# Social Welfare too high - discouraging people from taking up jobs?



## orka

There have been two letters to the Irish Times from employers experiencing issues with employing people.  On Monday, a guy opening a new restaurant received 400 applications - but only five were Irish  - and the the five Irish were full time students.  Today, the owner of an SME describes his search for a semi-skilled employee on 28K + company van + overtime - he got 200 applications and, separately, offered the job to two people, both of whom had been out of work for more than two years.  Both said they would take the job but then turned it down saying they were better off on social welfare with rent allowance etc. - even taking account of the back to work allowance.

In my view, this is just wrong - benefits shouldn't discourage people from accepting a reasonable job offer.  It's hard to blame the people themselves - when the choice is less money plus time away from home/family vs. more money plus all day at home/with family - who wouldn't make that choice?  The system is wrong when this happens - and it makes perpetuating the out-of-work cycle more likely - children will grow up in a home where there is no-one working - so the norm becomes 'sit at home and get state money' - they will have known nothing else.


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## WicklowMan

That's a very interesting post. I wonder about how honest the potential employer is being though ... 5 applications from Irish people? Given the number of applications mentioned, and anecdotal evidence to the contrary, that strikes me as extremely odd.

On the other hand, I myself got some part time work and my employer said that people on FAS courses which would cost thousands couldn't do it because they'd lose their places (we're talking Cisco exams, etc.) Something should be done to accommodate these people. Nothing should stop people from taking up work as they improve themselves.

I have a great suspicion of employers in this country though. During the 'boom' I worked for a multi-millionaire who was the biggest skinflint going ... and I knew plenty like him. These guys want the biggest and most expensive Merc / BMW's and 4 holidays per year, but are the first to complain about the cost of employees, who make them the money in the first place!

The dole is too high in a way, in another it's not. A TV license is almost one week's payment. Car insurance is half a week's payment. Half decent shopping for one person is 1/4, petrol is over €1.50 a litre ... the cost of living needs to come down and despite lots of talk, I see no evidence of it having happened. Everything went and stayed bananas after the great consumer - rape otherwise known as the introduction of the euro.


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## shnaek

From an article in the post this weekend:

"The most basic rate of welfare payment for the long-term unemployed amounts to €188 weekly in Ireland. That is equivalent to €819monthly.The most basic rate of welfare payment for the long-term unemployed in Germany (Hartz IV) amounts to €359 monthly, less than 45 per cent of the Irish rate."

There should never be an incentive not to work. Nor should there be an incentive to commit crime. In fact, both of these mindsets should be frowned upon, and actively discouraged. (Note that I am not talking about people who are unable to work)
Alas in Ireland we encourage ciminality, laziness and irresponsibilty at every level. It's disheartening.


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## Howitzer

I'm pretty sure I read that letter before and I'm calling shenanigans on it.

If I'm an employer offering a job I'd have given an indication of salary and would only expect applications from genuine candidates.

If I'm looking for someone on a relatively low salary I would offer it to someone I knew wanted the job, would accept the job, and having accepted it would work hard in the job. It's ageist I know, but I would offer that job to a young person without family as I would know they would fulfill those criteria.

I don't accept that someone who needs a job and wants a job would turn one down even if it offered nothing more than benefits. 

Any interviewer worth their salt would figure out the character of the person they were interviewing pretty quickly and wouldn't be offering a position to a person who then turns it down to sit home playing on the X-Box, especially when there were 200 candidates to choose from.


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## shnaek

Howitzer said:


> I don't accept that someone who needs a job and wants a job would turn one down even if it offered nothing more than benefits.



You'd like to think that alright, but you are wrong. I have firsthand experience of it. But I won't go into writing about it here, as anecdotal evidence could fill up pages and pages and never get us closer to consensus. Only when enough people experience something will things change. That is the way of things.


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## Howitzer

shnaek said:


> You'd like to think that alright, but you are wrong. I have firsthand experience of it. But I won't go into writing about it here, as anecdotal evidence could fill up pages and pages and never get us closer to consensus. Only when enough people experience something will things change. That is the way of things.


I also have first hand experience and would say the opposite, but the long and short of it is that if I had 200 candidates and the first turned me down I'd offer it to the next one. 

I wouldn't spend 1 second worrying about the first person and their reasons. I'd get on with running my business, not sending letters to the Times.


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## z107

> The dole is too high in a way, in another it's not. A TV license is almost one week's payment. Car insurance is half a week's payment. Half decent shopping for one person is 1/4, petrol is over €1.50 a litre ... the cost of living needs to come down and despite lots of talk, I see no evidence of it having happened. Everything went and stayed bananas after the great consumer - rape otherwise known as the introduction of the euro.


So people on the dole should be able to afford TVs and cars?
Why?

I'm sick of paying for other people's benefits.


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## orka

Howitzer said:


> I also have first hand experience and would say the opposite,


So you have first hand experience of people being offered jobs and accepting them? erm, I think that's the way it's supposed to work so I hope all of us have experience of this! 


Howitzer said:


> I wouldn't spend 1 second worrying about the first person and their reasons. I'd get on with running my business, not sending letters to the Times.


He is doing a service though to the rest of us who aren't employers who don't know what is happening to impact the spending of our taxes.  I'm not happy to know this but I'm glad I do - blissful ignorance is not so wonderful with the state our economy is in.


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## Firefly

umop3p!sdn said:


> I'm sick of paying for other people's benefits.




That's what I can't understand about PC Lefties....Their own taxes are paying for these benefits and they think it's OK.


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## Purple

We are expanding in work at the moment. We have the same problem we’ve always had; finding skilled people. We need young people with a good attitude who want to learn but we need skilled people as well. Despite pay levels ranging from €28’000 to €80’000 we can’t find people with the right skills. Over the last few years we have found them but they’ve been from England, Poland, Latvia, India and Russia.

Is welfare too high? Yes, but our lack of skills and belief that we are somehow better than our competitors also plays against us.


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## Latrade

umop3p!sdn said:


> So people on the dole should be able to afford TVs and cars?
> Why?


 
+1 

Cost of Living estimates should be based on essential items, not luxury. It was only in the last few years they actually took out the cost of cigarettes from this calculation. Effectively for the entire Social Partnership period, wage and welfare increases were influenced by the rising costs of cigarettes.


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## Latrade

Purple said:


> Despite pay levels ranging ... to €80’000 we can’t find people with the right skills.


 
PM'd my CV to you. Always said you were a top bloke.


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## Shawady

I posted about this before the budget last december.
At the time, my friend who has 3 children, was entitled to €415 a week unemployment benefit and €480 a month children's allowance. That amounts to €27,340 a year nett.
He is a home owner but if he was renting he would get an allowance to cover his rent, which would add approx 10k to that figure.


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## Staples

Purple said:


> Is welfare too high? Yes, but our lack of skills and belief that we are somehow better than our competitors also plays against us.


 
I think part of what's wrong is the belief that it's the function of the State to ensure that jobs are provided to match available skills.  

We have a high proportion of low skilled workers whose refusal to recognise and challenge their vulnerability to long-term unemployment is damaging themseleves and the country.


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## truthseeker

umop3p!sdn said:


> So people on the dole should be able to afford TVs and cars?
> Why?
> 
> I'm sick of paying for other people's benefits.


 

I think its important to distinguish what you mean here.

There is 'the dole'. What this really means is Jobseekers Allowance and Jobseekers Benefit. One of these is based on your PRSI contributions (can never remember which one off hand), and it lasts a year or so before it is means tested. Ive absolutely no issue with this allowing people to have TVs and cars. One would hope - this is a stopgap while the person gets another job.

But then there is the means tested one, plus the range of other benefits that one might be 'entitled' to (and in some cases accessed fraudently or accessed correctly but fraudently supplemented with black market/cash in hand). Someone who suffers from a severe dose of laziness and entitlement could live a reasonably nice lifestyle on these handouts - and imo - that is wrong. 

I firmly believe the social welfare system in this country needs a massive overhaul - and I know from posts Ive read on AAM that many other people feel the same way.

I too have firsthand experience of people refusing to work because 'ill lose me benefits' - and the benefits are worth more than the low pay of an unskilled job. Thats just wrong - there should never be a situation where staying on benefits is preferable to working.


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## Howitzer

Shawady said:


> I posted about this before the budget last december.
> At the time, my friend who has 3 children, was entitled to €415 a week unemployment benefit and €480 a month children's allowance. That amounts to €27,340 a year nett.
> He is a home owner but if he was renting he would get an allowance to cover his rent, which would add approx 10k to that figure.


Isn't that 480 a month a universal benefit he would get whether or not he was unemployed? Or are you just aggrandizing the amount for effect?


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## Shawady

Ture Howitzer, but he has no childcare costs because himself or the wife don't work. I have 3 children myself but the children's allowance would not cover what we pay to have the children minded while we are in work.
I wouldn't swap places with him, but just pointing out that the system doesn't encourage people to get back to work.


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## Howitzer

Shawady said:


> Ture Howitzer, but he has no childcare costs because himself or the wife don't work.


? Seriously?


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## WicklowMan

truthseeker said:


> Ive absolutely no issue with this allowing people to have TVs and cars. One would hope - this is a stopgap while the person gets another job.


 
+1

Exactly. A lot of people in this country - while they themselves are doing okay - are only too willing to bash those below them, with petty remarks about "oh they have mobile phones" or "they drive a car" or "they smoke" instead of looking at the class above where the real money goes (Seanie Fitzpatrick, etc.)

I wondered how long it would be before these kind of 'arguements' came up. Sure, we all know career dole-ists. The problem with the current system is that for career dole-ists it's a lot of money per week. For those actively seeking a job it's certainly not.

We had something like 160,000 people on the dole during the boom. Why were they left on it? I'm all for helping people off it, but urinating on them isn't going to produce a good outcome. Several people on SW have paid taxes for years, so all they are getting back is a little bit of their *own* money.

Last but not least, we have the 'Interview allowance'. This is available through CWO's, and amounts to €150. Who needs 150 quid to go to an interview? That should be split up into 3 installments of 50, with proof of attendance required in each case. There are umpteen ways to cut out waste - of which there is loads - in the system.

As for needing more staff to oversee all this, well, what was the Croke park agreement supposed to be for?


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## Purple

Howitzer said:


> Isn't that 480 a month a universal benefit he would get whether or not he was unemployed? Or are you just aggrandizing the amount for effect?



Yep, people on high incomes shouldn't get childrens allowance. I get around €7'500 per year in tax free welfare from the state because I have 4 children. That's crazy.


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## Purple

WicklowMan said:


> Exactly. A lot of people in this country - while they themselves are doing okay - are only too willing to bash those below them, with petty remarks about "oh they have mobile phones" or "they drive a car" or "they smoke" instead of looking at the class above where the real money goes (Seanie Fitzpatrick, etc.)


 True, but one doesn’t justify the other.



WicklowMan said:


> I wondered how long it would be before these kind of 'arguements' came up. Sure, we all know career dole-ists. The problem with the current system is that for career dole-ists it's a lot of money per week. For those actively seeking a job it's certainly not.


 Agreed.



