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Unemployment And Poverty

Unemployment And Poverty by Annette J Dunlea
Published In the Carrigdhoun Newspaper 10th Nov 2012 p.18

People are living in poverty if their income and resources are so inadequate as to preclude them from having a standard of living which is regarded as acceptable by Irish society generally. As a result of inadequate income and other resources people may be excluded and marginalised from participating in activities which are considered the norm for other people in society."Establishimg A benchmark For Ireland's social Welafre Payments report recommends that a figure of 27.5 per cent of average earnings is the appropriate benchmark for minimum social welfare payments and reflects a continuation of the previous benchmark (30 per cent of Gross Average Industrial Earnings) using the new CSO Earnings and Labour Costs dataset.People on the dole suffer not only from poverty but from a severe drop in standard of living.Ireland is currently “moving in the wrong direction”, with more people falling into poverty, the jobs market flatlining and a lack of action in key areas.The Government pledged to raise the employment rate to 69-71 per cent among people aged 20-64. However, SJI warns that the latest figures show the rate at 64.9 per cent. “It is not envisaged that this situation will improve anytime soon,” the study says.Social Justice Ireland called for action to reduce unemployment. It also said the Government should carry out “social impact assessments” before implementing policies, to measure how austerity measures affect the most vulnerable in society.“There can be no doubt that both the Irish Government and the EU are failing Ireland’s poorest and most vulnerable,” SJI director Dr Seán Healy said. “It is essential that both institutions prioritise solidarity and ensure the Europe 2020 Strategy is genuinely inclusive.”

High and persistent unemployment has presented a major challenge for the welfare state from two directions. First, it has eroded the funding base and second, it has increased the demands on welfare programs because of the consequences for poverty and inequality resulting from high unemployment.There is strong evidence that unemployment increases the risk of poverty and contributes to inequality, and that it also gives rise to a series of debilitating social effects on unemployed people themselves, their families and the communities in which they live.This suggests a need for welfare reform to give emphasis to employment generation, but this should not be the only outcome by which the welfare system should be judged. The provision of an adequate and secure safety net that does not unduly distort incentive structures is also an important welfare objective.The unemployed welfare standard payment is €188 per week. Payments can be increased if the unemployed has dependants. For each adult dependent, another €124.80 is added; and for each child dependent, another €29.80 is added.Data published by the Central Statistics Office shows that the average person working in the industrial sector saw their weekly pay fall to €803.98 before tax, or a gross annual salary of €41,806.96.Across all sectors, and not just industry, the average wage fell by just under €8 a week – from €36,179.00 in the first quarter to €35,767.68 in the last figures, a drop of 1.1 per cent.The average weekly pay packet in the private sector is now €611.66 – down by 1.9 per cent in the last three months – while public sector workers have seen average pay rise by 0.3 per cent to €918.99.The old age pension's Personal rate, for those aged 66 and under 80 is €219,a qualified adult (spouce) is €219 and a Increase for a qualified child is €29.80.

The relentless increase in the numbers of people who are long-term unemployed is deeply worrying with over 180,000 people in receipt of long-term unemployment payments as the year came to a close. These figures would be much worse were it not for the fact that so many of our citizens have given up hope of finding a job in Ireland and have decided to emigrate.To date, however, we have not seen the type of co-ordinated approach that is needed to seriously tackle unemployment.the country’s fiscal problems cannot be resolved until unemployment is seriously addressed, new jobs are created and unemployed people start to return to work.Long-term unemployment is at crisis levels with over 180,000 people on the Live Register.A striking feature of 2011 was the relentless growth in long-term unemployment: by the final quarter there were 182,100 people unemployed for more than a year. The longterm unemployment rate rose to 8.6%: a rate which for most of the ‘noughties’ stayed under 2%. The fall in employment continued:bringing employment back to mid-2003 levels.The extent of the employment loss and the challenge facing this state to give unemployed people real hope of getting back to work, and in particular decent work, appears to be lost on certain elements of our media. The constant focus on fraud and control measures in a range of media created a misleading impression that unemployed people are reluctant to work: an impression which the INOU has and will continue to challenge. As a long-term unemployment rate of 2% and less clearly illustrates: get the job creation right and unemployed people will go back to work in their thousands. In the meantime providing unemployed people with quality education and training options is critical: not only to maintain and develop the individual’s skills levels but to address existing and potential skills gaps.During 2011 a new Government was elected and produced a programme for government entitled “Government for National Recovery 2011-2016”. On page 3 of the document the Government stated that “By the end of our term in Government Ireland will be recognised as a modern, fair, socially inclusive and equal society supported by a productive and prosperous economy.” It is absolutely vital that the Government strives to realise this vision and seeks to put in place policies and practices that truly have at their heart facilitating unemployed people to participate fully in Irish society and its economic development.There is a well documented correlation between poverty and unemployment. Nearly 33% of households where no-one is at work are at risk of poverty while the rate for households where two people are working is just 5%. In 2010, the Economic and Social Research Institute identified increased unemployment as a factor that is likely to drive poverty levels up, if the appropriate policy responses are not taken.The ESRI report – Monitoring Poverty Trends in Ireland 2004-2007 – also states that ‘the risk of income poverty among children is strongly related to the employment status of the adults in the household in which they live.’ Significantly, the report also found that ‘amongst the unemployed, those unemployed for one year or less had an “at risk of poverty” rate of 14 per cent, while the rate for the long-term unemployed stood at 54 per cent.’

