IMF: social welfare benefits 'too high'

later12

Deleted User wrote: »

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?

Internationally, under ILO guidelines, if an individual were out of the labour force and in training then s/he would not be regarded as unemployed in the QNHS survey.

I'm not entirely sure whether time spent on a Fas course would count towards long term unemployment when an individual returns to job-seeking, partly because not all Fas scheme participants would be in full time training.

My understanding is that there are individuals in Fas training who are encouraged to seek part time work, or who undergo training only on alternating weeks. Perhaps you should send an enquiry to the CSO for a definitive answer.

djpbarry wrote: »

I made no such assumption?

Where are you getting the €273 million figure above? Can you show us what calculations you undertook to arrive at that figure, and explain why?

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

It's the maximum personal welfare rate today. If any the 20,000 LTU were married to or cohabiting with workers, they would get less than the maximum personal rate. If any of the 20,000 were married or cohabiting with other unemployed individuals, they would also get less than the maximum personal rate.

Did you or did you not base your calculation on the 2012 maximum personal rate?

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

It's above; it's about 5 posts back, in the green table.

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

I imagine they were; just as the replacement rates show they are today.

Like I said, there may be a question to answer on unemployed families, but the situation for the vast majority of unemployment transfers for single people is clear: Irish unemployment transfers do not tend to facilitate a benefits culture.

djpbarry

later12 wrote: »

Where are you getting the €273 million figure above? Can you show us what calculations you undertook to arrive at that figure, and explain why?

€188 per week times 52 weeks times 28,000. It's a ball-park figure - I never claimed it to be exact.

later12 wrote: »

Did you or did you not base your calculation on the 2012 maximum personal rate?

Yep. Of course I didn't factor in any of the additional benefits available to unemployed individuals.

later12 wrote: »

It's above; it's about 5 posts back, in the green table.

Great. Thanks.

How about a source for the green table? Because, y'know, that's obviously what I was after.

later12 wrote: »

...Irish unemployment transfers do not tend to facilitate a benefits culture.

You seem awfully sure of that. As said above, half of all unemployed 15-24 year olds in Ireland are classified as long-term unemployed - does that not represent a "benefits culture" in the making?

later12

djpbarry wrote: »

I never claimed it to be exact.

Fantastic. Although in the absence of clarifying the crudeness of that calculation, a reader might take it at face value. You also stated it was "a minumum" without having any apparent knowledge of not only what proportion of the LTU were entitled to benefits, but indeed how the demographics break down. That's a problem.

How about a source for the green table? Because, y'know, that's obviously what I was after.

It's come up previously in the thread, here it is again
http://www.esri.ie/UserFiles/publications/WP395/jacb201155.pdf

Count Dooku

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.

According to latest data from OECD, Ireland is only country where net replacement rate for certain categories higher than 100%
http://www.oecd.org/dataoecd/60/51/49971098.xlsx
and it even without taking into account cost of childcare and driving to work

djpbarry

later12 wrote: »

You also stated it was "a minumum" without having any apparent knowledge of not only what proportion of the LTU were entitled to benefits...

You really think it’s unreasonable to assume that a long-term unemployed person in 2007 was claiming welfare? I don’t think “unemployed = welfare recipient” is an unreasonable default position to adopt.

Total spend on Jobseekers’ supports was about €1.4 billion in 2007, spread across about 140k claimants (source) – the rough figure of €273 million for 28k unemployed people fits with that, but that obviously assumes a homogenous population.

later12

Count Dooku wrote: »

According to latest data from OECD, Ireland is only country where net replacement rate for certain categories higher than 100%
http://www.oecd.org/dataoecd/60/51/49971098.xlsx
and it even without taking into account cost of childcare and driving to work

I'm on a mac right now and can't open that xls; I presume it must be from the OECD Tax Benefit calculator?
I note you said "certain categories". Can you spell out which categories exactly you are talking about? Note I have already suggested there may be a case to answer for family replacement rates, although there needs to be better empirical research into that question.

There is a case that long term replacement rates have tended not to change much in Ireland, as they do in other EU jurisdictions, prior to the Social Welfare Act 2010 and further measures announced by the current Minister for Social Protection.

There are, further, two important qualifying points to add.

Firstly according to the OECD, Ireland has the 3rd lowest IRR for single people with no children (who make up about 87% of our unemployed) in the OECD.

Secondly, whilst Ireland does extend higher IRRs to the long term unemployed, we are relatively unique in our preference for cash transfers as opposed to the broader range of supports and unaccountable secondary benefits which may be enjoyed elsewhere in the OECD.

Moreover, one would have to question the wisdom of stringently applying the same automatic penalties for long term unemployment as are in existence in EU states with healthier economies at present.

As has been extensively repeated, our long term unemployment crisis is not due to a sudden mist of laziness having descended over the island. Therefore neither ought labour re-activation penalties be anticipated to correct the problem. They should be seen as an unfortunate but necessary means of curbing public expenditure.

djpbarry wrote: »

You really think it’s unreasonable to assume that a long-term unemployed person in 2007 was claiming welfare? I don’t think “unemployed = welfare recipient” is an unreasonable default position to adopt.