WicklowMan said:


> We had something like 160,000 people on the dole during the boom. Why were they left on it? I'm all for helping people off it, but urinating on them isn't going to produce a good outcome. Several people on SW have paid taxes for years, so all they are getting back is a little bit of their *own* money.


 Very true.



WicklowMan said:


> Last but not least, we have the 'Interview allowance'. This is available through CWO's, and amounts to €150. Who needs 150 quid to go to an interview? That should be split up into 3 installments of 50, with proof of attendance required in each case. There are umpteen ways to cut out waste - of which there is loads - in the system.
> 
> As for needing more staff to oversee all this, well, what was the Croke park agreement supposed to be for?


Yep, I agree with you there as well.


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## Protocol

I saw the two letters in the Irish Times. They seemed genuine.

Here are some int'l comparisons:

*USA*

JSB = 50% of former wage for 26 weeks, now extended to 99 weeks in the recession
JSA = none, but there is TANF payment for families

*Germany*

JSB / UI = 50%-60% of former wage for 12 months
JSA = 359 pm or 83 pw plus non-cash benefits

*Denmark*

JSB = Unemployment benefits can be paid up to a maximum of 90% of the previous work income, however, no more than the maximum rate of unemployment benefits of DKK 3760 (€ 495) per week.
A member has a right to unemployment benefits for a maximum of two years in total within three years. 


My suggestion, which I have called for before, is:

JSB = *increase* to 250 pw for 12 months
Extend JSB to 18 months or maybe 24 months during recessions.

JSA = abolish it, or restrict its duration across your lifetime


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## z107

> Exactly. A lot of people in this country - while they themselves are doing okay - are only too willing to bash those below them, with petty remarks about "oh they have mobile phones" or "they drive a car" or "they smoke" instead of looking at the class above where the real money goes (Seanie Fitzpatrick, etc.)


I don't see people on the dole as below me. According to this thread, many seem to be far better off. That, surely is the problem.

I also hate the idea of TDs getting multiple pensions, perks and unvouched expenses (ie theft). I don't have a problem with people who are richer than me through hard work.


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## DerKaiser

Protocol said:


> *Germany*
> JSA = 359 pm or 83 pw plus non-cash benefits


 
This is why we have no credibility in europe.

As long as the long term unemployed continue to enjoy benefits far in excess of those in europe and as long as we have a minimum wage higher than the countries who are being asked to lend us money, we will find it hard to get a sympathetic ear in europe.

No argument can make a long term unemployed person on €188 p.w. with a medical card and rent subsidy in Ireland worse off than their german counterpart.

It would be very nice to continue to have minimums we have in terms of social welfare. But if protecting some of those minimums is preventing us from making a case to europe to retain our corporation tax levels or preventing us from forcing burden sharing with those who funded the banks, we are setting the country up to have a lot more people living on a lot less than the current minimum.


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## Purple

DerKaiser said:


> This is why we have no credibility in europe.
> 
> As long as the long term unemployed continue to enjoy benefits far in excess of those in europe and as long as we have a minimum wage higher than the countries who are being asked to lend us money, we will find it hard to get a sympathetic ear in europe.
> 
> No argument can make a long term unemployed person on €188 p.w. with a medical card and rent subsidy in Ireland worse off than their german counterpart.
> 
> It would be very nice to continue to have minimums we have in terms of social welfare. But if protecting some of those minimums is preventing us from making a case to europe to retain our corporation tax levels or preventing us from forcing burden sharing with those who funded the banks, we are setting the country up to have a lot more people living on a lot less than the current minimum.



How dare you use logic and reason! We have to look after _"the most vulnerable in society"_.


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## Howitzer

The letter writer, David Lawlor, gets a nice article today.

This is someone who seems au fait with [broken link removed]in the promotion of his business.


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## Shawady

Purple said:


> Yep, people on high incomes shouldn't get childrens allowance.


 
Depends what you call high incomes.
A combined income of 150-200K maybe, but how many people are on this.
If they set the cut-off point too low it will be a further barrier to getting people back to work. It would require a good salary to encourage someone to give up 7.5K, using your example.


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## Protocol

delete


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## Purple

Shawady said:


> Depends what you call high incomes.
> A combined income of 150-200K maybe, but how many people are on this.
> If they set the cut-off point too low it will be a further barrier to getting people back to work. It would require a good salary to encourage someone to give up 7.5K, using your example.



Get rid of it altogether and introduce a refundable tax credit. That way the cost of delivery to the state is also vastly reduced. 
At the moment the government takes €8’000 (or so) from me in taxes and gives it back to me less the administrative cost. It’s a circular transaction that creates jobs for clerical  and post office staff.


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## Yorrick

I really think that we cannot pay any attention to what employers say. We saw the reaction of O Callaghan Hotels to the cut in minimum wage.  At least those workers had a union to defend them.
It wasn't the social welfare receipients that landed us in the mess we are in


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## Purple

Yorrick said:


> I really think that we cannot pay any attention to what employers say. We saw the reaction of O Callaghan Hotels to the cut in minimum wage.  At least those workers had a union to defend them.


It will turn out to be a pyrrhic victory if the hotels in question go bust. 




Yorrick said:


> It wasn't the social welfare receipients that landed us in the mess we are in


 Agreed but if a high minimum wage and welfare rates relative to our European competitors is contributing to us staying in the mess then we should reduce it.


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## Pique318

Howitzer said:


> The letter writer, David Lawlor, gets a nice article today.
> 
> This is someone who seems au fait with [broken link removed]in the promotion of his business.


Good for him. Maybe that's how he's now able to advertise jobs worth 28k.
I detect a note of sourness in your post, however.



Purple said:


> It will turn out to be a pyrrhic victory if the hotels in question go bust.


If they do, then saving E40 per member of the housekeeping staff per week isn't gonna make much difference. It'll be poor decisions on a greater scale that will have brought them to this point in the first place.


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## Purple

Pique318 said:


> If they do, then saving E40 per member of the housekeeping staff per week isn't gonna make much difference. It'll be poor decisions on a greater scale that will have brought them to this point in the first place.


 I agree that it was the bigger decisions that got them to this point but, again, cutting wages may be necessary to get them out of the hole they are in. It’s not just the €40 per week that’s saved, it’s the fact that their wage scale now starts at a lower level so all higher wages can be lowered accordingly for future hires.


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## Mpsox

I can only speak of my own personal experience as an employer. over the last couple of years or so, we've advertised a small number of entry level positions at a salary of around and about 15% above the minimum wage. The vast majority (99%)  of applicants for those positions used to be non nationals but in recent months, it has changed to probably 60/40 non nationals to Irish people. 

I don't think it was simply down to social welfare why Irish people were not applying, I also think there was an attitude/expectation issue as well. I've interviewed Irish graduates for other roles who have asked me questions about travel allowances, expenses policy, career breaks and literally in one case "can I see what my office would be like?". I've never got those kind of questions from non-nationals. I find it bizarre that a lot of Irish people will not take entry level rolls here but are happy to work in a shop in Auz


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## Howitzer

Pique318 said:


> Good for him. Maybe that's how he's now able to advertise jobs worth 28k.
> I detect a note of sourness in your post, however.


I'm not sure what you men by sourness. I called bs on this letter from the first post. 

Everyone has their own agenda on these things. The rights and wrongs of a benefits culture are emotive and my opinion on the matter flip flops on a regular basis. However hijacking that kind of emotive issue solely for the purpose of self promotion isn't something I've any time for.

Were there ever 2 jobs advertised? 



> First,the businessman offered the position to a Romanian national who  has been living here for a number of years. But he quit after just one  day.
> "He's married, with kids, and is renting," said Mr Lawlor, adding that the man qualifies for multiple types of social welfare.
> "He'd  been working for a rival but had been let go two years ago. He started  on the Tuesday and on the Wednesday he said he felt he was entitled to  more money.
> "He said he'd get more money on the dole."
> Mr  Lawlor had pointed out to the man that he could also earn overtime, at  one-and-a-half times the rate, as well as have the use of a company van  for incidental personal use.
> "A lot of these guys are handy, so they do nixers; they have that on top of their dole."
> The  following week Mr Lawlor offered the job to a Filipino national, who,  he said, had the skills required and had done the "best ever interview".  He had been living here for several years, had four children and drove  an "06 or 07 car".



A Romanian and a Filipino. These sound very cliched descriptions along the lines of "It was a black man what robbed me".

What's your opinion? Do you think the guy is 100% genuine or just making it up for the free publicity?


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## Art

I knew him in college actually. A nice enough fella, an incredibly hard worker and as straight as a dye although he would make Michael O'Leary look like a Trotskyite. I don't believe for a second that he is anything less than 100% genuine.


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## cork

Mpsox said:


> I find it bizarre that a lot of Irish people will not take entry level rolls here but are happy to work in a shop in Auz



Thats an interesting point - working abroad at an entry level level job is ok but not at home.

If I lost my job tomorro - I would take any job in a shop, bar or hotel.


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## Chris

It is a sad state of affairs when you see such reports and the general sense of entitlement in society, but I really am not surprised. Only in the last couple of decades has this entitlement filtered through. In my fathers and grandfathers generation you would only accept a government cheque if it was absolutely necessary for mere survival. And you certainly would accept any kind of work in order to provide for your family.
To this day my grandfather refuses to be financially assessed to see whether some of my grandmothers nursing home care could be paid for. His attitude is that while he can afford to pay for it he will pay for it.



shnaek said:


> "The most basic rate of welfare payment for the long-term unemployed amounts to €188 weekly in Ireland. That is equivalent to €819monthly.The most basic rate of welfare payment for the long-term unemployed in Germany (Hartz IV) amounts to €359 monthly, less than 45 per cent of the Irish rate."


And in Germany when you get to the Hartz IV stage you also have to work in order to get full entitlements. This creates (a) an incentive to look for and accept any work that pays more and (b) gives unskilled people the chance of some work experience.



Howitzer said:


> I wouldn't spend 1 second worrying about the first person and their reasons. I'd get on with running my business, not sending letters to the Times.


But isn't a situation where your first pick, who would probably be the best suited, is not working for you because social welfare entitlements are essentially competing with you, rather than your competitors, worth reporting on?



Staples said:


> I think part of what's wrong is the belief that it's the function of the State to ensure that jobs are provided to match available skills.


This is a very good point. If there is no job for your skill set then you should do something about your skill set and not look to government to do something about getting you a job.



WicklowMan said:


> Exactly. A lot of people in this country - while they themselves are doing okay - are only too willing to bash those below them, with petty remarks about "oh they have mobile phones" or "they drive a car" or "they smoke" instead of looking at the class above where the real money goes (Seanie Fitzpatrick, etc.)


Seanie and his cronies are just one example. There are far more people on high incomes that have that income because of their skills, work ethic, risk taking, entrepreneurial ability, etc. It is far more common for a public call on "taxing the rich" so that they pay their fair share, than for the public to call on bringing social welfare payments to more reasonable levels.
I think the average Joe should be publicly thanking the top 20% of income earners for picking up 80% of the income tax bill. If there are any income tax payers close to 50% deductions reading this thread, I, an average income earner, whole-heartedly say thank you.



WicklowMan said:


> We had something like 160,000 people on the dole during the boom. Why were they left on it? I'm all for helping people off it, but urinating on them isn't going to produce a good outcome. Several people on SW have paid taxes for years, so all they are getting back is a little bit of their own money.


