs being available out there. I was of course saying that a job can be created almost anywhere one person is willing to pay another - there would be more jobs created if a) there was no income related taxes on earnings and b) the government kept out of regulating employment (minimum wages).
It's a common misconception but government don't create jobs, businesses do and it's the government regulation that are killing jobs opportunities.

K3lso I disagree with you if there was no minimum wage we would have bigger issues. Even the USA the bastion of free enterprise has a minimum wage. Other wise you get companies in the service and retail sector that would use wages as a method of competition, ie I could set up a courier buisness get workers in a euro an hour less and under cut the other providers. Even FG relised that there was no benifit in reducing the minimun wage. Our problem is the rate of welfare is in competition with wages and a worker needs an income of around 25k to make it worth there while to work and 50K in the case of a family.

Taxes area necessary evil and all revenue cannot be raised by consumption taxes suches as Vat.

Good loser wrote: »

I say cut public service pay and pensions 5% per annum for each of the next three years. The same for all social welfare rates. These will give people time to plan and adjust.

This is again death by a thousand cuts. Iceland took the pain up front and now are getting back on track. Also the issue with public service pay is with benchmarking which raised certain sectors to unrealistic rates such as hospital consulatants, county managers, and mid and higher managment in the public servise and semi state bodies and quango's. Teacher, lecturer's etc are paid way more than else where in europe and their rate of pensions are excessive 50K should be the maximun pension anyone in the PS should get on retirement no matter if you are a consultant or presidant of Ireland, because if you are earning the money they are you should be able to fund the rest of your own pension

ardmacha

How much did hospital consultants receive in benchmarking?

Farmer Pudsey

ardmacha wrote: »

How much did hospital consultants receive in benchmarking?

They got a special deal after benchmarking that give them a rate of pay that is about twice what consultants get in the rest of europe and they are allowed a private practice as well:eek:

coolshannagh28

Farmer Pudsey wrote: »

ardmacha wrote: »

How much did hospital consultants receive in benchmarking?

They got a special deal after benchmarking that give them a rate of pay that is about twice what consultants get in the rest of europe and they are allowed a private practice as well:eek:

As well as the use of the hospital facilities for that private practise

Heads the ball

Farmer Pudsey wrote: »

ardmacha wrote: »

How much did hospital consultants receive in benchmarking?

They got a special deal after benchmarking that give them a rate of pay that is about twice what consultants get in the rest of europe and they are allowed a private practice as well:eek:

:0

Heads the ball

Just to be clear

its not feasible to reduce income tax to zero as we couldnt afford the loss of revenue

K3lso

Heads the ball wrote: »

Just to be clear

its not feasible to reduce income tax to zero as we couldnt afford the loss of revenue

You make that sound like it is a fact which is simply not the case. You really should have added "in my opinion" at the end of that. We both accept that there is a deficit that needs to be closed but we differ on how best to close it. I would like to see government owned land and services sold off and to allow the people to keep their money where as you don't.

Two differing opinions - because you disagree with lowering taxes doesn't mean it's not economically viable and indeed, the better option.

KyussBishop wrote: »

K3lso:
Where is adequate government funding going to come from if you get rid of income tax?
If minimum wage is so bad, what exact problems was it causing in the pre-crisis years? (pre-crisis, to remove any ambiguity caused by the current high-unemployment environment)

Asking a question such as that would indirectly mean you thought the "pre-crisis" years were all rosy in the garden which is far from the truth.



In the labour market wage rates reflect the willingness of workers to work (supply) and the willingness of employers to hire them (demand). Worker productivity is the main determinant of what employers are willing to pay. Most working people are not directly affected by the minimum wage because their productivity and, hence, their pay, is already well above it. You seem to think abolishing the minimum wage is going to send most people to slave labour which just isn't the case. What about the people working well above the minimum wage? They wouldn't feel anything at all.

It's the people currently unemployed that would be able to find work at say...E250/week for a few hours work that in today's economy is impossible with the minimum wage law. To put it in some perspective, we have all the empirical evidence we need to suggest that these wage laws are destructive to the economy and puts people out of work no matter what time it is (today or "pre-crisis"). There is no such thing as a "free lunch". Somebody somewhere is paying for the wage increase and you can bet your last cent that it is not the employer - he passes it off onto others in the form of reducing hiring, cutting employee work hours, reducing benefits, and charging higher consumer prices.

Farmer Pudsey wrote: »

K3lso I disagree with you if there was no minimum wage we would have bigger issues. Even the USA the bastion of free enterprise has a minimum wage. Other wise you get companies in the service and retail sector that would use wages as a method of competition, ie I could set up a courier buisness get workers in a euro an hour less and under cut the other providers. Even FG relised that there was no benifit in reducing the minimun wage. Our problem is the rate of welfare is in competition with wages and a worker needs an income of around 25k to make it worth there while to work and 50K in the case of a family.

Taxes area necessary evil and all revenue cannot be raised by consumption taxes suches as Vat.