The link between poverty and mental health is well known.Those with low incomes are more likely to suffer from poor mental health and poverty effectively causing or contributing to poor mental health. Observationally, both individual and neighbourhood deprivation increase the risk of poor general and mental health.The rates of admission for acute psychiatric care tend to be higher in deprived areas.Those with mental health problems are more likely to experience poverty: once incapacitated, an individual's socio-economic status is likely to fall further. In the ESRIs  Report Monitoring Poverty Trends in Ireland 2004-2007: Key Issues for Children, People of Working Age and Older People monitors the evolution of poverty in Ireland from 2004 to 2007. The period marks the end of the first ten year National Anti-Poverty Strategy (NAPS) in Ireland which ran from 1997 to 2007, and the beginning of the National Action Plan for Social Inclusion 2007 to 2016.This period coincided with the final stages of the economic boom in Ireland and while tangible progress was made, the results show that poverty remained a very real issue for many households.  The study identifies the groups who were vulnerable at the onset of recession and highlights the longer term processes that underlie poverty risks. Some key findings from the report are : a decline in the “at risk of poverty” rate, which is the proportion of individuals falling below the poverty line set at 60% of median income, from 19% in 2004 to 16% in 2007. A decline in the consistent poverty rate, which combines income poverty and the enforced absence of at least two items from an eleven item deprivation scale, from 7% in 2004 to 5% in 2007. The rate of decline in poverty was lower than that anticipated by the targets set by NAPS. “The success of our economic recovery will not be judged exclusively by our ability to return to economic growth and fiscal stability; it will also be judged by our capacity to emerge from our current problems as a more just, socially inclusive and equitable society.”
      
The latest figures published by the CSO paint a grim picture in terms of employment and growth in Ireland.  There has been an annual decrease in employment by 33,400 since Q2 2011 and a 1.3% increase in unemployment over the same period.  This sustained and alarmingly high level unemployment combined with 0% growth in GDP in the second quarter of 2012 shows that current Government policy is not working.The labour force has declined by 29,500 people since Q2 2011. Alarmingly, this decline in the labour force is almost exclusively concentrated in the 20-24 and 25-34 age groups.There has been a decrease in employment of 33,400 in the same period. Long term unemployment now accounts for almost 60% of the total unemployment There was 0% growth in Q2 2012.ersonal expenditure, capital investment and Government expenditure all declined between Q1 and Q2 2012. Government continues to ignore the fact that a lack of jobs is causing the unemployment figures to remain alarmingly high, and that substantial measures are required immediately to address this issue.  The bailout process is not delivering in terms of growth, jobs and recovery.  The strategy being pursued by Government is not working and immediate additional action is required to address the unacceptable levels of unemployment and the lack of growth.Government should start by reversing the ratio of expenditure cuts to tax increases in the forthcoming budget, taking €2 in tax increases for every €1 in expenditure cuts.

New research published by Social Justice Ireland  shows that, while poverty in Ireland is high, Government policies since 1987 have been increasing the income of the richest ten per cent of households and widening the gap between these and the rest of society.Government policies over the past two decades have moved resources towards the top ten per cent of households in the income distribution.The top 10 per cent of Irish households receive almost a quarter (24.48%) of total disposable income - an increase of 1.34% on the situation in 1987. The EU/IMF Bailout and the Four-Year Recovery Plan are continuing the process of supporting the better-off and seem set to produce a dramatic increase in poverty and social exclusion. Welfare rates are being reduced, services are being cut and charges are being introduced and/or increased. Resources are being taken from the poor to bailout gambling bankers and senior bondholders and to increase the incomes of the top 10%.  This process of dispossessing poor people by appropriating their resources to pay for activities they had no hand, act or part in may be legal but it is deeply unjust and unfair.Other issues addressed in this latest analysis from Social Justice Ireland show that:There are more than 620,000 people (14.1% of the population) at risk of poverty in Ireland today i.e. their income is equivalent to less than €11,600 a year for a single person or €27,000 for a family of four.The number at risk of poverty would be more than three times higher if it weren’t for social welfare payments.Over 140,000 people are long-term unemployed - the highest since the late 1980.The risk of poverty in rural Ireland is 6% higher than in urban Ireland .Proposals from Social Justice Ireland:The EU/IMF and the Government’s approach to fiscal adjustment (i.e. emphasising cuts rather than broadening the tax base) is both unjust and unnecessary in a country with one of the lowest total tax-takes in the developed world.The human rights of poor people must be particularly protected in times of economic uncertainty.

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