I would rather ask why were they not kicked off the dole. How can 160,000 claim unemployment when over 200,000 eastern Europeans arrived here and got work?
As the whole social welfare system is a ponzi scheme, nobody who claims social welfare after years of employment is getting any of their own money back.


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## cork

But there is also job snobbery in Ireland by employers and employees.

Some people won't take certain jobs as it woud ruin their CVs.

Employers can have a funny atitude towards people taking entry level jobs.

People prefer to say that they are "bewteen jobs" rather than doing an entry level job.

Working anti socail hours can be frowned upon & it should show a work ethic.


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## Purple

I think the problem some employers have of giving entry level jobs to high skilled people is that they know those people will move on as soon as something better comes along. High staff turnover is a major cost as even low skilled jobs require training.


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## Firefly

cork said:


> Employers can have a funny atitude towards people taking entry level jobs.



I would like to think this is not the case..and the opposite would happen..that the employer would be impressed with someone going down a few notches if nothing else was available. The person could also upskill on their own time during this period too..


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## cork

But is job snobbery common?

Would people prefer to say that they are bewteen jobs than taking an entry level job?


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## WicklowMan

Just to focus again on the subject of 'Lazy' people who are long - term unemployed. I think that needs to be defined. I can certainly say from my spells out of work it can get very depressing, and you can almost end up thinking you are unemployable after so many knocks.

It's a great buzz for a while jobseeking after a job ends, but this soon wears off - and let's face it, some employers positively take the pee. What I refer to is 'interviews' for 'jobs' that are already gone. I could never figure out the motive behind this, but can only guess that in some industries it's beneficial to pretend to seek Irish staff and then apply for a work permit for someone from abroad. 

I've gotten loads of contradictory 'reasons' for being refused a job in the above scenario. I went for one job where I was told that I mightn't be qualified, then I was told that it wouldn't suit me as I'm too intelligent and would get bored! Loony stuff! I think some sort of quality control needs to come into the system, and especially in FAS advertised jobs. 

It is the responsibility of an employer not to waste peoples' time imho (we won't even start on Recruitment agencies!) This has the effect of eroding confidence on the part of the prospective employee when it happens again and again, and yes, it leads to long - term unemployment. Most people in the latter category have given up. I wouldn't necessarily call it "Laziness".


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## horusd

I have a Polish friend who has been on JSA for the last 13 months. Lost his job last Feb and decided to take a few months off on welfare. From memory he got some of his tax back as well.  Never bothered his barney even looking for a job until January 2011.  He had a car loan and insurance for it, and they have been paying this for him. His rent was subsidized by welfare  in a semi-dodgey private arrangement with his landlord. He basically didn't do a tap and thought it was amazing that Ireland was being so generous to him. As it happened, taking all into account he was better off by about 25 euros a month!

Apparently in Poland he would get six months of very little welfare and that's it. He also would be required to show ongoing letters from various employers to state he had applied for jobs before receiving any benefit.

 I know for a fact he has a fair few bob saved up.  He was recently means-tested and passed that. How I do not know. Myself and other friends have encouraged him to get a job, do a training course or at least volunteer for something, but he has no real interest in doing anything. He does a few small nixers (he's a computer buff) and gets an add'l 100 -200 a month.  He has now applied for a medical card today. It makes me sick to the teeth to be honest.  His (and my) mutual Polish friends are disgusted and embarassed to the point of hardly speaking to him. They rightly feel he is abusing the system. One of them has told him that he should go back to Poland and stop sponging off the Irish state. Another told him that his taxes are paying for him to sit on his ass, I have said the same thing to him. I have also told him that were I an employer, I would have serious reservations about employing anyone who did nothing at all for more than a year. None of this cuts any ice with him. I make no issue of his being Polish - but no one should be able to get away with this.


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## cork

'Interviews' for 'jobs' that are already gone. I haerd of a case over the weekend on this. Can't understand the reasoning behid it.

The one thing find strange is the lack of training courses as an alternative to the dole.

People are waiting ages for any type of of course.


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## Purple

WicklowMan said:


> Just to focus again on the subject of 'Lazy' people who are long - term unemployed. I think that needs to be defined. I can certainly say from my spells out of work it can get very depressing, and you can almost end up thinking you are unemployable after so many knocks.
> 
> It's a great buzz for a while jobseeking after a job ends, but this soon wears off - and let's face it, some employers positively take the pee. What I refer to is 'interviews' for 'jobs' that are already gone. I could never figure out the motive behind this, but can only guess that in some industries it's beneficial to pretend to seek Irish staff and then apply for a work permit for someone from abroad.
> 
> I've gotten loads of contradictory 'reasons' for being refused a job in the above scenario. I went for one job where I was told that I mightn't be qualified, then I was told that it wouldn't suit me as I'm too intelligent and would get bored! Loony stuff! I think some sort of quality control needs to come into the system, and especially in FAS advertised jobs.
> 
> It is the responsibility of an employer not to waste peoples' time imho (we won't even start on Recruitment agencies!) This has the effect of eroding confidence on the part of the prospective employee when it happens again and again, and yes, it leads to long - term unemployment. Most people in the latter category have given up. I wouldn't necessarily call it "Laziness".



I agree with all of that. Everybody deserved to be treated with respect. Calling someone for an interview for a job that's gone shows no respect for that person.


----------



## ali

My sister in law went for an interview last week as a home carer with an agency at a rate of approx €11.50 per hour. She has been on UB for a year after being made redundant from her job of 18 years. She has just moved onto JA from the JB and is starting to get desperate.

 She would love to take the home care job but wouldn't be guaranteed the full hours. So she may only get eight hours a week over four mornings from the agency but the Social welfare count that as four days work and would dock her benefit accordingly. So she would be at a huge disadvantage by taking up the position even though she would love the job and be really good at it.

It's those kind of anomalies which are so difficult to rectify in as large a system as social welfare.


----------



## cork

But with a lack of training courses available to the unemployed - is the government only adding to a welfare culture?


----------



## Complainer

umop3p!sdn said:


> I'm sick of paying for other people's benefits.



I'm sick of paying for the roads that you drive on.



umop3p!sdn said:


> I also hate the idea of TDs getting multiple pensions, perks and unvouched expenses (ie theft).


Nonsense. Unvouched expenses are not theft. Many private companies agree fixed unvouched rates for staff who are on the road, such a fixed lunch amount, or a fixed overnight rate. It is up to the individuals themselves to get value for money within these rates, and no-one has to spend time poring over receipts to check whether the glass of wine is included or excluded. Unvouched expenses are a sensible solution. I was away on a day trip to the UK recently, leaving the house at 5am and returning after 9pm. My unvouched expense allowance was the princely some of €18.38, as my hosts provided sandwiches at lunchtime. So I have to get breakfast and dinner out of that some - I'll be lucky if I break even.

Here's an interesting alternative (i.e. based on the facts, rather than based on a letter to the Indo) view.

http://www.progressive-economy.ie/2011/03/life-of-luxury-on-dole.html


----------



## shnaek

Complainer said:


> I'm sick of paying for the roads that you drive on.


His/her road taxes pay for the roads he/she drives on. In fact they pay for more than the roads, so where's the extra money going?


----------



## cork

shnaek said:


> so where's the extra money going?



The motortax money goes into a local government fund - it is not ring fenced for roads.


Social Welfare too high - discouraging people from taking up jobs?

But when jobs and training places are hard to come by - people have little few choices.

It is funny how schools/colleges are under-utilised over the Summer months.


----------



## Firefly

Complainer said:


> I'm sick of paying for the roads that you drive on.



I'm confused by this. Do you not use the road system at all? Investment and taxes to pay for roads benefit all people either directly or indirectly. Benefits paid from taxes to certain individuals only benefit the receivors.


----------



## WicklowMan

cork said:


> But with a lack of training courses available to the unemployed - is the government only adding to a welfare culture?



That's a very interesting question. I pulled out all the stops to get together an impressive portfolio for a course that was advertised to begin in February but guess what? - it got shelved.

The reason? - no one knew what the hell was going on in the country, so the funding was pulled. Paralysis / fear is the worst ... mixed with procrastination it's all but destroyed the country. _*Hopefully*_ a new Government will change that.


----------



## Complainer

Firefly said:


> Benefits paid from taxes to certain individuals only benefit the receivors.


That's not true. Spending from benefits has knock-on economic effects. Spending by people on benefits has benefits for their community. It keeps people off the streets. It stops people from begging. It keeps their kids in school. It keeps people out of hospitals.

It has as much benefit to society at large as a high-profile toll road.


----------



## Firefly

Complainer said:


> That's not true. Spending from benefits has knock-on economic effects. Spending by people on benefits has benefits for their community. It keeps people off the streets. It stops people from begging. It keeps their kids in school. It keeps people out of hospitals.




...it keeps people from going back into the work force..


----------



## Complainer

Firefly said:


> ...it keeps people from going back into the work force..


Well I guess if a letter writer to the Irish Indo says so, then it must be true. No-one could argue with indisputable evidence.


----------



## Firefly

Complainer said:


> Well I guess if a letter writer to the Irish Indo says so, then it must be true. No-one could argue with indisputable evidence.



Starting with the definition...Poverty trap Definition



Situation created by tax laws and income related social security benefits that prevents people from climbing out of welfare dependency. If these people strive and earn more, they move into higher tax brackets and end up having even less disposable income than before. After trying several times, they generally give up and may accept the situation as their fate.

http://www.thefreedictionary.com/poverty+trap

(Sociology) the situation of being unable to escape poverty because of being dependent on state benefits, which are reduced by the same amount as any extra income gained


From the first page result in Google for Poverty Trap Ireland

http://www.irishcatholic.ie/site/content/lone-parents-caught-poverty-trap

'Often lone parents are living in private, rented accommodation using a rent supplement.

''If they go out to work they can lose that rent supplement, but they are not earning enough to pay the rent and childcare on their own. They are caught in a poverty trap that works against people who are trying to move on and it is crippling lone parents,'' he said.


[broken link removed]

The Children’s Rights Alliance (CRA)
Mr Lenihan’s decision to bring families on the minimum wage into the tax net...will create a "poverty trap for poor working families" who are now faced with the reality that "it makes more financial sense for parents to claim the dole than go to work", the CRA said an increase in child poverty is inevitable.

Read more: [broken link removed]

[broken link removed]

http://www.independent.ie/opinion/a...verty-trap-easier-said-than-done-2573520.html

SOCIAL welfare rates were controversially cut in the last two Budgets -- but they are still so generous that many low to middle-income families would be better off on welfare.


----------



## shnaek

Firefly said:


> ...it keeps people from going back into the work force..



And, unpopular as it is to say it, it encourages people to create more people who will live on benefits, who will in turn create more people - just like this chap:
http://www.dailymail.co.uk/news/art...-cost-taxpayer-1-5m-time-theyve-grown-up.html

As long as it pays to be irresponsible, people will be irresponsible. This is true of government as it is true of society.


----------



## Firefly

He must be a fair oul man in the sack all the same!


----------



## shnaek

Firefly said:


> He must be a fair oul man in the sack all the same!



lol! And the girl he's with in the pic isn't bad either - maybe he has the right idea!