It's not so much that it's unreasonable to assume that a long term unemployed person was collecting some form of welfare. I'm mainly pointing out that (a) not all of the long term/ short term unemployed are entitled to any benefits and (b) of those who are entitled to anything, there is no reason to assume they are on the maximum personal rate.

Total spend on Jobseekers’ supports was about €1.4 billion in 2007, spread across about 140k claimants (source) – the rough figure of €273 million for 28k unemployed people fits with that, but that obviously assumes a homogenous population.

About 40% of those people were on Jobseeker's Benefit, and if they were in full time work they are pretty much guaranteed to have enjoyed the maximum rate of €185.20 per week; not so for Jobseeker's Allowance claimants, and especially not necessarily so for Long Term Unemployed in receipt of Jobseekers Allowance Claimants which unfortunately are not classified on their own in that or similar welfare statistical documents, and it is inappropriate to make crude assumptions about the distribution of the maximum personal rate within that cohort of individuals using the labour force survey.

Furthermore, one is never going to totally eradicate unemployment. Ireland had a far lower rate of long term unemployment than the European, EU15, or Eurozone average for many years. There are always going to be a small number of individuals who are insensitive to employment activation measures, or whose inadequate education, or age, or personal situation inhibits them from acquiring work; if we were to magically rid ourselves of this small minority suggested by the graph below, it would be of little consequence to our crisis.

It's also a lot harder and potentially a lot more expensive to allocate employment to these individuals; that's why the focus needs to be on re-employing the most willing to work and creating the labour market whose demand creates its own supply. This petty moaning which focuses on what was one of the most enviable LTU rates in Europe, whilst ignoring the elephant in the room, is pretty foolish.

christmas2012

all i can say to those who think welfare is ''TOO HIGH'' , is to try and LIVE on it and see if it is too high,i can attest to the fact its a struggle and you can barely make ends meet..If the EU/IMF think its too high why dont they look at the job blocker FAS which is driving the welfare bill up and the job blocker jobbridge which drives up the welfare bill and gives nothing back by way of paid employment,in fact it steals what could have been a paid job..

People arent really looking at the root cause of why the welfare bill is so HIGH,did you know that FAS people get pensions PAID BY THE STATE?

Count Dooku

later12 wrote: »

I'm on a mac right now and can't open that xls; I presume it must be from the OECD Tax Benefit calculator?

No

later12 wrote: »

Firstly according to the OECD, Ireland has the 3rd lowest IRR for single people with no children (who make up about 87% of our unemployed) in the OECD.

a)58% are single, 75% don't have children

b) Most countries pay percentage of previous income as jobseeker benefit, this is why only jobseeker allowance must be cut

later12 wrote: »

Secondly, whilst Ireland does extend higher IRRs to the long term unemployed, we are relatively unique in our preference for cash transfers as opposed to the broader range of supports and unaccountable secondary benefits which may be enjoyed elsewhere in the OECD.

They have working public services, we don't

later12 wrote: »

As has been extensively repeated, our long term unemployment crisis is not due to a sudden mist of laziness having descended over the island.

The same arguments were used when Germany cut benefits for long term unemployed in 2005

later12

Count Dooku wrote: »

a)58% are single, 75% don't have children

Ah yes, I had meant to insert an "or" there; i.e. "single people or those with no children".

In fact the figure is not the 87% I noted (I was recalling it from memory, hence mea culpa), but is not the 75% you quote either. It is closer to 83%

I imagine the difficulty is that you're using the total live register figure. I am talking only about recipients of Jobseeker's Allowance or Jobseeker's Benefit.

http://www.esri.ie/UserFiles/publications/WP395/jacb201155.pdf

Count Dooku wrote: »

Later12 wrote:

As has been extensively repeated, our long term unemployment crisis is not due to a sudden mist of laziness having descended over the island.

The same arguments were used when Germany cut benefits for long term unemployed in 2005

I'm not making excuses not to cut social welfare; I've already advocated the need for social welfare cuts. All I'm saying is that the reason for the spike in the graph as set out above and in similar unemployment data is not due to a sudden mist of laziness. Therefore we shouldn't expect penalties to solve the problem, although cuts are inevitable for other reasons.

djpbarry

later12 wrote: »

As has been extensively repeated, our long term unemployment crisis is not due to a sudden mist of laziness having descended over the island.

Who said that it was? The point that is being made is that long-term unemployment is already a significant problem and is likely to be for some time to come. Not because of “laziness”, but because the salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment.

christmas2012 wrote: »

all i can say to those who think welfare is ''TOO HIGH'' , is to try and LIVE on it...

Do explain how €188 per week is not sufficient to support a single person with no dependents?

christmas2012 wrote: »

People arent really looking at the root cause of why the welfare bill is so HIGH,did you know that FAS people get pensions PAID BY THE STATE?