I wouldn't refer to the US as a bastion of free enterprise - the US has long abandoned that economic system so using it as an example wouldn't be useful.

Nobody forces you to work and nobody forces you work for nothing. You do have a choice. Whatever pay figure is agreed upon by you and your employer is what should be paid out. It is a contract between your employer and you, nobody else. It's economically illiterate to suggest that a minimum wage law has no effect on the economy as a whole - it's destructive in a market system. Of course it benefits some people - perhaps even yourself. But it doesn't take away from the fact that it's a union lobbied law brought in to protect their jobs and their jobs alone from competition in the workplace. This may seem like an understandable grievance but a system of price fixing has no place in the market. Period.

Fine Gael don't give one damn about minimum wage laws and if you're to drop by politics.ie, you can see that a majority of them were against raising it. The fact it was raised was political and nothing else - pandering to the masses before the unpopular legislation was wrote up. It was all for the camera's, nothing more.

I'm of the opinion that government should be much smaller - and to that end, I wouldn't need to raise the exorbitant amounts of money from taxes in which some people seem to think we would need. The minimum wage law destroys probable jobs for low-skilled workers, that is extremely clear.

Heads the ball

K3lso wrote: »

We both accept that there is a deficit that needs to be closed but we differ on how best to close it. I would like to see government owned land and services sold off and to allow the people to keep their money where as you don't.

Two differing opinions - because you disagree with lowering taxes doesn't mean it's not economically viable and indeed, the better option.

But hang on a second. You arent even beginning to close it. There is a deficit and youre first step is to INCREASE that deficit by reducing income tax to zero.

Straight away we are down another 14bn (I believe the income tax take in 2011 was 13.9 bn but im open to correction). How does that help the economy? And what has that got to do with social welfare?

Also, can we be clear on what we are arguing here, Im not saying lowering taxes is always a bad thing - but you are going one step further - you want to ABOLISH income tax.

KyussBishop

K3lso wrote: »

In the labour market wage rates reflect the willingness of workers to work (supply) and the willingness of employers to hire them (demand). Worker productivity is the main determinant of what employers are willing to pay. Most working people are not directly affected by the minimum wage because their productivity and, hence, their pay, is already well above it. You seem to think abolishing the minimum wage is going to send most people to slave labour which just isn't the case. What about the people working well above the minimum wage? They wouldn't feel anything at all.

It's the people currently unemployed that would be able to find work at say...E250/week for a few hours work that in today's economy is impossible with the minimum wage law. To put it in some perspective, we have all the empirical evidence we need to suggest that these wage laws are destructive to the economy and puts people out of work no matter what time it is (today or "pre-crisis"). There is no such thing as a "free lunch". Somebody somewhere is paying for the wage increase and you can bet your last cent that it is not the employer - he passes it off onto others in the form of reducing hiring, cutting employee work hours, reducing benefits, and charging higher consumer prices.

You never answered either question; the first question you ignored completely, and the other question you gave a complete non-answer to.

So, with income tax abolished, where is adequate government funding going to come from?

If minimum wage is so harmful, what exact problems was it causing in the pre-crisis years? (and if you can point out any problems from pre-crisis years, explain how those problems override the benefit workers receive)

I'd very much like to see the empirical evidence showing harm in pre-crisis years.

Farmer Pudsey

K3lso wrote: »

I wouldn't refer to the US as a bastion of free enterprise - the US has long abandoned that economic system so using it as an example wouldn't be useful.

Nobody forces you to work and nobody forces you work for nothing. You do have a choice. Whatever pay figure is agreed upon by you and your employer is what should be paid out. It is a contract between your employer and you, nobody else. It's economically illiterate to suggest that a minimum wage law has no effect on the economy as a whole - it's destructive in a market system. Of course it benefits some people - perhaps even yourself. But it doesn't take away from the fact that it's a union lobbied law brought in to protect their jobs and their jobs alone from competition in the workplace. This may seem like an understandable grievance but a system of price fixing has no place in the market. Period.

Fine Gael don't give one damn about minimum wage laws and if you're to drop by politics.ie, you can see that a majority of them were against raising it. The fact it was raised was political and nothing else - pandering to the masses before the unpopular legislation was wrote up. It was all for the camera's, nothing more.

I'm of the opinion that government should be much smaller - and to that end, I wouldn't need to raise the exorbitant amounts of money from taxes in which some people seem to think we would need. The minimum wage law destroys probable jobs for low-skilled workers, that is extremely clear.

In an ideal worlld I would agree with you, however history has told us different. You look at employers in the service retail sector they gravitate towards the minimum wage. all it dose is it puts a floor below which they cannot pass. It may have it faults such as being maybe a litte on the high side or that if you are inexperiences you should start on a persentage of it. However I believe that theses are already covered by it.

The issue in this country os the level of social welfare, because of the rate unless you are adjacent to a job even at the minimum wage you are worse off taking the job so it is a barrier to work. The reality is that most minimum wage work is part time or reduced hours so if you work 30 hours a week earning 260/week you are no better off than being unemployed. Most of these jobs are held by third level students who have no access to welfare.