----------



## Mpsox

Firefly said:


> ...it keeps people from going back into the work force..


 
That's a very braod generalisation but it can act as a deterrent for some people to go back into the workforce, in particular where there is no financial incentive to return to work


----------



## Chris

Complainer said:


> That's not true. Spending from benefits has knock-on economic effects. Spending by people on benefits has benefits for their community. It keeps people off the streets. It stops people from begging. It keeps their kids in school. It keeps people out of hospitals.



This is a total economic fallacy! You cannot take money out of one part of the economy, give it to someone else within the same economy (while using up some of it) and then claim that the economy and society is better off. It is just as spurious as taking a bucket of water from the deep end of a pool, tipping it into the shallow end, and then claiming there is more water in the pool.
This falls under the same broken window fallacy as I posted earlier here: http://www.askaboutmoney.com/showthread.php?t=152904



Complainer said:


> Well I guess if a letter writer to the Irish Indo says so, then it must be true. No-one could argue with indisputable evidence.



It is basic economics and does not require indisputable evidence. When social welfare rises to levels where it directly competes with businesses' ability to hire staff then people will not not be incentivised to work. The lower a person's productivity, and therefore potential wages, and the higher the social welfare "entitlement" is, the larger the disincentive.


----------



## Purple

shnaek said:


> lol! And the girl he's with in the pic isn't bad either - maybe he has the right idea!



You can imagine the conversation in the dole office;
"So Mr.MacDonald, you still haven't got a job. Can you tell us why"

"I'm a lover, not a worker"


----------



## Purple

Chris, you're wasting your time. So long as you understand that then I hope keep posting as I find your posts interesting and informative but don't bang your head too hard off that brick wall.


----------



## horusd

shnaek said:


> And, unpopular as it is to say it, it encourages people to create more people who will live on benefits, who will in turn create more people - just like this chap:
> http://www.dailymail.co.uk/news/art...-cost-taxpayer-1-5m-time-theyve-grown-up.html
> 
> As long as it pays to be irresponsible, people will be irresponsible. This is true of government as it is true of society.


 

Whatever his attraction is, it's definitely not his looks, his money or his trackie fashion sense. One of the girls said he'd moved his xbox in and she had his picture on her phone & screensaver, must be serious so, love in the modern age eh?


----------



## Complainer

Firefly said:


> Starting with the definition...Poverty trap Definition
> 
> 
> 
> Situation created by tax laws and income related social security benefits that prevents people from climbing out of welfare dependency. If these people strive and earn more, they move into higher tax brackets and end up having even less disposable income than before. After trying several times, they generally give up and may accept the situation as their fate.
> 
> http://www.thefreedictionary.com/poverty+trap
> 
> (Sociology) the situation of being unable to escape poverty because of being dependent on state benefits, which are reduced by the same amount as any extra income gained
> 
> 
> From the first page result in Google for Poverty Trap Ireland
> 
> http://www.irishcatholic.ie/site/content/lone-parents-caught-poverty-trap
> 
> 'Often lone parents are living in private, rented accommodation using a rent supplement.
> 
> ''If they go out to work they can lose that rent supplement, but they are not earning enough to pay the rent and childcare on their own. They are caught in a poverty trap that works against people who are trying to move on and it is crippling lone parents,'' he said.
> 
> 
> [broken link removed]
> 
> The Children’s Rights Alliance (CRA)
> Mr Lenihan’s decision to bring families on the minimum wage into the tax net...will create a "poverty trap for poor working families" who are now faced with the reality that "it makes more financial sense for parents to claim the dole than go to work", the CRA said an increase in child poverty is inevitable.
> 
> Read more: [broken link removed]
> 
> [broken link removed]
> 
> http://www.independent.ie/opinion/a...verty-trap-easier-said-than-done-2573520.html
> 
> SOCIAL welfare rates were controversially cut in the last two Budgets -- but they are still so generous that many low to middle-income families would be better off on welfare.



Thanks for the primer, though I note your fairly selective quoting from those articles. Strange that you didn't choose to quote the "The problem is that despite mutterings from the Government, welfare payments are too low and support for children is certainly inadequate" bit. 

I'm well aware of poverty traps, and their dangers. The gist of this thread was not that 'property traps are a problem'. The gist of this thread was that welfare payments must be cut. That's a fairly different argument.



Chris said:


> This is a total economic fallacy! You cannot take money out of one part of the economy, give it to someone else within the same economy (while using up some of it) and then claim that the economy and society is better off. It is just as spurious as taking a bucket of water from the deep end of a pool, tipping it into the shallow end, and then claiming there is more water in the pool.
> This falls under the same broken window fallacy as I posted earlier here: http://www.askaboutmoney.com/showthread.php?t=152904


No broken windows or swimming pools here. The claim was made that "Benefits paid from taxes to certain individuals only benefit the receivors (sic)". This is factually untrue. Benefits paid from taxes to certain individuals go way beyond those individuals. An awful lot of this money goes into retail, paying for goods and staff. Some of it comes back in tax, particularly VAT and customs duties.


----------



## Purple

Complainer said:


> Benefits paid from taxes to certain individuals go way beyond those individuals. An awful lot of this money goes into retail, paying for goods and staff. Some of it comes back in tax, particularly VAT and customs duties.


Chris has explained to you in simple factual detail why this is incorrect and you choose to ignore what he said because the truth doesn't suit your ideology.
I will repeat two things I have said in the past;
1)	Discussing economics with a socialist is like discussing evolution with a creationist.
2)	There are none as blind as those that will not see.


----------



## Chris

Purple said:


> Chris, you're wasting your time. So long as you understand that then I hope keep posting as I find your posts interesting and informative but don't bang your head too hard off that brick wall.


I understand your sentiment, and I certainly often feel that way. However, while I don't think an entrenched socialist will ever open their eyes to the realities of economics, I do think that other people reading my posts will benefit from seeing the obvious fallacies proclaimed and perpetrated by socialists.



Complainer said:


> No broken windows or swimming pools here. The claim was made that "Benefits paid from taxes to certain individuals only benefit the receivors (sic)". This is factually untrue. Benefits paid from taxes to certain individuals go way beyond those individuals. An awful lot of this money goes into retail, paying for goods and staff. Some of it comes back in tax, particularly VAT and customs duties.



But the money welfare recipients spend and hand over to businesses is taken from those businesses and their employees in the first place! No matter how hard you try to explain the economic "benefits" of welfare spending, it is simply economic nonsense. There is *no* gain to the economy by taking from one group of people and then giving it to another group. The only people that gain are those receiving the benefits at the expense of those that pay for them.


----------



## Complainer

Chris said:


> But the money welfare recipients spend and hand over to businesses is taken from those businesses and their employees in the first place! No matter how hard you try to explain the economic "benefits" of welfare spending, it is simply economic nonsense. There is *no* gain to the economy by taking from one group of people and then giving it to another group. The only people that gain are those receiving the benefits at the expense of those that pay for them.



Money is not 'taken from those businesses and their employees'. Money is collected in taxation through VAT (from everyone who spends money in the State), PAYE (from employees), PRSI/Corporation Tax from businesses, Customs/Excise (from everyone who drives, or drinks, or smokes). 'Businesses and their employees' do not have a monopoly on paying tax. 

Those businesses that benefit from welfare spending get particular benefits from that spend. Employees in those retail benefits get particular benefits from that spend.


----------



## Chris

Complainer said:


> Money is not 'taken from those businesses and their employees'. Money is collected in taxation through VAT (from everyone who spends money in the State), PAYE (from employees), PRSI/Corporation Tax from businesses, Customs/Excise (from everyone who drives, or drinks, or smokes). 'Businesses and their employees' do not have a monopoly on paying tax.
> 
> Those businesses that benefit from welfare spending get particular benefits from that spend. Employees in those retail benefits get particular benefits from that spend.



This is nonsense again. The businesses and their employees that receive business from welfare recipients pay taxes to pay those welfare recipients as does everyone else who somehow or other pays taxes. Unless the money comes from a donor outside the domestic economy there is no net gain. You are simply taking from one group of people, wasting some in administration and then giving it to another group. The businesses where welfare recipients spend their money would be at least as well off if they were not taxed as highly in order to pay for welfare. No matter how hard you try to paint some illusory general benefit to an economy through wealth redistribution, it does not stand up to very basic economics.


----------



## Complainer

Chris said:


> The businesses where welfare recipients spend their money would be at least as well off if they were not taxed as highly in order to pay for welfare.


I'd really love to see your economic analysis to back this up. There are many businesses that do very well from welfare spenders. There are some businesses in some parts of the cities that depend almost entirely on welfare spending, and would simply fold up without it.

The primary beneficiaries of welfare are of course the welfare recipients. But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend.


----------



## Sunny

Complainer, your argument does not stand up economically. If what you are saying is true, then why not give benefits to everyone as long as they spend it? Why are you so against tax breaks that encourage investment? As Chris says, all social welfare does is re-distributes wealth. It does not add anything to economic growth.


----------



## orka

Complainer said:


> But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend.


What is the economic benefit in taking an extra €10 of tax from me and giving €10 of extra benefit to a welfare recipient? It's €10 less for me to spend and an extra €10 for someone else to spend - where's the 'economic benefit'?


----------



## Complainer

Gents, perhaps you'd like to go back and look at the issue that I'm actually argueing here. Firefly said;



> Benefits paid from taxes to certain individuals only benefit the receivors (sic).



I pointed out that, as a matter of fact, this is not true. The retail businesses where benefit recipients spend their money also benefit. That is a simple fact.


----------



## Sunny

Your argument is still flawed. If no benefits were paid, people would pay less tax and therefore have more spending power or the money would be spent in another way. Therefore the overall effect on the economy is the same. The paying of benefits doesn't benefit businesses. It's a social policy, not an economic policy.


----------



## horusd

Sunny said:


> Your argument is still flawed. If no benefits were paid, people would pay less tax and therefore have more spending power or the money would be spent in another way. Therefore the overall effect on the economy is the same. The paying of benefits doesn't benefit businesses. It's a social policy, not an economic policy.


 
Sunny there maybe a counter-argument to this. If a person is paid so much that it exceeds their ability to spend it and they save it instead (or indeed use it abroad), then this money is effectively removed from the real economy and becomes unproductive. If on the other hand the money is redistributed via the tax and welfare systesms all of it is spent because it must be spent by the recipient, then the it re-enters the active economy and contributes to economic activity which entails jobs, more taxes etc. In short, it keeps money circulating.


----------



## Complainer

Sunny said:


> Your argument is still flawed.


Which of my arguments specifically are you referring to?


----------



## Purple

horusd said:


> Sunny there maybe a counter-argument to this. If a person is paid so much that it exceeds their ability to spend it and they save it instead (or indeed use it abroad), then this money is effectively removed from the real economy and becomes unproductive. If on the other hand the money is redistributed via the tax and welfare systesms all of it is spent because it must be spent by the recipient, then the it re-enters the active economy and contributes to economic activity which entails jobs, more taxes etc. In short, it keeps money circulating.



That's a very specific example. It's more probable that the high income person will spend more of their money on goods and services that incur VAT and so return more to the exchequer.