Public sector pensions are not factored into the social welfare bill.

later12

djpbarry wrote: »

The point that is being made is that long-term unemployment is already a significant problem and is likely to be for some time to come. Not because of “laziness”, but because the salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment.

That is simply not borne out by Callan et al. with reference to IRRs, a paper that has been posted and re-posted and ignored (by you, when provided with a link to it, not ten posts back). So what gives you the confidence to make this claim?

As I have said, there is some dispute over the extent of any disincentive to work amongst families with dependent children in the economy as it stands; but (1) they amount to about 17% of the JA/JB population, (2) we don't know how many of that cohort are long term unemployed, so the emboldened aspect of the quote above is misleading, at best.

EchoO

djpbarry wrote: »

Who said that it was? The point that is being made is that long-term unemployment is already a significant problem and is likely to be for some time to come. Not because of “laziness”, but because the salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment.

Long-term unemployment is a significant problem because the ratio of unemployed people to job vacancies is 26:1. Your argument would only make sense if there were a large number of low paid job vacancies presently going unfilled - there isn't. The ERSI report from last October does not back up the claim that welfare is at present a pretty attractive option relative to employment.

djpbarry

later12 wrote: »

That is simply not borne out by Callan et al. with reference to IRRs, a paper that has been posted and re-posted and ignored (by you, when provided with a link to it, not ten posts back).

I didn’t ignore it – I asked you for the link, didn’t I? The authors urge caution in interpreting their results throughout the article, do they not? For example, does their microsimulation method, used to estimate replacement rates, take “nixers” into consideration? I doubt it. Does it take into consideration earning potential prior to the onset of unemployment? That is a significant omission, because a lot of people will find it difficult to motivate themselves to work for a fraction of what they earned in their last job. Not to mention they may have little to no interest in filling a position that is in no way related to their previous job.

EchoO wrote: »

Long-term unemployment is a significant problem because the ratio of unemployed people to job vacancies is 26:1. Your argument would only make sense if there were a large number of low paid job vacancies presently going unfilled - there isn't.

To reiterate the question that murphaph has earlier posed on this thread and others...

Do you really believe that if hundreds of thousands of minimum wage jobs became available tomorrow that they would be filled, for the most part, by those currently unemployed? You think a plasterer, who previously had no trouble earning €40k +, is going to take a job behind the deli counter in the local Spar?

Economic analyses with hard numbers have their place, but the above represents may problem with them - they frequently omit significant sociological factors.

later12

djpbarry wrote: »

The authors urge caution in interpreting their results throughout the article, do they not?

The same with any econometric exercise. If you have some sort of superior empirical evidence then let us have it. I'm not interested in anecdotal foundations that intend reliable conclusions to grow up from them, which is what you and others seem to be relying on to perpetuate this notion of benefits being more attractive to work in a significant way.

To reiterate the question that murphaph has earlier posed on this thread and others...

Do you really believe that if hundreds of thousands of minimum wage jobs became available tomorrow that they would be filled, for the most part, by those currently unemployed? You think a plasterer, who previously had no trouble earning €40k +, is going to take a job behind the deli counter in the local Spar?

I'm not sure if you understand how IRRs are devised or what they can show; I'm not interested in individual examples that revolve around unprovable guesswork that any idiot can counter claim without needing to rely on anything but his dogged & baseless convictions.

Your argument boils down to "I don't like this evidence, therefore I'm going to reject it and replace it with opinion and invective".

paddy147

Has any goverment politician or IMF head tried to live off of the social wellfare for a week or a month with regards actually living and trying to get by....(food,clothes bills and mortgage).

Honest question here.

Thanks

later12

paddy147 wrote: »

Has any goverment politician or IMF head tried to live off of the social wellfare for a week or a month with regards actually living and trying to get by....(food,clothes bills and mortgage).

Honest question here.

Thanks

What's the relevance of the question? You might as well be asking has any present social welfare recipient ever tried to adhere to cumulative exchequer primary balance performance criteria set down by the Troika to ensure sovereign funding in a way that affects millions of individuals in the economy?

Nobody - or almost nobody - is doubting the difficulty of making ends meet when dependent upon benefits. But (a) a life on benefits is not supposed to be comfortable and (b) it is necessary for the overall welfare of Irish society that public expenditure consolidation efforts are adhered to.

liammur

paddy147 wrote: »

Has any goverment politician or IMF head tried to live off of the social wellfare for a week or a month with regards actually living and trying to get by....(food,clothes bills and mortgage).

Honest question here.

Thanks

That's all very well and good saying that. But, how do we balance the books ? Maintaining dole won't do much for it, and telling us it's a struggle. Of course it's a struggle.

Qualitymark

djpbarry wrote: »

€188 per week times 52 weeks times 28,000. It's a ball-park figure - I never claimed it to be exact.

My calculator says 188 x 52 = 9,776.

paddy147

Im not saying anything at all.

I simply asked had any goverment politician or IMF person ever lived on the SW/188 euro a week or month?...to see what its like in the reality of things.