It is the level of welfare benifits that is the issue and now we see a start towards mean testing of family benifits which further starts to unbalane the market.

Incom Tax is a necessary evil, the issue with public services at present are there costs, the reality that the level of wages and pension of sectors of the PS, Quango's and Semi State bodies is excessive and more an more are retiring at 60. The average live expectancty 78 and climbing, however the average life expectancy of higher incom socio/economic groups is higher I believe in the mid 80's and rising. So pensions will be payable for the next 25-30 years to these retiree's.

The reality is that we need a cut accross Social welfare and a reverse of benchmarking and the special pay increses to higher paid employees in the PS, quango's and semi state bodies and a reduction in their pensions.

EchoO

K3lso wrote: »

In the labour market wage rates reflect the willingness of workers to work (supply) and the willingness of employers to hire them (demand). Worker productivity is the main determinant of what employers are willing to pay.

The view that the labour market follows the perfect competition model is not universally held and it wasn't a view shared by the recent Duffy-Walsh report.

General Atomic

It's incredible that there are people in this thread that think our current problems are related to social welfare rates. Our rate of long-term unemployment pre-crisis was one of the lowest in Europe, the remaining short-term being the usual churn. If social welfare was so attractive, why didn't we have 10+% unemployment before the crash? Oh, that's right! There were actually jobs to be had back then!

What exactly would be the point in cutting social welfare or the minimum wage? Cutting our deficit has basically nothing to do with encouraging employment, which is the real issue here. These thinly-veiled libertarian attacks on government and the social safety net are certainly not designed with the welfare of this country in mind.

Oh, and cutting the income tax to nothing is a laughable idea. We'd have to let go of tens of thousands of civil servants to compensate for reduced tax revenue, cut social welfare to basically nothing (consigning many to homelessness and misery) and/or borrow more money from Europe. What exactly would the point of this be?

djpbarry

General Atomic wrote: »

It's incredible that there are people in this thread that think our current problems are related to social welfare rates. Our rate of long-term unemployment pre-crisis was one of the lowest in Europe, the remaining short-term being the usual churn. If social welfare was so attractive, why didn't we have 10+% unemployment before the crash?

Well, there were still about 100,000 unemployed people, weren't there? Furthermore, even though unemployment has surged upward since then, social welfare spending has only increased by about 25%. In 2007, one Euro in every three spent by the Irish state was spent on welfare. Over one million people were claiming a welfare payment of some form each week. When we include children who benefited from child benefit payments, that number jumps up to 1.5 million.

murphaph

General Atomic wrote: »

It's incredible that there are people in this thread that think our current problems are related to social welfare rates. Our rate of long-term unemployment pre-crisis was one of the lowest in Europe, the remaining short-term being the usual churn. If social welfare was so attractive, why didn't we have 10+% unemployment before the crash? Oh, that's right! There were actually jobs to be had back then!

This is all rather simplistic. Whilst I would agree that most people start life expecting to work and never end up on welfare, some do. Some of these then find welfare to be quite "sticky" and the bar is raised as to what it takes to entice them off welfare.

I believe that only a minority of welfare recipients will be enticed off welfare with a minimum wage job (when you factor in the side benefits over and above basic dole). Do you disagree? Do you think if we had 400,000 minimum wage jobs tomorrow that unemployment would fall to 3% or 4%?

General Atomic wrote: »

What exactly would be the point in cutting social welfare or the minimum wage?

Welfare is a huge part of our expenditure, which we are borrowing to pay for, so reducing it is in the long term interests of the country and its future generations who will have to repay what we borrow today to keep our standard of living artificially high.

Minimum wage and welfare are inextricably linked. I would favour a reduction in both over time to saner levels (I'd also favour total overhaul of welfare so working people have a real safety net related to what they pay in and people who have never paid into the system get a subsistence payment that would be enough to cover absolute essentials-basic foostuffs and little more).

Farmer Pudsey

General Atomic wrote: »

It's incredible that there are people in this thread that think our current problems are related to social welfare rates. Our rate of long-term unemployment pre-crisis was one of the lowest in Europe, the remaining short-term being the usual churn. If social welfare was so attractive, why didn't we have 10+% unemployment before the crash? Oh, that's right! There were actually jobs to be had back then!

What exactly would be the point in cutting social welfare or the minimum wage? Cutting our deficit has basically nothing to do with encouraging employment, which is the real issue here. These thinly-veiled libertarian attacks on government and the social safety net are certainly not designed with the welfare of this country in mind.

Oh, and cutting the income tax to nothing is a laughable idea. We'd have to let go of tens of thousands of civil servants to compensate for reduced tax revenue, cut social welfare to basically nothing (consigning many to homelessness and misery) and/or borrow more money from Europe. What exactly would the point of this be?

