Ireland - Poverty and wealth

Unprecedented growth in the Irish economy during the late 1990s saw living standards in terms of per capita GDP reach the EU average for the first time in 1998. However, rapid growth does not automatically translate

GDP per Capita (US$)
Country 1975 1980 1985 1990 1998
Ireland 8,605 10,044 10,944 13,907 23,422
United States 19,364 21,529 23,200 25,363 29,683
United Kingdom 13,015 14,205 15,546 18,032 20,237
France 18,730 21,374 22,510 25,624 27,975
SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.

into a better quality of life, and Ireland is by no means immune to the risk in all industrial societies: that of creating a society where the rich get richer and the poor stay poor.

Inequality in Ireland falls generally into 2 categories. The first is essentially that of poverty traditionally created by unemployment. Despite almost full employment , pockets of deprivation characterized by long-term unemployment, high dropout rates from education, and a dependency culture, prevail. These disadvantaged groups, frequently plagued by social ills such as the drug-culture, suffer markedly from the considerable increase in the cost of living. To relieve deprivation of this nature requires a sustained effort at introducing more comprehensive social policies. In 2000, the Irish government spent only 16 percent of GDP on social welfare compared to the EU average of 28 percent.

The second category of poverty, arising from the disparity of income among the employed, affects a larger number of households. Comparative studies published in Brian Nolan, Chris Whelan, and P.J. O'Connell's Bust to Boom , reveal Ireland, along with the UK and Portugal, to have a high rate of relative income poverty compared to other EU member states. While there were improvements in income earned by the unskilled, skilled, highly

Distribution of Income or Consumption by Percentage Share: Ireland
Lowest 10% 2.5
Lowest 20% 6.7
Second 20% 11.6
Third 20% 16.4
Fourth 20% 22.4
Highest 20% 42.9
Highest 10% 27.4
Survey year: 1987
Note: This information refers to income shares by percentiles of the population and is ranked by per capita income.
SOURCE: 2000 World Development Indicators [CD-ROM].

Household Consumption in PPP Terms
Country All Food Clothing and footwear Fuel and power a Health care b Education b Transport & Communications Other
Ireland 21 9 10 4 7 10 40
United States 13 9 9 4 6 8 51
United Kingdom 14 7 9 3 3 6 58
France 22 7 9 3 8 12 40
Data represent percentage of consumption in PPP terms.
a Excludes energy used for transport.
b Includes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

skilled, and educated employees alike, the overall trend from 1987 to 1997 brought more opportunities and higher wage increases for the latter 2 groups. This trend is more acute in Ireland than in other European states. The ESRI (Economic and Social Research Institute) points out that while the fortunes of wealthiest 10 percent of the employed population increased rapidly between 1987 and 1997, the top 5 percent rose even more rapidly. The only positive aspect of income distribution trends was that while the bottom, or poorest, 25 percent appeared to fall away from the average income, the bottom 10 percent did not, indicating that the very poor are not actually getting poorer. One further positive aspect is the increase in gender equality, with women moving to take advantage of increased employment opportunities. Women are establishing themselves as fundamental members of the labor force and improving their average take-home pay to 85 percent of that earned by their male counterparts.

However, trends in general income disparity are worsened by the crippling house prices. These either prevent many young people on average incomes from buying homes or leaves them with huge mortgage payments. Rents have spiraled due to shortages in the housing market. Exclusively located houses in Dublin have been sold for over I£6 million and, while this is not the norm, an adequate house with easy access to Dublin's city center costs between I£150,000 and I£500,000, having cost perhaps between I£30,000 and I£80,000 at the end of the 1980s.

The government does provide safety nets for those in need, granting free medical and dental care on the basis of means testing. Social welfare payments are available to the unemployed, but only to those who can provide an address, and there is some government-provided social, or corporation, housing. This scheme involves making low-rent housing available to the less well off, along with a tenant's long-term option of buying the government out. However, the service has suffered from the housing shortages, which show no signs of letting up (2001), and waiting lists are up to 18 months long.

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