Thats all.


PS-I think the late Tony Greggory TD did it once,many years ago.

EchoO

djpbarry wrote: »

Do you really believe that if hundreds of thousands of minimum wage jobs became available tomorrow that they would be filled, for the most part, by those currently unemployed? You think a plasterer, who previously had no trouble earning €40k +, is going to take a job behind the deli counter in the local Spar?

50,000 jobs have been lost in the retail sector, so I suspect the local spar would have little difficulty in filling the position. You stated

long-term unemployment is already a significant problem because the salaries available to low-skilled workers have dropped considerably in the last few years

I'm saying this is not a valid statement to make, murphaph's extremely hypothetical question doesn't make it anymore valid.

djpbarry

later12 wrote: »

The same with any econometric exercise.

But you’re refusing to engage with anyone who highlights any limitations?

later12 wrote: »

If you have some sort of superior empirical evidence then let us have it.

I’m afraid I don’t, as I’m not aware of a suitable precedent (see below).

later12 wrote: »

I'm not interested in anecdotal foundations that intend reliable conclusions to grow up from them, which is what you and others seem to be relying on to perpetuate this notion of benefits being more attractive to work in a significant way.

Who’s throwing around anecdotes? Is Ireland’s unemployment problem not largely due to the collapse of the construction industry? Is a very large proportion of Ireland’s unemployed population not relatively lacking in education and qualifications? Could they not expect to command a significantly higher salary pre-unemployment than they can expect to find now? Is it not likely that a significant number, particularly those who were employed in construction, are working “under the radar” for cash in hand payments?

later12 wrote: »

I'm not sure if you understand how IRRs are devised or what they can show...

I’m capable of reading, thanks.

later12 wrote: »

Your argument boils down to "I don't like this evidence, therefore I'm going to reject it and replace it with opinion and invective".

Em, I’ve not rejected anything? I can’t see much in the report’s conclusions that I disagree with?

Qualitymark wrote: »

My calculator says 188 x 52 = 9,776.

I’m sure it does. What does your calculator tell you when you multiply 9,776 by 28,000?

later12

djpbarry wrote: »

But you’re refusing to engage with anyone who highlights any limitations?

Of course not, I'm saying that I don't consider the model's inability to account for "nixers" - just like any equivalent IRR exercise carried anywhere else - to be a serious criticism; nor does the bog standard advice to interpret any such model with appropriate caution render the study less relevant or detract in any way from its findings. You're just coming out with foolish & naive criticisms because you dislike the data.

Is Ireland’s unemployment problem not largely due to the collapse of the construction industry? Is a very large proportion of Ireland’s unemployed population not relatively lacking in education and qualifications?

Yes, but that has nothing to do with Income Replacement Rates. And there is encouraging evidence to suggest that a significant number of the unemployed have been addressing whatever skills deficit they may have, according to ongoing research by a PhD student named thomas confrey.

http://www.centralbank.ie/publications/Documents/Labour_Letter_090611_Web.pdf

Could they not expect to command a significantly higher salary pre-unemployment than they can expect to find now?

Did you understand why I asked you about the extent of your comprehension of IRRs?

It is reasonable to assume, when undertaking any sort of econometric exercise of this nature that most individuals are reasonably rational, profit maximising machines. And yes, the research by Callen et al. derived its results by employing regressions of the logs of hourly wages based on personal characteristics like age and educational attainment of the unemployed. To this end, the researchers also used wage estimates which took account of the fall in salaries since the crisis began, and I understand that they are already updating this work with even more recent wage data.

This is one of the most comprehensive methods of evaluating IRRs in the labour market, it is streets ahead of the alternative methodologies such as that still employed by the OECD (which nevertheless, also reaches similar conclusions). You really would need a pretty strong alternative piece of research to overcome the conclusions of this report.

djpbarry

later12 wrote: »

You're just coming out with foolish & naive criticisms because you dislike the data.

Oh for goodness sake! Are you actually reading my posts at all? I am not criticising the paper, nor am I saying I “dislike” the data! The data is the data! What I am trying to do is take the discussion beyond this one article that you have presented as evidence, but you seem utterly unwilling to do so.

later12 wrote: »

Yes, but that has nothing to do with Income Replacement Rates.

Did I say it did? Are we not allowed to discuss anything that does not fit into the narrow definition of “Income Replacement Rates”?

later12 wrote: »

It is reasonable to assume, when undertaking any sort of econometric exercise of this nature that most individuals are reasonably rational, profit maximising machines.