General atomic the reason we had nearly full employment is that any perso that left school at 17 years of age could pick up a shovel go onto a building site and start on a basic of 600 euro' a week. There are a large section of society people in work as well as unemployed that will only work if it pays them to this is reality. The day is gone that any person can earn 600 euro's with little or no skillset. It was because of the building industry insatible demand for labour and the rates it paid that closed production lines in the likes of Dell in limerick.

There will not be in the foreseeable future unskilled job's paying that kind of money. Social welfare competes with the cost of labour in an ideal society people would rely on welfare only if they needed it just like sick certs. However this is not the case I know jobs are scarce however employers can only affort to pay a certain rate and at present in certain cases this is less that you would take home from social welfare when you take all your expenses into account.

Also in the next budget government have to pirotise people in work we have had a couple of publication's that have shown that the cost to young family's of working is increasing and there take home pay reducing and many would ne better off on welfare. For a couple with two childern they would need in the region of 20K a year take home to break even going to work as opposed to being unemployed

I do not know what age you are however in my younger years I too was a socialist and still am to a certain extent, I am opposed to any cut in the minimum wage as I believe it will serve no purpose as I outline in earlier post's however I believe that the course o that the present government is following in imposing hugh cost onto the coping class is unfair anmd will continue the downturn we have

areyawell

ye should all become corupt politicians. Ye seem to know everything!

[MOD]You're not required either to read these discussions or to post in them. If you do post, though, you're required to add something to the discussion rather than troll. Your record of bans and infractions is not impressive for a poster with only 150 posts, and your next offence will result in a permaban.[/MOD]

Scortho

If a single person living in Dublin (excluding Fingal) is on social welfare they can get rent allowance for shared accommodation of €300 and if they aren't in shared accommodation its €475!
If a person comes of social welfare and takes a minimum wage job and works 30 hours a week they may lose there rent allowance as they are now deemed to be in full employment!
Lastly if Im being handed 188 a week just to look for work, why on earth would I come of the dole to work a 30 hour week for an extra seventy odd quid! While I have no problem with someone getting 188 a week straight away after becoming unemployed, it should be reduced after a certain period of time (maybe 18 months) to a level that corresponds to their prsi contributions.

EchoO

djpbarry wrote: »

Well, there were still about 100,000 unemployed people, weren't there?

The long term unemployment rate was only 1.3%, around 28,000.

paddydu

Scortho wrote: »

If a single person living in Dublin (excluding Fingal) is on social welfare they can get rent allowance for shared accommodation of €300 and if they aren't in shared accommodation its €475!
If a person comes of social welfare and takes a minimum wage job and works 30 hours a week they may lose there rent allowance as they are now deemed to be in full employment!
Lastly if Im being handed 188 a week just to look for work, why on earth would I come of the dole to work a 30 hour week for an extra seventy odd quid! While I have no problem with someone getting 188 a week straight away after becoming unemployed, it should be reduced after a certain period of time (maybe 18 months) to a level that corresponds to their prsi contributions.

I agree with you that benefit should be reduced after a certain time period if the recipient has not tried hard enough to get back to work, I mean full time work and a fair wage, but what about people like me unemployed 20 months now 2 children living away with there motjher, me supposed to pay maintenance never mind trying to remain positive living in poverty paying 60e p/w in maintenance, 43 yrs of age worked all my life have applied for 510 jobs had 23 replies and 2 interviews feel like giving up and have thought about suicide seriously!! so cutting me into absolute poverty for something that is absolutely not my fault but those who caused this problem and have got away with it would not be the answer for some one like me!! Till people stand up and make the Government listen to what they are doing to ordinary decent people like me then are going to be a lot more deaths happening and blood on the politicians hands

General Atomic

murphaph wrote: »

This is all rather simplistic. Whilst I would agree that most people start life expecting to work and never end up on welfare, some do. Some of these then find welfare to be quite "sticky" and the bar is raised as to what it takes to entice them off welfare.

I believe that only a minority of welfare recipients will be enticed off welfare with a minimum wage job (when you factor in the side benefits over and above basic dole). Do you disagree? Do you think if we had 400,000 minimum wage jobs tomorrow that unemployment would fall to 3% or 4%?


Welfare is a huge part of our expenditure, which we are borrowing to pay for, so reducing it is in the long term interests of the country and its future generations who will have to repay what we borrow today to keep our standard of living artificially high.

Minimum wage and welfare are inextricably linked. I would favour a reduction in both over time to saner levels (I'd also favour total overhaul of welfare so working people have a real safety net related to what they pay in and people who have never paid into the system get a subsistence payment that would be enough to cover absolute essentials-basic foostuffs and little more).

I certainly don't dispute that there's potential for reform in our current welfare system; there is certainly money being paid out that could have been saved or spent on more economically useful projects without adversely affecting anyone's quality of life in a significant way.

My problem with this discussion is the insane notion that the rate of unemployment is due to generous social welfare payments, as opposed to the obvious lack of jobs. As pointed out previously, the long-term unemployment rate pre-crisis was very low; lower than that of pretty much all of Europe.

