Excellent lecture on 23rd January "Understanding income inequality in Ireland"

Brendan Burgess

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The Statistical & Social Inquiry Society of Ireland [ssisi.ie]

invites you to attend the 2019/2020 Barrington Lecture on the following topic:

"Understanding income inequality in Ireland"

By: Barra Roantree (Economic & Social Research Institute & Trinity College Dublin)

to be delivered on: Thursday 23rd January 2020 at 5.30pm

at the: Royal Irish Academy, Dawson Street.



Abstract: This paper examines how household income is distributed in Ireland today, how that compares to the past and to our neighbours in Europe. It finds that strong and balanced growth over the past 30 years – averaging around 4.5% annually – has acted to reduce disposable income inequality on most measures. However, market income inequality has risen at the top and now stands among the highest in Europe. The paper investigates the reasons for such high levels of market income inequality and considers the implications for policy, in particular for the design of our tax and benefit system.

Non-members are welcome to attend and participate in the discussion.




I heard Barra giving a presentation before and he was excellent. He worked for the Institute of Fiscal Studies in the UK. The presentation I heard was at the Nevin Institute and he spoke about measures of life-long inequality. In other words, if you look at the distributions of income today, there is a fair bit of inequality. But when you adjust it for a person's lifetime it is a lot less so. Students have no income, but when they work, their incomes go above average, and then probably drop below average in retirement.

Brendan
 

odyssey06

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That reminds of something I read by Thomas Sowelll in relation to the situation in America:
Much has been written, for example, about how small percentages of the population receive large percentages of the nation's income, or hold some large percentage of the nation's wealth. The implicit assumption is that we are talking about classes of people when, in the US at least, we are in fact often talking about individuals at different stages of their lives.... The vast majority of the wealth of Americans is concentrated in the hands of people over 50 years of age.

Studies which have followed individual Americans over a period of years found that most do not stay in the same quintile of the income distribution for as long as a decade... More who began in the bottom 20% had reached the top 20% by the end of the decade than remained where they were. Yet the 'poor' continue to be identified as the bottom 20%, instead of the 3% who remain at the bottom.
 

NoRegretsCoyote

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Much has been written, for example, about how small percentages of the population receive large percentages of the nation's income, or hold some large percentage of the nation's wealth. The implicit assumption is that we are talking about classes of people when, in the US at least, we are in fact often talking about individuals at different stages of their lives.... The vast majority of the wealth of Americans is concentrated in the hands of people over 50 years of age.
It's astonishing how few people "get" this.

The CSO published work on wealth inequality in Ireland and the most remarkable thing about it was how so much is in the hands of the old, and very old.
 

odyssey06

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People may not click through to the paper so I've just pulled out the headings from their main slides as a summary as I think they are key points:
  • The tax & benefit system does less to reduce inequality between people as more of what it does is intrapersonal redistribution
  • Even the lifetime poor spend majority of lives in work
  • Increases to in-work benefits most effective way of redistributing to poor
  • Increases in higher-rate of income tax for redistributing from rich driven by strong persistence earnings at the top
 

PMU

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It woudl eb very easy to dismiss this as typical NERI rubbish! Of course it totally ignores the best way of improving the lot of the less well off, i.e. the competitive capitalist system. It's not more efficient distribution we require but more capitalism. And real disruptive capitalism, not the crony stuff we get in Ireland. For example, up to the 1990s a mid week return to London with Aer Lingus cost 220 IEP, i.e. 279 EUR. Today I can fly at short notice to London with Ryanair for 65 EUR. It is as if every time you fly to London, Michael O'Leary gives you a present of 155 EUR off the historic Aer Lingus price. So more people, particularly those at lower incomes who could never afford the Aer Lingus prices can now fly. Similarly, Lidl, Aldi, Pennys, Vodafone, Amazon, etc. have disrupted markets and lowered prices. NERI is incorrect in looking for more efficiency in redistribution (e.g. more in-work benefits to the poor, which will probably price them out of labour markets), but rather what is required is more efficiency and competition in markets, as lower prices benefit in particular the less well off.
 

cremeegg

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For example, up to the 1990s a mid week return to London with Aer Lingus cost 220 IEP, i.e. 279 EUR. Today I can fly at short notice to London with Ryanair for 65 EUR. It is as if every time you fly to London, Michael O'Leary gives you a present of 155 EUR off the historic Aer Lingus price. So more people, particularly those at lower incomes who could never afford the Aer Lingus prices can now fly.
I just wanted to repeat this as it cannot be said often enough.

As a low earner in London in the 1990s it cost me a weeks wages to fly home.

The €155 extra mostly supported surplus staff at Aer Lingus, and the FF politicians they voted for. Claire Daly was a shop stewart there.
 
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