So the plasterer is going to take the minimum wage job behind the deli counter in Spar? I have a feeling you’re going to avoid that question again.

christmas2012

THE EU IMF NEED TO TAKE INTO ACCOUNT THE FAS STATE PENSION STATE PAID FOR AND THE JOB BRIDGE PENSION STATE PAID FOR THAT KNOCKS UP THE SOCIAL WELFARE BILL SKY HIGH PEOPLE ON 188 PER WEEK ARE STRUGGLING AS IT IS YOU CANT TAKE FROM THE POOR THEY CAN BARELY AFFORD AS IT IS..ITS UNJUST THAT THEY ARE NOT TAKING JUNKETS INTO ACCOUNT,IF THEY ARE TO LOOK AT SOCIAL WELFARE.....THEY SHOULD LOOK AT IT ON A HOLISTIC LEVEL.. AND GET REAL

Sponge Bob

Holistic ..including punctuation perhaps ???

later12

djpbarry wrote: »

What I am trying to do is take the discussion beyond this one article that you have presented as evidence

...Are we not allowed to discuss anything that does not fit into the narrow definition of “Income Replacement Rates”?

I'm not, particularly, no. Because the main point that I'm contending is that claiming benefits is some sort of more financially preferable pursuit than working in any material way as you had claimed.

That is demonstrably false.

I'm not here claiming that we don't have a significant long term unemployment problem, or that long term unemployment does not leave undesirable artifacts in the economy. Nor indeed am I suggesting that social welfare needs to remain untouched. It undeniably must fall. So my only real issue here is the claim which many of you appear content to rattle off without evidence, which is that social welfare is somehow a more financially attractive way of life.

So the plasterer is going to take the minimum wage job behind the deli counter in Spar? I have a feeling you’re going to avoid that question again.

I'm not avoiding it; I'm telling you I'm not going to go around in circles to humour some completely made-up scenario that relies on each party forming conclusions based on guesswork or anecdotes,nobody having to provide any evidence. It's idiotic stuff.

The Callan paper does not assume that unemployed individuals will take up any old employment regardless of their skills or wage expectation. Furthermore, it has already been put to you that plenty of people have lost their jobs in traditionally low paid sectors who in theory ought be perfectly willing to reassume such work at the next available opportunity. So it's not entirely clear where on Earth you think you're going with that particular wheelbarrow.

antoobrien

Nothing on the DSP website, so I'll just have to go on what the indo are saying on this.

OVER 1,275 jobless people have had their benefits cut - because they failed to take-up work or training offers.

The Department of Social Protection said today that while there is a right to a payment, there was also a matching responsibility on the unemployed person ‘’to engage’’.

But today the Irish National Organisation for the Unemployed told RTE’s News at One that ‘’penalising those who are unemployed should be a last resort’’.

Spokesperson Bríd O'Brien said the bigger issue facing those who are unemployed was the lack of quality education places.

The Department introduced a measure last April, where jobseeker payments would be cut by €44 a week.

The reduction is for those who refuse to take-up training offers, employment opportunities or job interviews.

Since then, over 1,200 such payments have been reduced.

The highest rate of jobseeker benefit is €188, which can be cut by €44.

Lower rates of benefit face lower, proportional cuts.

The penalty applies only to an individual's personal jobseeker payments.

No penalty is applied to any additional payments relating to adult or child dependants.

Seems like a low number given the complaints of rampant system working (though getting a job refusal letter isn't hard).

Godge

later12 wrote: »

You really would need a pretty strong alternative piece of research to overcome the conclusions of this report.

Not necessarily, all you would have to demonstrate is that some of underlying assumptions are so out of tune with reality that the study itself lacks credibility.

For example, months ago, in another thread, I am sure that I pointed out about a similar (or maybe even the same study) that if you ignore what an economist might call the transactional costs of working (dearer lunch, travel, childcare, etc.) then your study is practically worthless.

later12 wrote: »

I'm not, particularly, no. Because the main point that I'm contending is that claiming benefits is some sort of more financially preferable pursuit than working in any material way as you had claimed.

That is demonstrably false.

.

For the sake of responding to this point, I am not going to argue as to whether the statement you make about welfare not being a financial preferable pursuit is true or not. I will just accept that point for the purposes of replying.

Dole is €188
Typical retail job is 30 hours a week at €9 an hour giving €270.

You are technically correct but how many people are going to take a job where you either work the first two-thirds of the week for free or you are paid €2.73 an hour as those are the differences? Not many. And I haven't even taken into account all of the other things I mentioned above such as childcare, travel, lunch etc.

You see, people are not rational the way economists think they are which is why studies like the one you quote do not tell the full story.

later12

Godge wrote: »

if you ignore what an economist might call the transactional costs of working (dearer lunch, travel, childcare, etc.) then your study is practically worthless.

Except i'm talking particularly about single people here, as I have repeated at length. The childcare issue may be one that needs specific attention.

And if you're going to include the cost of bringing your lunch to work, then I'm sure you're just as eager to include the cost of making your lunch at home, or when using extra energy during normal working hours, aren't you..?

Godge

later12 wrote: »

Except i'm talking particularly about single people here, as I have repeated at length. The childcare issue may be one that needs specific attention.

And if you're going to include the cost of bringing your lunch to work, then I'm sure you're just as eager to include the cost of making your lunch at home, or when using extra energy during normal working hours, aren't you..?

Are you realistically implying in your second paragraph that the financial costs of going to work and the costs of staying at home are about the same?