We didn't suddenly become a nation of free-loaders, we became a nation with far fewer available positions for employment. Any argument to the contrary invariably takes the form of anecdotes about people on the dole with iPhones, it just doesn't make actual sense.

As to the argument about future generations having to repay this debt - what about the incredibly high rate of youth unemployment that we're experiencing right now? It's funny how everyone claims to be so worried about the welfare of future generations while simultaneously ignoring the plight of today's young people; people who had no hand in the property collapse at all and deserve to have a future instead of being forced to leave their country to find work!

As I've said more than once, paying back our debt is far less important than stabilising our economy. If our unemployment rate continues to climb, our debt will be meaningless in any case; no-one will loan money to us regardless of how little we ask for. Money spent on welfare is directly injected into the economy, into local businesses that desperately need the custom. A cut in welfare will not improve our employment situation, it will in fact worsen it as businesses let workers go to compensate for reduced demand.

Scortho

to paddy du I understand where you're coming from and I know that it's tough out there at the moment!

However with only 2 interviews out of 510 cv's have you thought about retraining? As you've been unemployed for the last 18 months, youd be entitled to BTEA or one of Springboard schemes! Jobs are out there but in specialised areas.

For example there are currently 2500 jobs available with the multinationalshttp://www.siliconrepublic.com/careers/item/28168-us-multinationals-in-irelan

If you go down the springboard/btea route apply for an internship with one of the large multinationals and work for free during time off! From experience prospective employers love to see this as it shows initiative.
While the internship mightn't even give you a job with that company, it'll open up many doors and contacts for yourself in that industry! This is how I ended up getting my well paying part time job (have been offered full time but in college at the moment!)

djpbarry

EchoO wrote: »

The long term unemployment rate was only 1.3%, around 28,000.

Ok, but that’s still a significant number of people for whom welfare was an attractive option.

General Atomic wrote: »

My problem with this discussion is the insane notion that the rate of unemployment is due to generous social welfare payments...

No, the rate of unemployment is primarily a result in the collapse of the construction industry. Generous welfare payments make it extremely difficult to encourage unemployed construction workers to work in an industry other than construction (which will most likely involve retraining) for less money than they previously earned.

General Atomic wrote: »

We didn't suddenly become a nation of free-loaders, we became a nation with far fewer available positions for employment. Any argument to the contrary invariably takes the form of anecdotes about people on the dole with iPhones, it just doesn't make actual sense.

Well, yes, it does. It makes plenty of sense. The absolute minimum that an unemployed individual can claim is €188 per week. That doesn’t include additional benefits such as a medical card and/or rent allowance. Now, there is absolutely no way that a single person with no dependents is going to have any trouble at all living on that. They’ll even be able to save up for an iPhone, should they so wish.

General Atomic wrote: »

As to the argument about future generations having to repay this debt - what about the incredibly high rate of youth unemployment that we're experiencing right now?

What about it? We can’t cut welfare because young people are unemployed?

General Atomic wrote: »

It's funny how everyone claims to be so worried about the welfare of future generations while simultaneously ignoring the plight of today's young people; people who had no hand in the property collapse at all and deserve to have a future instead of being forced to leave their country to find work!

Are they really being forced? All the way to Australia (for example)? Really?

General Atomic wrote: »

Money spent on welfare is directly injected into the economy, into local businesses that desperately need the custom.

That’s an argument against welfare cuts that is frequently brought up, but never with any supporting evidence. How do you know it’s being injected into local businesses? If small businesses are your concern, then why not cut welfare in favour of tax breaks for SME’s?

EchoO

Farmer Pudsey wrote: »

The issue in this country os the level of social welfare, because of the rate unless you are adjacent to a job even at the minimum wage you are worse off taking the job so it is a barrier to work. The reality is that most minimum wage work is part time or reduced hours so if you work 30 hours a week earning 260/week you are no better off than being unemployed. Most of these jobs are held by third level students who have no access to welfare.

The minimum wage rate is a useful comparison because anyone returning to work will make at least that much, but minimum wage jobs only accounts for around 2.5% of all jobs in the economy. So in reality the vast majority of future job vacancies will offer wages higher than the minimum wage.

An ERSI report from last October found that only about 3 per cent of the unemployed would have a lower income if working than in signing on. And as many as 8 out of 10 unemployed people would increase their income by at least 50 per cent if they were to find employment.

http://www.irishtimes.com/newspaper/breaking/2011/1013/breaking8.html

Scortho

General Atomic wrote: »

Money spent on welfare is directly injected into the economy, into local businesses that desperately need the custom.

The thing about this is that that money would have been spent by me had it not being taken from my wages in the first place.

Heads the ball

Scortho wrote: »

The thing about this is that that money would have been spent by me had it not being taken from my wages in the first place.

Probably not actually. It would have been probably squandered by the government in some other way.

See the way things are at the moment means that if welfare was reduced in the morning it would not mean a euro-for-euro refund for you.