----------



## ontour

If welfare spending has such a positive economic impact, then as unemployment rises many businesses must be doing better.

Alternatively we could double the current welfare rates to provide the economy with the boost needed.  The businesses would then need more staff and......


----------



## Perplexed

I just want to add a new dimension to this thread.  My brother who has lived in Australia for over 40yrs has a Plant Hire business there.  In the usual run of things he employs a lot of Irish lads.

Recently there were a few employees who decided they were coming home.  When he asked why, they said they'd be better off at home on the dole!!

He was absolutely shocked.  He had never seen such an attitude in his working life and thought it no wonder Ireland is in such dire straits if that's the attitude that prevails now.


----------



## Complainer

horusd said:


> Sunny there maybe a counter-argument to this. If a person is paid so much that it exceeds their ability to spend it and they save it instead (or indeed use it abroad), then this money is effectively removed from the real economy and becomes unproductive. If on the other hand the money is redistributed via the tax and welfare systesms all of it is spent because it must be spent by the recipient, then the it re-enters the active economy and contributes to economic activity which entails jobs, more taxes etc. In short, it keeps money circulating.




Good point - indeed, these moves may well take money that would have been invested abroad, either in property or international shares and recycle it within the Irish economy.




Perplexed said:


> I just want to add a new dimension to this thread.  My brother who has lived in Australia for over 40yrs has a Plant Hire business there.  In the usual run of things he employs a lot of Irish lads.
> 
> Recently there were a few employees who decided they were coming home.  When he asked why, they said they'd be better off at home on the dole!!
> 
> He was absolutely shocked.


I'd be absolutely shocked if the Irish education system is turning out people so dumb as to not realise the short-term nature of Job Seekers Benefit.


----------



## Purple

Complainer said:


> Good point - indeed, these moves may well take money that would have been invested abroad, either in property or international shares and recycle it within the Irish economy.



This post clearly shows what happens when economic policy is based on dogma rather than logic. 

To show what utter nonsense Complainers arguement is just read ontours post;


> If welfare spending has such a positive economic impact, then as unemployment rises many businesses must be doing better.
> 
> Alternatively we could double the current welfare rates to provide the economy with the boost needed. The businesses would then need more staff and......


Using Complainer logic all we have to do to get out of this recession is increase welfare.


----------



## horusd

ontour said:


> *If welfare spending has such a positive economic impact, then as unemployment rises many businesses must be doing better.*
> 
> Alternatively we could double the current welfare rates to provide the economy with the boost needed. *The businesses would then need more staff and......*


 
Sorry , don't know how to multiquote. but I want to address Purple's last point too. There may be more to this argument than dogma, it seems to make some economic sense.

1. The productive economy is generally private sector, but not exculsively so. ESB, Coilte etc are both public sector *and *wealth-generating.

2. Welfare is re-distributive But the underlying assets used by the private sector, whether they be human assets like education or roads, services  or raw materials etc are publically owned. So in a real sense, taxes used to pay welfare are simply paid to the population in general for resources that they own already. Thus the private sector is not making a free gratis contribution, simply paying those who own it. So it is wrong  to assume that wealth generators whoever they are, have an absolute right to their income. 

3. It's not my argument that increasing welfare or it alone increases economic activity, only that it is a valid part of a balanced mixed economy and contributes to the circulation of money which is part of (but not solely) a correctly functioning economy. 

4. There should be a premium for work vs benefit. Yet those who have had unearned advantages thro birth (wealthy parents etc) should not be overly advantaged by the state vs those who did not.


----------



## Rois

deleted


----------



## Complainer

THanks for your contribution Rois. Hope things are looking OK for you now.


----------



## Purple

horusd said:


> Sorry , don't know how to multiquote. but I want to address Purple's last point too. There may be more to this argument than dogma, it seems to make some economic sense.


 It makes sociall sense, but not economic sense.



horusd said:


> 1. The productive economy is generally private sector, but not exculsively so. ESB, Coilte etc are both public sector *and *wealth-generating.


 OK, but as they are wealth generating they do not need to be supported through taxation. By the way, the ESB is a really bad example.



horusd said:


> 2. Welfare is re-distributive But the underlying assets used by the private sector, whether they be human assets like education or roads, services  or raw materials etc are publically owned. So in a real sense, taxes used to pay welfare are simply paid to the population in general for resources that they own already. Thus the private sector is not making a free gratis contribution, simply paying those who own it. So it is wrong  to assume that wealth generators whoever they are, have an absolute right to their income.


 Suggesting that the sector of the economy that contributes most to the public finances is in some way indebted to those that pay least is a weak argument. I do agree that people do not have an absolute right to all of their income.



horusd said:


> 3. It's not my argument that increasing welfare or it alone increases economic activity, only that it is a valid part of a balanced mixed economy and contributes to the circulation of money which is part of (but not solely) a correctly functioning economy.


 It’s part of a correctly functioning society and will in my opinion, through social cohesion, offer a longer term economic gain. I don’t for a minute accept that it’s the economics equivalent of a perpetual motion machine. 



horusd said:


> 4. There should be a premium for work vs benefit. Yet those who have had unearned advantages thro birth (wealthy parents etc) should not be overly advantaged by the state vs those who did not.


 I agree 100% but we should invest in levelling the playing field before the game starts rather than during the match; i.e. invest far more in targeted education, in particular primary education (which is why I’m against universal free third level education).


----------



## Purple

Rois, I’m very sorry to hear about your troubles.
This discussion is about the economic impact of welfare payments and whether they are above a level which is financially viable for the state. The fact that you are getting welfare payments that are far higher than our EU competitors but still can’t make ends meet is a reflection on just how expensive this country has become over the last 10 years. It is in no way a reflection of you as a person. 

It seems from reading your post that your personal circumstances are more to do with our archaic bankruptcy laws than your income levels. You are incapable of paying your debts because you are bankrupt. If this was like most other developed countries your creditors would pick over the financial carcase and you’d be able to start again.


----------



## Firefly

Complainer said:


> Thanks for the primer, though I note your fairly selective quoting from those articles. Strange that you didn't choose to quote the "The problem is that despite mutterings from the Government, welfare payments are too low and support for children is certainly inadequate" bit.



That may be true, but as per my post 55 I'm saying in relation to welfare payments that "they keep people from going back into the work force" sic and that they do.


----------



## Firefly

Complainer said:


> There are many businesses that do very well from welfare spenders. There are some businesses in some parts of the cities that depend almost entirely on welfare spending, and would simply fold up without it.



C'mon! Which businesses "depend almost entirely on welfare spending" ?


----------



## Complainer

Firefly said:


> C'mon! Which businesses "depend almost entirely on welfare spending" ?


Businesses in particular parts of the large cities where most of the population is on welfare. Ask the shop owners in Darndale, Ballymun, parts of Tallaght, and parts of Sallynoggin.


----------



## Chris

Complainer said:


> I'd really love to see your economic analysis to back this up. There are many businesses that do very well from welfare spenders. There are some businesses in some parts of the cities that depend almost entirely on welfare spending, and would simply fold up without it.
> 
> The primary beneficiaries of welfare are of course the welfare recipients. But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend.



OK, let's break this down to the simplest possible explanation often referred to as a Crusoe example. Imagine an Island with an economy that has annual transactions worth €1000. Now a shipwrecked person arrives with no income or assets. In order to help him out 10% is taxed out of the economy and given to him to spend. His ability to spend €100 is completely dependent on the inability of the rest of the economy to spend that €100. The value of economic transactions has not increased meaning there is precisely zero gain to the economy.
Any company that does well from welfare spenders is doing so at the expense of the rest of the economy that is paying for it.



horusd said:


> Sunny there maybe a counter-argument to this. If a person is paid so much that it exceeds their ability to spend it and they save it instead (or indeed use it abroad), then this money is effectively removed from the real economy and becomes unproductive. If on the other hand the money is redistributed via the tax and welfare systesms all of it is spent because it must be spent by the recipient, then the it re-enters the active economy and contributes to economic activity which entails jobs, more taxes etc. In short, it keeps money circulating.



Wealthy people's money does not sit idle adding no benefit to the economy. Not spending, or saving, does not take money out of circulation. When someone saves money, that money is lent out to someone else, which means that saving is simply allowing someone else to do the spending. Alternatively the money that isn't spent is directly invested in businesses which increases employment. Saving and *not *spending is the life blood of a functioning economy.
And if money is moving abroad then that is an indication of less optimistic or bad economic climate. Appropriating more of that money only makes the problem worse not better.


----------



## Complainer

Chris said:


> OK, let's break this down to the simplest possible explanation often referred to as a Crusoe example. Imagine an Island with an economy that has annual transactions worth €1000. Now a shipwrecked person arrives with no income or assets. In order to help him out 10% is taxed out of the economy and given to him to spend. His ability to spend €100 is completely dependent on the inability of the rest of the economy to spend that €100. The value of economic transactions has not increased meaning there is precisely zero gain to the economy.
> Any company that does well from welfare spenders is doing so at the expense of the rest of the economy that is paying for it.


So should I take that as a 'No' then to my request for backup to your claim that "The businesses where welfare recipients spend their money would be at least as well off if they were not taxed as highly in order to pay for welfare"?


----------



## truthseeker

Complainer said:


> Businesses in particular parts of the large cities where most of the population is on welfare. Ask the shop owners in Darndale, Ballymun, parts of Tallaght, and parts of Sallynoggin.


 
But is that not just saying that businesses in certain areas depend on certains peoples income - regardless of how they get that income? If these people had jobs would they not still patronise the same businesses?


----------



## Complainer

truthseeker said:


> But is that not just saying that businesses in certain areas depend on certains peoples income - regardless of how they get that income? If these people had jobs would they not still patronise the same businesses?


Yes, that's true. But the issue is, as a matter of fact, that those particular businesses benefit substantially from spending by welfare recipients.


----------



## Firefly

Complainer said:


> Businesses in particular parts of the large cities where most of the population is on welfare. Ask the shop owners in Darndale, Ballymun, parts of Tallaght, and parts of Sallynoggin.



Nice to see you having the interests of some private businesses at heart. I agree that these businesses would be affected though, but that's business...plenty businesses dependant on people earning good incomes have closed down.


----------



## Purple

Complainer said:


> Yes, that's true. But the issue is, as a matter of fact, that those particular businesses benefit substantially from spending by welfare recipients.



So if the money was not taken from someone else in taxes it would be spent elsewhere in the economy so there is no net gain to the economy.


----------



## Firefly

Purple said:


> I agree 100% but we should invest in levelling the playing field before the game starts rather than during the match; i.e. invest far more in targeted education, in particular primary education (which is why I’m against universal free third level education).



How about introducing compulsory parenting classes for all parents? I remember a teacher showing us a break-even graph of average salaries for graduates vs non-graduates when we were in secondary school. Basically, those who didn't go to college earned a lot more than those who went to college in the college years but were over-taken shortly afterward.... at the time I felt that this information was useflu, but I was already going to uni anyway...it would have been better to have been given this info a lot earlier.  Perhaps if the parents were better informed - perhaps a yearly refresher, then they could make more informed choices about how to raise their children?