And before we go any further I haven't even dealt with the loss of the utility of 40 hours a week spare time to pursue hobbies and interests (many of which have little or no marginal financial cost).

The study being referenced here is a classic example of econometrics not understanding the real world.

EchoO

Godge wrote: »

Dole is €188
Typical retail job is 30 hours a week at €9 an hour giving €270.

You are technically correct but how many people are going to take a job where you either work the first two-thirds of the week for free or you are paid €2.73 an hour as those are the differences? Not many. And I haven't even taken into account all of the other things I mentioned above such as childcare, travel, lunch etc.

You see, people are not rational the way economists think they are which is why studies like the one you quote do not tell the full story.

There's a slight flaw in that logic - people do actually choose to work for those rates. They could stay at home and pick up their 188 per week, but they don't. There also isn't large numbers of entry level retail job vacancies going unfilled, if we all followed your rational - then there would be.

later12

Godge wrote: »

Are you realistically implying in your second paragraph that the financial costs of going to work and the costs of staying at home are about the same?

That would have been my experience to a degree, but it depends on the job. So no, I'm only saying that there are financial costs to staying at home vs working, most particularly in relation to energy costs.

These costs don't have to be as great as the financial costs of working in every scenario, but they should at least be balanced against any additional costs of work that one might introduce. I don't think that's a particularly controversial point.

ART6

There is absolutely no point in saying as a sweeping generalisation that welfare benefits in Ireland are "too high" without saying in relation to what? To the EU average? Meaningless, as Ireland (and no-one else) is the "EU average". If the benefits were related to the cost of living for (say) a family of four, then I could begin to see the relevance. Having said that, I do suspect that the taxpayer is doing more than enough to support the unemployed where those unemployed choose not to work.

Therein lies the problem. If there are some jobs available, but generating less income than the welfare benefits, then the claimant would be mad to avail of them. If the benefits put bread on the table for the family but the job would hardly do so, then why change? Why would a redundant motor mechanic in a rented house want to work on a Tesco checkout, when his financial commitments were related to his income as a motor mechanic and cannot easily be reduced?

Re-training is an option that should be enforced. Fine, but how long will that take and will industry recognise the new qualification? We have a friend whose husband was a highly skilled craftsman who lost his job when his employer closed down. There were no other employers of the same skills in Ireland. He retrained as a block layer just in time for the demise of the construction industry! Re-train again? For what? For how long?

Maybe a bit of joined up thinking here would be appropriate. Identify those who had no previous income and no obvious skills prior to benefit claims, and progressively reduce their benefits until they either find something to do or can demonstrate that they have tried without success. For those who have paid their RSI and taxes previously, compare what jobs might be available to them and require that they take them provided that doing so does not worsen their financial position. If they won't accept that then reduce their benefits until they do.

Then there is the touchy problem of immigrants. It is a tough world out there, and Ireland cannot solve every humanitarian issue. The Irish people cannot resolve the civil war in Ethiopia or feed all of the starving children in West Africa. I believe that we need to state firmly that if you are threatened and can prove it, we will give you succour. If you are an economic immigrant who can bring essential skills to lour economy, we will welcome you. However, in either case you must accept our culture even if it offends you. You may follow whatever religion (or none) that you like, and we will not question that, but you MUST become a part of us or leave. Simple!

jased10s

Ok the crux of the problem seems to be too high prices.

Does the tankers that bring the goods into south ireland have a higher charge than the north ? If they do than why ?

Do the companys supplying Ireland charge more for their products than they charge the north ? If they do why ?

Anything else is local greed, be it rents , profits , ect.

You can by cheaper in the north and thats with a currency exchange cost !

Anyone who thinks it costs more here by country location is plain wrong.

I agree dole is way too high but also general prices are too high for everything.

professore

djpbarry wrote: »

waltermc wrote: »

The cost of renting houses is crazy in Dublin...

Relative to where?

Lads, saying that the cost of something is high is completely meaningless unless you provide a frame of reference.

Now, looking at the latest Daft rental report, a 2-bed property in the most expensive part of Dublin, Dublin 4, will set you back an average of €1,372 per month. By comparison, a 2-bed property where I live in London, which is not a particularly expensive neighbourhood (SW4), will set you back in the region of £1,700 per month.

So, can people please explain to me why they think rents in Dublin are "crazy"?

London is a world financial centre. Dublin is more comparable to somewhere like sheffield our hull.

professore

jased10s wrote: »

Ok the crux of the problem seems to be too high prices.

Does the tankers that bring the goods into south ireland have a higher charge than the north ? If they do than why ?

Do the companys supplying Ireland charge more for their products than they charge the north ? If they do why ?

Anything else is local greed, be it rents , profits , ect.

You can by cheaper in the north and thats with a currency exchange cost !

Anyone who thinks it costs more here by country location is plain wrong.

I agree dole is way too high but also general prices are too high for everything.