Even if it did, the middle and upper classes are generally more likely to save. Give a rich person 100€ and he may spend €50, give a poor person €100 and they will probably spend €100.

Scortho

Heads the ball wrote: »

Probably not actually. It would have been probably squandered by the government in some other way.

See the way things are at the moment means that if welfare was reduced in the morning it would not mean a euro-for-euro refund for you.

Even if it did, the middle and upper classes are generally more likely to save. Give a rich person 100€ and he may spend €50, give a poor person €100 and they will probably spend €100.

Yeah but at least I wouldn't feel as much anger when i see x times dole taking out of my wages every week while at the same time paying every increasing student fees! At least if social welfare was pegged to what you contributed after a period of time it wouldn't feel to bad!

coolshannagh28

While our social welfare rates may be too protective they are only one facet of our actual problem . For ten years whe have let costs in the domestic economy run too high ,this includes energy and and wages private but public particularly. Our economy has become uncompetitive as a result and in the five years since the recession started the government has not addressed it ,preferring instead a wait and hope strategy which has not worked as the euro and global economy slows .
Demand is contracting as saving rates increase further compounding the problem .this is now a vicious circle which is draining vital confidence from consumers and businesses.
The government must address the real issues facing us before it is too late

Heads the ball

Scortho wrote: »

Yeah but at least I wouldn't feel as much anger when i see x times dole taking out of my wages every week while at the same time paying every increasing student fees! At least if social welfare was pegged to what you contributed after a period of time it wouldn't feel to bad!

But it's not about making anyone feel better. Now honestly I think increasing student fees is unfair.

Nobody feels great about paying tax but I'm certainly not upset with welfare folk I'm upset about it (my tax money) bailing out the banks.

Tea drinker

Heads the ball wrote: »

But it's not about making anyone feel better. Now honestly I think increasing student fees is unfair.

Nobody feels great about paying tax but I'm certainly not upset with welfare folk I'm upset about it (my tax money) bailing out the banks.

They should do away with the childrens allowance. Paying people to have kids they can't afford, never mind can't afford to educate well is bad social planning.
I think the gov should announce for any 3rd and subsequent child born from mid next year there will be no childrens allowance. That would give time for adjustment. Future budgets could look at reducing the allowance on 2 kids further.
One way we can help parents is to look at crech fees and premises, insurance etc. Surely we can offer some kind of state insurance administered by a third party? Some NAMA buildings can be modified by unemployed builders? Ah no sure that would upset some people.

skafish

EchoO wrote: »

The minimum wage rate is a useful comparison because anyone returning to work will make at least that much, but minimum wage jobs only accounts for around 2.5% of all jobs in the economy. So in reality the vast majority of future job vacancies will offer wages higher than the minimum wage.

An ERSI report from last October found that only about 3 per cent of the unemployed would have a lower income if working than in signing on. And as many as 8 out of 10 unemployed people would increase their income by at least 50 per cent if they were to find employment.

http://www.irishtimes.com/newspaper/breaking/2011/1013/breaking8.html

There is a very simple explanation for this. Take, as an example, a small retail outlet. Many such businesses have a high level of staff turnover. So frequently take on new employees at minimum wage level. So a new employee is hired, and starts work on Monday morning.
The person who started work 2 weeks previously is now automaticlly entitled to a pay rise. It may be only 10 cents an hour, but the employer is obliged to recognise their greater experience than the last person to join the workforce, and pay them a higher rate.
Thus, the person with (for example) 2 weeks experience of making sandwiches and pouring coffee is no longer on the minimum wage.
The problem is that the employer, now having to may in excess of the minimum wage to the second last employee to start has to pay the person who started before that person a higher wage again, and so on.
This additional cost is then passed on to the consumer, who, in order to pay this increased cost needs to earn more from his or her own work, and so on.
So the problem is not with the existance of the minimum wage, but the level at which it is set.
IMO, the minimum wage needs to be reduced. This would then lead directly to a reduction in social welfare levels, which would make life difficult for some people at the start.
But it would also result in a reduction in the cost of goods and services, so that, after an initial period of adjustment, the reduced SW payments would have the same purchasing power they have now, at a lower cost to the taxpayer.
This would also inrease our international compeditiveness, and , hopefully help us out of the current mess.

EchoO

EchoO wrote: »

The long term unemployment rate was only 1.3%, around 28,000.

Just out of interest, would doing a 6 week FAS course while getting a payment from them rather than the welfare then going back on the dole prevent someone from being classified as long-term unemployed?

Cookie_Monster

skafish wrote: »

The person who started work 2 weeks previously is now automaticlly entitled to a pay rise.

how do you figure that? Standard practice would be every 6 months or yearly, and then there's no entitlement to a pay rise it's performance based.
What you're suggesting above is basically the ludicrous way some aspect of the public sector work. Pay increase for time, regardless of performance.

coolshannagh28

Heads the ball wrote: »

Since Dan Boyle is not credible.

Can anyone let me know if they find these sources credible please?