----------



## Chris

Complainer said:


> So should I take that as a 'No' then to my request for backup to your claim that "The businesses where welfare recipients spend their money would be at least as well off if they were not taxed as highly in order to pay for welfare"?



You really don't get it do you!?!? What you are suggesting, without evidence, is that there are businesses that would not exist if it wasn't for welfare recipients. If it were that simple to create business activity then there would be no economic problems *ever*, all we would have to do is ramp up welfare payments to everybody. 
Let me repeat a simple economic fact: you cannot provide money to one part of the economy without it being at a cost top another part and the top it off by claiming that this is beneficial to the economy. There is no net gain in such an action no matter how hard you try and fabricate one.


----------



## Purple

Chris said:


> You really don't get it do you!?!? What you are suggesting, without evidence, is that there are businesses that would not exist if it wasn't for welfare recipients. If it were that simple to create business activity then there would be no economic problems *ever*, all we would have to do is ramp up welfare payments to everybody.
> Let me repeat a simple economic fact: you cannot provide money to one part of the economy without it being at a cost top another part and the top it off by claiming that this is beneficial to the economy. There is no net gain in such an action no matter how hard you try and fabricate one.



Frustrating, isn't it?


----------



## Firefly

Chris said:


> You really don't get it do you!?!? What you are suggesting, without evidence, is that there are businesses that would not exist if it wasn't for welfare recipients. If it were that simple to create business activity then there would be no economic problems *ever*, all we would have to do is ramp up welfare payments to everybody.



As I mentioned on another thread we just need to find that money-doesn't-grow-on-trees tree and we'll be elected.


----------



## Complainer

Point a


Chris said:


> What you are suggesting, without evidence, is that there are businesses that would not exist if it wasn't for welfare recipients.


Point b


Chris said:


> If it were that simple to create business activity then there would be no economic problems *ever*, all we would have to do is ramp up welfare payments to everybody.



That's a great big leap that you've made from point a) to point b). There are indeed certain types of businesses in certain locations that are heavily dependant on welfare payments to their customers to keep them alive.

Please go back and read what I've actually said on this thread. I've never made that big leap to point b.


----------



## Purple

OK, it seems that Complainer accepts that there is no net economic gain from social welfare spending. He is now concentrating on the point that some businesses benefit from welfare payments. I think we can all agree on that but it’s a side issue and meaningless in the overall economic context. 

He has successfully steered the discussion down a side road; it needs to be steered out again


----------



## Latrade

Purple said:


> He is now concentrating on the point that some businesses benefit from welfare payments.


 
Actually it's a valid point, there are businesses that wouldn't exist if it weren't for welfare payments, as a group it's called "the black market".


----------



## Chris

Complainer said:


> There are indeed certain types of businesses in certain locations that are heavily dependant on welfare payments to their customers to keep them alive.
> 
> Please go back and read what I've actually said on this thread. I've never made that big leap to point b.



I don't have to go back, as your statements are still completely and utterly wrong. You are saying that there is economic benefit from providing welfare to people who then go and spend it. Point b is a simple conclusion drawn from your statement that there is economic benefit in taking from one part of the economy in order to give to another part, i.e. welfare payments, which is what you claim in this statement: "Benefits paid from taxes to certain individuals go way beyond those individuals. An awful lot of this money goes into retail, paying for goods and staff. Some of it comes back in tax, particularly VAT and customs duties."

Fact is that if other customers were taxed less there would be more money to spend at the same businesses; the very businesses that have customers on welfare would also be better off if they were not taxed as much to contribute to the welfare program; if other companies were taxed less they would reinvest more providing more jobs for people on welfare to apply for.

What you are doing is simply looking at the one transaction of welfare spender to a business, while completely ignoring all the damage that is done by financing the welfare payment in the first place. Bastiat refers to this as the seen and the unseen, you would do yourself an immense favour by reading some of his works.


----------



## Complainer

Chris said:


> You are saying that there is economic benefit from providing welfare to people who then go and spend it.


Where did I say this?


----------



## Complainer

Chris said:


> You are saying that there is economic benefit from providing welfare to people who then go and spend it.


Where did I say this?



Chris said:


> Fact is that if other customers were taxed less there would be more money to spend at the same businesses; the very businesses that have customers on welfare would also be better off if they were not taxed as much to contribute to the welfare program; if other companies were taxed less they would reinvest more providing more jobs for people on welfare to apply for.


HOw do you conclude that the money would be spent and/or reinvested if not taxed? How much of it would go offshore? How much of it would go into non-productive assets like property? How much of it would be saved?


----------



## Chris

Complainer said:


> Where did I say this?



Did you actually read the post? I quoted one of your earlier posts.



Complainer said:


> HOw do you conclude that the money would be spent and/or reinvested if not taxed? How much of it would go offshore? How much of it would go into non-productive assets like property? How much of it would be saved?



With posts like this you are only exposing more of your economic ignorance and ineptitude.
Unless money is kept under the mattress it is in some way used in the economy. Money in savings accounts is used to make loans, which means someone else does the spending either on production/capital goods or consumer goods. The other option is money being directly invested in businesses allowing them to expand.
Property as a non-productive asset, now I really have heard it all. How do you think businesses would be able to operate or expand without existing or new/improving real estate assets? Real estate is one of the most important capital goods to an economy.
If money is leaving the country then it is because of bad economic prospects. Taxing more money out of the economy, in order to "keep it here", only perpetuates that problem and the view of investors who are moving money out of the country.


----------



## Firefly

Complainer said:


> HOw do you conclude that the money would be spent and/or reinvested if not taxed? How much of it would go offshore? How much of it would go into non-productive assets like property? How much of it would be saved?



It's going off-shore already...tax it less and it would probably stay here. The recent property bubble aside, investing in property is not non-productive...it is providing a service to those not able/willing to buy their own property. Money saved is a good thing...it enables banks to lend for productive reasons.


----------



## Complainer

Chris said:


> Did you actually read the post? I quoted one of your earlier posts.


Indeed, I read it quite carefully, which is why I suggested that you go back and read my posts. I did not say what you claim that I said. 



Chris said:


> With posts like this you are only exposing more of your economic ignorance and ineptitude.
> Unless money is kept under the mattress it is in some way used in the economy. Money in savings accounts is used to make loans, which means someone else does the spending either on production/capital goods or consumer goods. The other option is money being directly invested in businesses allowing them to expand.
> Property as a non-productive asset, now I really have heard it all. How do you think businesses would be able to operate or expand without existing or new/improving real estate assets? Real estate is one of the most important capital goods to an economy.
> If money is leaving the country then it is because of bad economic prospects. Taxing more money out of the economy, in order to "keep it here", only perpetuates that problem and the view of investors who are moving money out of the country.



You might want to read up on the AAM guidelines on personal attacks. On the substantive issue, perhaps you haven't read the papers in the last two years. Perhaps you mightn't be aware that businesses are having huge difficulties getting banks to lend. Perhaps you might not be aware of banks having to build up the capital to meet more stringent requirements. Perhaps you might not have heard of our property bubble?


----------



## Sunny

This thread reached the end a long time ago.....


----------



## Firefly

I beg to differ. The current debate isn't a million miles away from the thread's title.


----------



## orka

Chris said:


> You are saying that there is economic benefit from providing welfare to people who then go and spend it.





Complainer said:


> Where did I say this?


Here? 





Complainer said:


> The primary beneficiaries of welfare are of course the welfare recipients. But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend.


 
I think your posts weren’t clear in what they were or weren’t saying so it’s not surprising that Chris, Firefly, Purple, me and probably most other readers read them as what they appeared to say and not what you intended to say. The following also helped posters form their views on what you were trying to say:





Complainer said:


> Spending from benefits has knock-on economic effects.





Complainer said:


> Benefits paid from taxes to certain individuals go way beyond those individuals. An awful lot of this money goes into retail, paying for goods and staff. Some of it comes back in tax, particularly VAT and customs duties.





Complainer said:


> Those businesses that benefit from welfare spending get particular benefits from that spend. Employees in those retail benefits get particular benefits from that spend.





Complainer said:


> Gents, perhaps you'd like to go back and look at the issue that I'm actually argueing (sic) here. Firefly said _“Benefits paid from taxes to certain individuals only benefit the receivers”. _I pointed out that, as a matter of fact, this is not true. The retail businesses where benefit recipients spend their money also benefit. That is a simple fact.





Complainer said:


> Yes, that's true. But the issue is, as a matter of fact, that those particular businesses benefit substantially from spending by welfare recipients.


I think we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax. But as a whole, spending in ALL shops/services is the same so there is no economic benefit in providing benefits. Perhaps you could clearly articulate if you think welfare provides economic benefits rather than inviting other posters to explain why/where/how they had reached a conclusion about your opinion on the matter. Then we could go back to the original topic. TVM.


----------



## Complainer

orka said:


> I think your posts weren’t clear in what they were or weren’t saying so it’s not surprising that Chris, Firefly, Purple, me and probably most other readers read them as what they appeared to say and not what you intended to say.


My posts were 100% clear on what they said. They did not constitute a complete cost/benefit analysis of our social welfare system, but I don't think that is the usual standard of evidence. They simply pointed out the downstream benefits of welfare spending - no more and no less. 

It is indeed no surprise that the 'usual suspects' read them as what they expected me to be saying, rather than what I actually did say.



orka said:


> I think we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax.


So how come that when you say this, you aren't trampled in a rush by the usual suspects seeking to disagree with you on points that you haven't actually made. Why does it take you to say this for us all to agree with it.



orka said:


> Perhaps you could clearly articulate if you think welfare provides economic benefits rather than inviting other posters to explain why/where/how they had reached a conclusion about your opinion on the matter.


No, I won't. I'm not going to feel obliged to write essays covering every possible matter related to every possible posts because the usual suspects want to argue every point, including the points that I don't make.



orka said:


> TVM.


The Virgin Mary?


----------



## orka

Complainer said:


> So how come that when you say this, you aren't trampled in a rush by the usual suspects seeking to disagree with you on points that you haven't actually made. Why does it take you to say this for us all to agree with it.


I have TVM in my corner...


Complainer said:


> No, I won't. I'm not going to feel obliged to write essays...


Ah g'wan, a yes/no will suffice.


----------



## Purple

OK, we're all in agreement then; welfare payments offer no economic value add to the economy as a whole and are, at best, neutral.


----------



## Firefly

Purple said:


> OK, we're all in agreement then; welfare payments offer no economic value add to the economy as a whole and are, at best, neutral.



At very best. Poverty traps exist and they are as the title of this thread suggests "...discouraging people from taking up jobs". The social welfare rates will have to fall to encourage people to take up jobs. Of course this will be extremely tough for certain people but the alternative is that we have empty low paid jobs and people sitting at home - a double whammy to the tax payers of this country, of which Complainer is one....wouldn't you like to see you tax being spend on better things like special needs assistants?


----------



## Chris

Complainer said:


> Indeed, I read it quite carefully, which is why I suggested that you go back and read my posts. I did not say what you claim that I said.


Orka has already pointed out where you make claim to benefits of welfare spending and "knock-on economic effects". But be my guest and deny reality.