Two things: wages are higher in the south, and people sue here and get huge payouts thus driving insurance through the roof.

djpbarry

later12 wrote: »

So my only real issue here is the claim which many of you appear content to rattle off without evidence, which is that social welfare is somehow a more financially attractive way of life.

Hang on a second - please point out where I said that social welfare is more financially attractive than working?

later12 wrote: »

I'm not avoiding it; I'm telling you I'm not going to go around in circles to humour some completely made-up scenario...

How exactly is it a "completely made up scenario"? Ireland has lots of unemployed construction workers and no vacancies in construction. If they're going to go back into employment, they've got to look outside construction.

later12 wrote: »

The Callan paper does not assume that unemployed individuals will take up any old employment regardless of their skills or wage expectation.

So what employment does it assume they will take up? Where are all these unemployed construction workers going to work?

djpbarry

christmas2012 wrote: »

THE EU IMF NEED TO TAKE INTO ACCOUNT THE FAS STATE PENSION STATE PAID FOR AND THE JOB BRIDGE PENSION STATE PAID FOR THAT KNOCKS UP THE SOCIAL WELFARE BILL SKY HIGH...

Once again, state pensions are not included in the social welfare bill. Printing it in bold capitals won't make it so.

professore wrote: »

Dublin is more comparable to somewhere like sheffield our hull.

So presumably that's why Dublin is consistently ranked as one of the top cities in the world to live in?

EchoO

djpbarry wrote: »

Hang on a second - please point out where I said that social welfare is more financially attractive than working?

You implied that the root cause of long term unemployment is fact that "salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment".

The point that is being made is that long-term unemployment is already a significant problem and is likely to be for some time to come. Not because of “laziness”, but because the salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment.

There is not going to be a huge number of low-skilled jobs created in the economy in the foreseeable future. The option of working or not working will not be a choice for the vast majority of those construction workers. The chief problem they will face over the coming years will be structural unemployment.

Farmer Pudsey

During the boom there was very few on the minimum wage. In the convienence sector, supermarkets, pubs and resturants where there was low wages non nationals took up these jobs during the latter years of the boom

Low skill Paddy was working in the construction sector earning 500+ a week his girlfriend Anne was either a teaching assistance or was working for an auctioneer or in an office for a solicitor or for Harvey Norman.

This forced low skill factories such as Dell in Limerick to close as they could not compete with the wages. When the bust came Paddy lost his job. As Anne's job also went and she was expecting they applied for welfare and got rent allowance. Now they have two girls and a third on the way hoping for a young Pat and Anne has said this is the last. They give out about the social Welfare but while they enjoy a drink they do not smoke and manage away. Pat is handy he can service the car himself and repair any issue ( benifits of being a boy racer).

Also he manages to get 3-4 months work during the summer would not be any better off doing it but keeps the stamps up. He sometimes get a few odd jobs paints mother-in-law's house, cuts his brother John lawn while he was on holidays this year and gave him a hand puttinh up a deck ( not that john got any use out of it this year. It is worth 60-80/month.

He is looking for fulltime work but would need to get 50K to make it worth his while as it would not pay Anne to work ( she is looking after John's two childern after school for a few hours and gets 80 yo-yo a week for the three evenings and the kids stay saturday night twice a month when John and Mary his wife go out for a meal and few drinks.

Times are really tough.

Scortho

jased10s wrote: »

Ok the crux of the problem seems to be too high prices.

Does the tankers that bring the goods into south ireland have a higher charge than the north ? If they do than why ?

Do the companys supplying Ireland charge more for their products than they charge the north ? If they do why ?

Anything else is local greed, be it rents , profits , ect.

You can by cheaper in the north and thats with a currency exchange cost !

Anyone who thinks it costs more here by country location is plain wrong.

I agree dole is way too high but also general prices are too high for everything.

It might cost less up the north but have you compared their minimum wage to ours, their unemployment benefit to ours, their old age pension to ours?
Also price of goods generally depends on the demand.
If you're willing to pay me 20 quid for good x why on earth would I sell it to you for 15!

djpbarry

EchoO wrote: »

You implied that the root cause of long term unemployment is fact that "salaries available to low-skilled workers have dropped considerably in the last few years, making welfare a pretty attractive option relative to employment".

Indeed I did. I said that because salaries available to low-skilled workers have dropped considerably, if they take up a job, they effectively have to take a substantial pay cut relative to what they earned in their last job. That makes sitting on the dole, and waiting for salaries to recover (even though they probably never will), a lot more attractive than working in many cases.

EchoO

djpbarry wrote: »

That makes sitting on the dole, and waiting for salaries to recover (even though they probably never will), a lot more attractive than working in many cases.

Is there evidence that this is happening, or perhaps the more relevant question is - is there evidence that this has a chance of happening? Is there now, or will there be in medium to long term, the choice between working and not working for the majority of the people you're referring to? The answer is no because there is not going to be enough of these type of jobs created in the economy for this to be an issue.

The root cause of the long term employment rate is this lack of job creation, not salaries or benefit rates.

djpbarry

EchoO wrote: »

The root cause of the long term employment rate is this lack of job creation, not salaries or benefit rates.