Micheal Martin
Catherine Murphy
Eamon Ryan
Vincent Brown

Pat Rabbitte on the VB show tonight has admitted to the existence of a.letter from jean Claude trichet to the government insisting that bondholders be paid off to protect the European banking system .

K-9

coolshannagh28 wrote: »

Pat Rabbitte on the VB show tonight has admitted to the existence of a.letter from jean Claude trichet to the government insisting that bondholders be paid off to protect the European banking system .

In relation to the guarantee or the bailout? I don't think EU interference as regards bondholders would come as a surprise to anybody since we guaranteed most of them. EU interference in the guarantee is what the crux of the issue was here and I've yet to see evidence of that.

FreudianSlippers

Heads the ball wrote: »

Even if it did, the middle and upper classes are generally more likely to save. Give a rich person 100€ and he may spend €50, give a poor person €100 and they will probably spend €100.

Firstly, it depends on your definition of "rich". I don't think there is any denying that middle class consumers in Ireland have had a significantly reduced level of disposable income due to being taxed into oblivion.

Secondly, I don't think there is any proof that middle or upper middle classes would not spend this money, even if initially saved. In fact, they would spend their money more effectively for the government than the poor person. Whilst the poor person buys black-market cigarettes and other items (happily I might add; if the RTÉ piece the other day is anything to go by), the middle/upper-middle class will spend more on taxable items and any savings are likely to go into a bigger purchase such as a car or home (which we need to start selling more of to truly help the economy).

molloyjh

FreudianSlippers wrote: »

....any savings are likely to go into a bigger purchase such as a car or home (which we need to start selling more of to truly help the economy).

You can buy mine if you like. I'll give it to you for €265k. That way I'll break even and stand a chance of buying elsewhere. Just think of how much good we'd be doing the economy.... :pac:

later12

djpbarry wrote: »

Ok, but that’s still a significant number of people for whom welfare was an attractive option.

28,000?
Actually it went lower; Long Term Unemployment went down to about 20,000.

We don't actually know how many of those people were even on benefits.

Housewives not on social welfare assistance, but who were looking for work could have been included, for example.

Seriously, we really, really did not have an unemployment problem back when rates were generous.

However, I do think it's important that rates are realistic, and that we are careful that a culture of dependency does not set in now.

djpbarry

later12 wrote: »

Seriously, we really, really did not have an unemployment problem back when rates were generous.

I'm not arguing that it was a serious problem. I'm arguing that for a large number of people (granted, it's a tiny fraction of the total population), long-term unemployment was a viable life-style choice. Bear in mind that supporting 28,000 unemployed people will cost the state a minimum of ~€273 million per annum at current welfare rates.

I accept that this is purely anecdotal, but I have family members who have been unemployed for years. Almost a decade in one case. Sure, they could have gone out and made more money fairly easily during the boom years - there was an incentive. But, it was also pretty easy to be lazy and live on welfare indefinitely. The potential for a serious unemployment crisis has been there for some time.

later12

djpbarry wrote: »

I'm not arguing that it was a serious problem. I'm arguing that for a large number of people (granted, it's a tiny fraction of the total population), long-term unemployment was a viable life-style choice. Bear in mind that supporting 28,000 unemployed people will cost the state a minimum of ~€273 million per annum at current welfare rates.

I think you missed the point that not all of those counted as unemployed would have been on benefits.

The ILO-QNHS unemployment figure is not a product of the Department of Social Protection. It does not relate directly to unemployment benefits. It counts those who are not in work but are currently seeking work. This includes people like housewives or house husbands or former students looking for work, and anyone else who may have been entitled to little or no benefits.

I'm sure the point being made by other users is that putting the focus on the doggedly unemployed is going to be a futile waste of energy, which is not going to put anything but a small dent in the figure. Far more efficient to start with the 'willing to work', whom the statistics would suggest are the clear majority.

Count Dooku

later12 wrote: »

Seriously, we really, really did not have an unemployment problem back when rates were generous.
.

Only because it was plenty of well paid jobs for low skilled workforce. Won't happen again until next property boom.

later12

Count Dooku wrote: »

Only because it was plenty of well paid jobs for low skilled workforce.

Yes; there were jobs available - that's sort of the point.

I'm not denying that social welfare needs to be more realistic in order to bring public expenditure under control.

I'm just making the point that Ireland has not been subjected to this sudden problem, to wit, high welfare transfer rates making work unattractive.

djpbarry

later12 wrote: »

I think you missed the point that not all of those counted as unemployed would have been on benefits.

The ILO-QNHS unemployment figure is not a product of the Department of Social Protection. It does not relate directly to unemployment benefits. It counts those who are not in work but are currently seeking work. This includes people like housewives or house husbands or former students looking for work, and anyone else who may have been entitled to little or no benefits.

Sure, but we're talking about long-term unemployed here. I find it doubtful that this cohort was composed to any great extent of people genuinely seeking work during the boom years.

later12 wrote: »

I'm sure the point being made by other users is that putting the focus on the doggedly unemployed is going to be a futile waste of energy...