Complainer said:


> You might want to read up on the AAM guidelines on personal attacks. On the substantive issue, perhaps you haven't read the papers in the last two years. Perhaps you mightn't be aware that businesses are having huge difficulties getting banks to lend. Perhaps you might not be aware of banks having to build up the capital to meet more stringent requirements. Perhaps you might not have heard of our property bubble?


I made absolutely no personal attack, I have only pointed out fallacies in your posts and serious gaps in your economic knowledge.
How do you think those businesses would get more money if savings were decreased through higher taxation? Decreased savings means less loanable funds, which means more difficulties for businesses. Are you saying that the credit market will be in a better position if the banks didn't have to improve their capital requirements and faced failure? Please clarify this.
And what has the property bubble got to do with this thread or any of the arguments I have made? 



orka said:


> I think we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax.



Not quite, benefits benefit the recipient. There is no reason to suggest that welfare recipients would suddenly go and do their shopping elsewhere as soon as they have a job. 



orka said:


> But as a whole, spending in ALL shops/services is the same so there is no economic benefit in providing benefits.


Yes, there is absolutely no economic benefit in the welfare system.


----------



## Complainer

Firefly said:


> Poverty traps exist and they are as the title of this thread suggests "...discouraging people from taking up jobs".


The title of this thread does not suggest that poverty traps are discouraging people from taking up jobs. The level of social welfare is not, in itself, a poverty trap. The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage.



Firefly said:


> Of course this will be extremely tough for certain people but the alternative is that we have empty low paid jobs and people sitting at home - a double whammy to the tax payers of this country, of which Complainer is one....wouldn't you like to see you tax being spend on better things like special needs assistants?


Strange how it is OK to bring in policy that will be 'extremely tough for certain people' but if there is any mention of increased taxation or reduced tax breaks, the lambs start bleating about how tough life is for landlords or employers. So in summary, it is OK to bring in policies that are 'extremely tough' on those who are most in need, but not tough on those who are least in need -right?

The choice is not between decent levels of social welfare and SNAs.



Chris said:


> Orka has already pointed out where you make claim to benefits of welfare spending and "knock-on economic effects". But be my guest and deny reality.


Orka pointed out that "we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax.". This is what I've been saying ad nauseum on this thread - no more, and no less. You have spent several days trying to argue with me on some broader point about the welfare system on which I have made no comment - good, bad or indifferent. Why do you choose to argue with me, and not Orka, when we both say the same thing?



Chris said:


> I made absolutely no personal attack, I have only pointed out fallacies in your posts and serious gaps in your economic knowledge.


You accused me of 'economic ineptitude and ignorance. That is a personal attack. You played the man, not the ball.



Chris said:


> How do you think those businesses would get more money if savings were decreased through higher taxation? Decreased savings means less loanable funds, which means more difficulties for businesses. Are you saying that the credit market will be in a better position if the banks didn't have to improve their capital requirements and faced failure? Please clarify this.
> And what has the property bubble got to do with this thread or any of the arguments I have made?


I simply pointed the flaws in your blanket assumption that untaxed money suddently becomes productive in our economy. It doesn't, or certainly some if it doesn't. Some of it goes overseas. Some of it will be absorbed into the black hole of our banking system. 

You seem to be very quick to make blanket assumptions about what happens to untaxed money, and very slow to recognise the reality (as Orka & others have recognised) that welfare spend has benefits for people other than the welfare recipient.


----------



## Firefly

Complainer said:


> The title of this thread does not suggest that poverty traps are discouraging people from taking up jobs. The level of social welfare is not, in itself, a poverty trap. The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage.



From the Irish Times letter in question
"....offered the job to two people, both of whom had been out of work for  more than two years.  Both said they would take the job but then turned  it down saying they were *better off on social welfare with rent  allowance etc.* - even taking account of the back to work allowance."

Looks like a poverty trap to me...but even if it doesn't meet your strict definition, the effect is the same...discouraging people from going back to work.



Complainer said:


> Strange how it is OK to bring in policy that will be 'extremely tough for certain people' but if there is any mention of increased taxation or reduced tax breaks, the lambs start bleating about how tough life is for landlords or employers. So in summary, it is OK to bring in policies that are 'extremely tough' on those who are most in need, but not tough on those who are least in need -right?



Don't think anyone was bleating. The point was made that not many people engaging in the property letting business are making money so the potential gain from extra taxation is debatable. By all means show us a link to this gold mine - if it's there then I think it should be looked at.



Complainer said:


> The choice is not between decent levels of social welfare and SNAs.



not directly, but indirectly. As we still haven't found that money-doesn't-grow-on-trees tree there is a finite amount of money that the governent can spend as it sees fit.


----------



## cork

Complainer said:


> The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage.



The most striking thing is that work or training is not encouraged.

Government see trianing allowances as an expense but see social welfare payments as ok.

I know cases where traing courses cut and training centres being idle.


----------



## Purple

Complainer said:


> The title of this thread does not suggest that poverty traps are discouraging people from taking up jobs. The level of social welfare is not, in itself, a poverty trap. The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage.


 Do you think that these services should be left in place and if so at what income level do you think they should be removed at? Can you then tell the class how this will be paid for (and please don’t bring in any wishful thinking about “closing tax breaks for the rich”).




Complainer said:


> Strange how it is OK to bring in policy that will be 'extremely tough for certain people' but if there is any mention of increased taxation or reduced tax breaks, the lambs start bleating about how tough life is for landlords or employers. So in summary, it is OK to bring in policies that are 'extremely tough' on those who are most in need, but not tough on those who are least in need -right?


 There he goes again with the tax breaks.



Complainer said:


> The choice is not between decent levels of social welfare and SNAs.


 I agree, the choice was between yet another pay rise for teachers and SNA’s and the teachers took the money and said screw the kids.




Complainer said:


> Orka pointed out that "we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax.". This is what I've been saying ad nauseum on this thread - no more, and no less. You have spent several days trying to argue with me on some broader point about the welfare system on which I have made no comment - good, bad or indifferent. Why do you choose to argue with me, and not Orka, when we both say the same thing?


 OK, so he now accepts that there is no general net economic benefit from welfare payments.
Who wants to spend a week getting him to admit that there is actually a net economic negative impact (though in my opinion that is outweighed by the positive social benefit). 




Complainer said:


> You accused me of 'economic ineptitude and ignorance. That is a personal attack. You played the man, not the ball.


No, that was a statement of fact.




Complainer said:


> I simply pointed the flaws in your blanket assumption that untaxed money suddently becomes productive in our economy. It doesn't, or certainly some if it doesn't. Some of it goes overseas. Some of it will be absorbed into the black hole of our banking system.


 Thin, very thin.



Complainer said:


> You seem to be very quick to make blanket assumptions about what happens to untaxed money, and very slow to recognise the reality (as Orka & others have recognised) that welfare spend has benefits for people other than the welfare recipient.


 Who wants to spend a week getting him to admit that the collection of taxes to spend on welfare has a negative economic impact?


----------



## Chris

Complainer said:


> Orka pointed out that "we can all agree that benefits benefit the PARTICULAR shops/services where they are spent as it’s unlikely that the recipients spent in the exact same shops/services that the money would have been spent in if it had stayed in someone else’s pocket and not been extracted as tax.". This is what I've been saying ad nauseum on this thread - no more, and no less. You have spent several days trying to argue with me on some broader point about the welfare system on which I have made no comment - good, bad or indifferent.


Orka made a post where a summary was made of your posts. The most telling ones are:
1) "The primary beneficiaries of welfare are of course the welfare recipients. But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend."
2) "Spending from benefits has knock-on economic effects."
This strongly suggests that there is a benefit to the economy from the welfare system.

Anyway, maybe we are getting somewhere here. Could you tell us whether you acknowledge the fact that a welfare system does not provide a net benefit to the economy?



Complainer said:


> Why do you choose to argue with me, and not Orka, when we both say the same thing?


I made a statement on Orka's post here: http://www.askaboutmoney.com/showpost.php?p=1151066&postcount=117



Complainer said:


> You accused me of 'economic ineptitude and ignorance. That is a personal attack. You played the man, not the ball.


It is not a personal attack, but simply the truth. Anybody can correctly say that I am ignorant and inept in all matters synchronised swimming; that would not be a personal attack but simply the truth. And just to make sure I am not misunderstood, I used ignorant and inept in the true meaning of the words, i.e. ignorance meaning lack of knowledge or training and inept meaning the lack of skill or aptitude. Absolutely nothing personal in my comment.



Complainer said:


> I simply pointed the flaws in your blanket assumption that untaxed money suddently becomes productive in our economy. It doesn't, or certainly some if it doesn't. Some of it goes overseas. Some of it will be absorbed into the black hole of our banking system.


There is no flaw in the assessment that money that is not taxed is somehow used in the economy. But again we are getting somewhere here as you have dropped the non-productive property investment and savings are bad idea. As I mentioned before, money leaving the country is an indication of a bad investment environment and increased taxation only perpetuates that problem. If taxation on saving and investment were reduced then more money would be saved and invested which is the basis of economic growth.
Our banking system being a black hole is something we can agree on, but if said banks did not get savings from people they would be making even less loans than they are now.



Complainer said:


> You seem to be very quick to make blanket assumptions about what happens to untaxed money, and very slow to recognise the reality (as Orka & others have recognised) that welfare spend has benefits for people other than the welfare recipient.


OK, let me give you this much. *If*, and this is a big if, there are businesses that *only* exist because *only* welfare recipients frequent them, then those businesses also benefit. However, in order to ensure that those businesses stay in businesses an increase in welfare recipients would have to be deemed a good thing, which of course it is not. But these businesses would then also only exist at the expense of the rest of the productive economy.
Closer to the truth is that there are businesses that have some customers who are on welfare, but if those people were not in receipt of welfare payments then all other customers would have more money to spend, the businesses would have less of a tax burden, as would other businesses, which would allow businesses to expand and provide employment.



Purple said:


> Who wants to spend a week getting him to admit that the collection of taxes to spend on welfare has a negative economic impact?



Maybe another week and a separate thread. At first I thought you were exaggerating about being ignored by Complainer, but I it truly is amazing.


----------



## Purple

Chris said:


> Maybe another week and a separate thread. At first I thought you were exaggerating about being ignored by Complainer, but I it truly is amazing.


Careful now or you'll be blacklisted as well.


----------



## Complainer

Chris said:


> Orka made a post where a summary was made of your posts. The most telling ones are:
> 1) "The primary beneficiaries of welfare are of course the welfare recipients. But unless they are sticking it all under the mattress, there will be, as a matter of fact, downstream economic benefits from that spend."
> 2) "Spending from benefits has knock-on economic effects."
> This strongly suggests that there is a benefit to the economy from the welfare system.


There you go again with that big leap. I made no suggestion, strong or otherwise, that there is a benefit to the economy from the welfare system. I simply pointed out that there is a benefit to those businesses where welfare recipients spend their welfare. I made no statement or suggestion that the welfare system was good, bad or indifferent for the economy. You've spent a week arguing with me over a point I didn't make, and now you're trying to gloss over your error by talking about 'strong suggestions'. I made no suggestions.



Chris said:


> Could you tell us whether you acknowledge the fact that a welfare system does not provide a net benefit to the economy?