So if 300,000 minimum wage jobs were created tomorrow, that would be Ireland's unemployment crisis sorted?

EchoO

djpbarry wrote: »

So if 300,000 minimum wage jobs were created tomorrow, that would be Ireland's unemployment crisis sorted?

That is the most asinine response I've read on here and has no relevance to want I posted. Ah look - just forget about it. Jesus wept!

djpbarry

EchoO wrote: »

That is the most asinine response I've read on here and has no relevance to want I posted.

It's perfectly relevant. You're arguing that the root cause of unemployment is lack of job creation. I would argue that it is a result of massive job losses in one particular industry (and its ancillaries) – those jobs are unlikely to ever be replaced, but anyway.

Your contention that lack of job creation is the problem raises the question of what happens if and when jobs are created? You think long-term unemployed, former construction workers will leap at the opportunity to get back into the workforce?

djpbarry

I also meant to post this earlier - the Irish Small and Medium Enterprises Association estimates the black economy in Ireland to be worth ~€25 billion:

According to ISME Chief Executive Mark Fielding, “While it is difficult to put an actual figure on the costs of the black economy, previous international estimates (in better times) suggest that in Ireland it amounts to 14% of GDP. ISME estimates would certainly put the figure at nearer to 16%, which would equate to €25bn this year and the figure could be much higher. The amount of lost taxes is conservatively estimated at €5bn, which would go a long way to reversing the current exchequer revenue shortfall.”

http://blog.isme.ie/small-business/booming-black-economy-killing-small-business/#more-1477

While this is obviously just an estimate and may be some way off the actual figure, but it would be foolish to dismiss the widespread opportunities for "nixers" for the unemployed.

later12

Not in any way to deny or detract from the disinterested impartiality of ISME - I'm sure! but perhaps we should look to a body like Revenue instead.

Not only do Revenue say that the black economy is even larger than that suggested by ISME, they do not place the same sort of focus on social welfare recipients as ISME do in accounting for the size of that black economy.

http://www.irishtimes.com/newspaper/frontpage/2011/1212/1224308955326.html

Now the State agency is targeting hundreds of audits in high-risk sectors such as hospitality and construction as well as among white-collar professionals. So-called “streetscape” audits where every business on a particular street is examined are also planned.

Documents obtained by The Irish Times also show the organisation has commissioned a range of unpublished surveys in recent times into the attitudes of the population towards paying tax.

They indicate that many are ambivalent about tax evasion and feel that cheating on welfare payments is a much more serious offence than evading tax.

A national poll of just over 1,000 people in 2009 found that between 40 and 50 per cent of respondents felt under-reporting on tax, exaggerating expenses and failing to declare additional income was “totally unacceptable”.

Similarly, just over half (56 per cent) felt tax evasion was “not acceptable”. Respondents were also divided when asked whether tax evaders should face jail, with 55 per cent agreeing.

In contrast, around 80 per cent felt deliberate social welfare fraud was “completely unacceptable”.

antoobrien

djpbarry wrote: »

While this is obviously just an estimate and may be some way off the actual figure, but it would be foolish to dismiss the widespread opportunities for "nixers" for the unemployed.

Revenue's checks & audits of cash business yielded a total of about €520m in 2011. Throw in counterfeit goods (9m), cigarette and oil smuggling etc, ISMEs figures might be optimistic, but not wildly so.

In 2011, tackling shadow economy activity was a key corporate priority. We focussed on sectors that have traditionally been susceptible to shadow activity, particularly cash businesses. We use a combination of risk analysis, intelligence collation, assurance checks and outdoor operations to combat these activities. Our approach is underpinned by close cooperation and information sharing with the Department of Social Protection (DSP), where we work together to uncover non-declaration or under-declaration of income and/or fraudulent DSP claims.

During the year, our auditors carried out a total of 11,066 audits resulting in a yield of €440.5 million. In addition, 546,502 assurance checks produced a yield of €81.3 million. URL="http://www.revenue.ie/en/about/publications/annual-reports/2011/objectives-3.html#table15"]Table 15, Audit and Assurance Activity[/URL.

EchoO

It's perfectly relevant

No, it's hypothetical nonsense.

I would argue that it is a result of massive job losses in one particular industry (and its ancillaries) – those jobs are unlikely to ever be replaced, but anyway.

Did you miss this bit?

The chief problem they will face over the coming years will be structural unemployment.

"they" being construction workers.

Your contention that lack of job creation is the problem raises the question of what happens if and when jobs are created?

It's interesting that you are now say when jobs are created because up to now you have been contending that the root cause of the current high long term unemployment rate is down to ex-construction workers "sitting on the dole, and waiting for salaries to recover", instead of taking up the jobs currently available in the economy. Now if they are not taking these jobs up then it follows that there most be all these job vacancies still out there. I have repeatedly asked you to back this up with some kind of factually based evidence and(as I said) all I'm getting back is hypothetical nonsense.