Sure, but I think what we'll find is that the number of "doggedly unemployed" is going to increase drastically in the coming years, if it has not done already, as a result of the sharp decrease in relatively high wages for relatively low-skilled jobs.

later12

djpbarry wrote: »

Sure, but we're talking about long-term unemployed here. I find it doubtful that this cohort was composed to any great extent of people genuinely seeking work during the boom years.

Sure, you can find it hard to believe; but when you pluck figures like €273 million out of the air, expect the point to be mentioned that this is not a 'benefits received' statistic.

Sure, but I think what we'll find is that the number of "doggedly unemployed" is going to increase drastically in the coming years, if it has not done already, as a result of the sharp decrease in relatively high wages for relatively low-skilled jobs.

There's possibly an argument to be made there for unemployed parents (as per the Richard Tol controversy); that's a question yet to be answered. But the evidence suggests that that is just not the case for single people, who are in the overwhelming majority.

djpbarry

later12 wrote: »

Sure, you can find it hard to believe; but when you pluck figures like €273 million out of the air, expect the point to be mentioned that this is not a 'benefits received' statistic.

Fine, but you'll have a hard time convincing me (or anyone else, I dare say) that someone who has been unemployed for more than a year has not submitted a welfare claim.

later12 wrote: »

There's possibly an argument to be made there for unemployed parents (as per the Richard Tol controversy); that's a question yet to be answered. But the evidence suggests that that is just not the case for single people, who are in the overwhelming majority.

I don't know about that - about 50% of unemployed 15-24 year olds are classified as long-term unemployed.

later12

djpbarry wrote: »

Fine, but you'll have a hard time convincing me (or anyone else, I dare say) that someone who has been unemployed for more than a year has not submitted a welfare claim.

Oh you didn't just stop at presuming that all new/ repeat entrants to the job market after a period of inactivity had put in a welfare claim. You actually decided that they were all unmarried on the maximum possible welfare rates.

Why did you do that?

I don't know about that - about 50% of unemployed 15-24 year olds are classified as long-term unemployed.

Ah here. Nobody is saying there isn't a serious unemployment problem. The question at this part of the debate relates to whether there is an unemployment culture. While Scofflaw gave an overall replacement rate figure earlier in the thread, a breakdown of the replacement rates such as I have posted above doesn't support the notion that Irish transfer rates would facilitate a benefits culture.

What's more 64% of the unemployed were long term in 1994; and despite wage restraint in the early Celtic Tiger period, that figure fell dramatically y-o-y thereafter. If you're looking for a significant long term unemployment culture, don't look at Ireland in its recent economic history.

later12

later12 wrote: »

What's more 64% of the unemployed were long term in 1994; and despite wage restraint in the early Celtic Tiger period, that figure fell dramatically y-o-y thereafter. If you're looking for a significant long term unemployment culture, don't look at Ireland in its recent economic history.

I have to ask again, does doing a FAS course and getting paid by them for the duration then switching back to Jobseeker's Benefit prevent one from being classified as long-term unemployed?

djpbarry

later12 wrote: »

Oh you didn't just stop at presuming that all new/ repeat entrants to the job market after a period of inactivity had put in a welfare claim.

I made no such assumption? Once again, I am referring exclusively to the long-term unemployed, not “new entrants” to the job market.

later12 wrote: »

You actually decided that they were all unmarried on the maximum possible welfare rates.

Since when is €188 per week the maximum possible welfare rate?

later12 wrote: »

While Scofflaw gave an overall replacement rate figure earlier in the thread, a breakdown of the replacement rates such as I have posted...

You might provide a source for that table so I can get some context?

later12 wrote: »

What's more 64% of the unemployed were long term in 1994; and despite wage restraint in the early Celtic Tiger period, that figure fell dramatically y-o-y thereafter.

I’m guessing that, despite wage restraint, said wages were pretty attractive relative to welfare rates at the time?

murphaph

later12 wrote: »

Yes; there were jobs available - that's sort of the point.

I'm not denying that social welfare needs to be more realistic in order to bring public expenditure under control.

I'm just making the point that Ireland has not been subjected to this sudden problem, to wit, high welfare transfer rates making work unattractive.

The point he's making is that there were plenty of low skill and manual (trades) jobs that paid much better than welfare during the boom. A large swathe of the currently unemployed come from this cohort who left school, picked up the proverbial shovel and started making €1000 a week in the hand. This was clearly much more attractive than welfare.

This cohort now find that the few jobs out there that have similarly low entry requirements (retail for example) do not pay anywhere near what they would have been making during the boom and are not attractive enough to entice these people off welfare.

A large percentage of this cohort will (IMO) have little interest in retraining in IT etc. and indeed may not be academically capable. They will be the people who need to be "forced" off welfare into low paying jobs and I believe that the numbers are not insignificant.

As I said before, if 400,000 minimum wage jobs were created tomorrow, do you think we'd have 2% or 3% unemployment by the end of the month?