As I've already stated above, No. I won't feel obliged to comment on AAM to suit the agenda of the usual suspects. Like every other user on AAM, I will post where/when I see fit, and I won't answer to you or anyone else for it. If you want to bring in some posting guideline that every post has to be accompanied by a complete analysis of all related areas, then go have a chat with Brendan. In the absence of such a guideline, the answer remains No.



Chris said:


> I made a statement on Orka's post here: http://www.askaboutmoney.com/showpost.php?p=1151066&postcount=117


You response to Orka who made exactly the same point as I did is remarkably different to your repeated and ongoing response to me. Now why would that be, I wonder.



Chris said:


> It is not a personal attack, but simply the truth. Anybody can correctly say that I am ignorant and inept in all matters synchronised swimming; that would not be a personal attack but simply the truth. And just to make sure I am not misunderstood, I used ignorant and inept in the true meaning of the words, i.e. ignorance meaning lack of knowledge or training and inept meaning the lack of skill or aptitude. Absolutely nothing personal in my comment.


Your comment was about me, not about my post. It was personal and it was an attack. It was a personal attack.



Chris said:


> There is no flaw in the assessment that money that is not taxed is somehow used in the economy. But again we are getting somewhere here as you have dropped the non-productive property investment and savings are bad idea. As I mentioned before, money leaving the country is an indication of a bad investment environment and increased taxation only perpetuates that problem. If taxation on saving and investment were reduced then more money would be saved and invested which is the basis of economic growth.
> Our banking system being a black hole is something we can agree on, but if said banks did not get savings from people they would be making even less loans than they are now.


Your ability to ignore the facts that don't suit you is stunning. You ignore the issue of money going overseas because, in your opinion, is an indication of a bad investment environment. It really doesn't matter wny money is going overseas. The fact is that some money goes overseas. The fact remains that high earners are far more likely to send money overseas, whether through international share investments, or unit linked funds with regional spreads, or foreign property or just plain old-fashioned foreign holidays than welfare recipients. But this doesn't suit your argument, so you pretend it doesn't happen.


Chris said:


> OK, let me give you this much. *If*, and this is a big if, there are businesses that *only* exist because *only* welfare recipients frequent them, then those businesses also benefit. However, in order to ensure that those businesses stay in businesses an increase in welfare recipients would have to be deemed a good thing, which of course it is not.


Many more big leaps here. Why would apply to businesses that *only* welfare recipients frequent? Why not those businesses that *mostly* welfare recipients frequent, and those businesses that *some* welfare recipients frequent? Those businesses also benefit, though obviously to lesser degrees. And why  to “ensure that those businesses stay in businesses an increase in welfare recipients would have to be deemed a good thing”? Why is an increase required? Why won’t those businesses continue to survive with welfare at the same level it is now? This is your usual ‘big leap’ tactic of coming up with exaggerated positions that bear no relation to the other posters point, and then arguing against them. 
Should I take some solace from the fact that you have finally admitted that some businesses do benefit from welfare spending?


Chris said:


> Closer to the truth is that there are businesses that have some customers who are on welfare, but if those people were not in receipt of welfare payments then all other customers would have more money to spend, the businesses would have less of a tax burden, as would other businesses, which would allow businesses to expand and provide employment.


And again, you continue to ignore the facts (as accepted by other posters) that don’t suit your argument. You continue to assume that all money if untaxed would be spent or invested productively and locally, which of course, is nonsense again.


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## Chris

Complainer said:


> There you go again with that big leap. I made no suggestion, strong or otherwise, that there is a benefit to the economy from the welfare system. I simply pointed out that there is a benefit to those businesses where welfare recipients spend their welfare. I made no statement or suggestion that the welfare system was good, bad or indifferent for the economy. You've spent a week arguing with me over a point I didn't make, and now you're trying to gloss over your error by talking about 'strong suggestions'. I made no suggestions.


But you are still ignoring the fact that any benefit comes at a cost to someone including the businesses that has welfare recipients as customers. You are only looking at one side of the transaction.



Complainer said:


> As I've already stated above, No. I won't feel obliged to comment on AAM to suit the agenda of the usual suspects. Like every other user on AAM, I will post where/when I see fit, and I won't answer to you or anyone else for it. If you want to bring in some posting guideline that every post has to be accompanied by a complete analysis of all related areas, then go have a chat with Brendan. In the absence of such a guideline, the answer remains No.


In the above quote you claim that I made an error about your posts and now you are unwilling to verify whether I actually made an error or not! I had a discussion with a Labour candidate during the election and even he admitted that there was no net gain to an economy from a welfare system and our discussion moved on to what gains and losses there were at a social and societal level. Is it really that difficult for you to clarify the issue at hand?



Complainer said:


> You response to Orka who made exactly the same point as I did is remarkably different to your repeated and ongoing response to me. Now why would that be, I wonder.


Orka has not repeatedly made economically fallacious statements which you are doing.



Complainer said:


> Your comment was about me, not about my post. It was personal and it was an attack. It was a personal attack.


My comment was about your understanding of economics portrayed in your posts. I do not know you so I couldn't possible make a personal judgment about you.



Complainer said:


> Your ability to ignore the facts that don't suit you is stunning. You ignore the issue of money going overseas because, in your opinion, is an indication of a bad investment environment. It really doesn't matter wny money is going overseas. The fact is that some money goes overseas. The fact remains that high earners are far more likely to send money overseas, whether through international share investments, or unit linked funds with regional spreads, or foreign property or just plain old-fashioned foreign holidays than welfare recipients. But this doesn't suit your argument, so you pretend it doesn't happen.


At no stage have I ignored any facts; I have confronted the situation of money leaving the country on two occasions. But here it is again, if greedy rich capitalists and entrepreneurs are investing or spending abroad then it is because they see more profit to be had there. This is a hugely important fact that you choose to completely discount. Fact is that those people with money to invest will invest it where they are able to achieve the highest possible return. Fact is that that place is currently not Ireland, and that additional taxation, in order to keep the money here, would only result in more money invested abroad.



Complainer said:


> Many more big leaps here. Why would apply to businesses that *only* welfare recipients frequent? Why not those businesses that *mostly* welfare recipients frequent, and those businesses that *some* welfare recipients frequent? Those businesses also benefit, though obviously to lesser degrees.


Because the more customers, other than welfare recipients, a company has, the more those customers would have to spend if they didn't have to finance welfare. I have repeatedly stated that you are making the fundamental economic flaw of *only* looking at what is seen, i.e. the money spent by welfare recipients in certain businesses, and ignore the damage done to the very same businesses and their other customers through financing the welfare system.



Complainer said:


> And why  to “ensure that those businesses stay in businesses an increase in welfare recipients would have to be deemed a good thing”? Why is an increase required? Why won’t those businesses continue to survive with welfare at the same level it is now? This is your usual ‘big leap’ tactic of coming up with exaggerated positions that bear no relation to the other posters point, and then arguing against them.
> Should I take some solace from the fact that you have finally admitted that some businesses do benefit from welfare spending?


What I mean by this is that a business environment highly or solely dependent on welfare customers would benefit from an increase in welfare recipients and would suffer if the number of welfare recipients declined due to increased employment. But of course it is the latter situation that we want, whether it renders certain businesses obsolete or not.
You can take solace in the fact that I stated that some businesses may have a net benefit from welfare spending only at the expense of their other customers and other businesses and taxpayers suffering.



Complainer said:


> And again, you continue to ignore the facts (as accepted by other posters) that don’t suit your argument. You continue to assume that all money if untaxed would be spent or invested productively and locally, which of course, is nonsense again.


What facts am I ignoring here. The comment you are referring to is basic text book economics. Fact is that the more money that is left in the productive economy, the more that part of the economy can grow.
Maybe you could argue against your perceived flaw in my comment rather than coming up with an arbitrary statement that I am ignoring some illusory facts.


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## Complainer

Chris said:


> But you are still ignoring the fact that any benefit comes at a cost to someone including the businesses that has welfare recipients as customers. You are only looking at one side of the transaction.


Woohoo - it has taken exactly a week for you to realise that in fact, you've no argument with what I said. You may have an argument with what I haven't said, but there is nothing that I've said here that you can argue with. Now why did it take you a week to work that out?



Chris said:


> In the above quote you claim that I made an error about your posts and now you are unwilling to verify whether I actually made an error or not! I had a discussion with a Labour candidate during the election and even he admitted that there was no net gain to an economy from a welfare system and our discussion moved on to what gains and losses there were at a social and societal level. Is it really that difficult for you to clarify the issue at hand?


It is nothing to do with how difficult it is or isn't. It is to do with me (like every other AAM user) choosing to post as suits me, not to post as suits you.



Chris said:


> Orka has not repeatedly made economically fallacious statements which you are doing.


Orka made exactly the same point that I did - that some businesses benefit from spending by welfare recipients.



Chris said:


> My comment was about your understanding of economics portrayed in your posts. I do not know you so I couldn't possible make a personal judgment about you.


Your comment was about me, not about my posts. It was personal, and it was an attack. It was a personal attack.



Chris said:


> At no stage have I ignored any facts; I have confronted the situation of money leaving the country on two occasions. But here it is again, if greedy rich capitalists and entrepreneurs are investing or spending abroad then it is because they see more profit to be had there. This is a hugely important fact that you choose to completely discount. Fact is that those people with money to invest will invest it where they are able to achieve the highest possible return. Fact is that that place is currently not Ireland, and that additional taxation, in order to keep the money here, would only result in more money invested abroad.


And there you go again with the diversionary opinions about the reasons why money might or might not get invested offshore. You keep repeating that untaxed money gets spent in the economy, which means you are ignoring the fact that some money gets invested abroad.


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## Protocol

If you charge one person 100 in tax and transfer 100 to another family, it appears that economic activity is unaffected.

The next stage is to say that the richer individual was saving that 100, i.e. they have a lower Marginal Propensity to Consume (MPC) out of extra income.  Whereas the poorer family may have an MPC of 0.90 or even 1.00.

So consumption might change by (-20) + (90) = +70

So, yes, consumer spending may rise due to increasing transfer benefit payments.

This is an argument that is often made by SF, Labour, socialists, etc.


However, as pointed out, the 100 that was being saved and turned into investment, is no longer being saved.

So investment spending may fall.


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## Firefly

Complainer said:


> The title of this thread does not suggest that poverty traps are discouraging people from taking up jobs. The level of social welfare is not, in itself, a poverty trap. The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage.




I have argued that a poverty trap is in existence and is "discouraging people from going back to work" as per the title of this thread. 

Rather than focusing on the impact of this you chose to dispute the Proverty Trap definition by saying

"The level of social welfare is not, in itself, a poverty trap. The poverty traps occur when a whole raft of services (e.g. medical card, school transport) are suddenly removed when a person starts earning a low wage."

I responded with the letter in question from the Irish Times "....offered the job to two people, both of whom had been out of work for more than two years. Both said they would take the job but then turned it down saying they were better off on social welfare *with rent allowance etc*. - even taking account of the back to work allowance."

and by saying 

"Looks like a poverty trap to me...but even if it doesn't meet your strict definition, the effect is the same...discouraging people from going back to work."

Can I take it that you agree that a Poverty Trap is in play here and/or that the removal of benefits are discouraging people from going back to work?


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## Brendan Burgess

Thats all folks.


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