Equality in Ireland?

Stephen Donnelly

"It turns out that the wealthiest 20% in Ireland own about 70% of the country's total wealth. And for the less well-off? The least well-off 20% own more or less nothing and actually, it's worse. The best data available on wealth distribution comes from the Central Bank, and it shows this: The least well-off 40pc of Irish households, nearly two million men, women and children, have an almost zero per cent share of Ireland's wealth. We're O.K. with a certain amount of inequality - the 'ideal' situation according to a recent poll was that the wealthiest 20% would own over 30% of all assets, the poorest 20% would own about 17%, and the middle 60% would own the rest.

We don't believe that we're anywhere close to that ideal, however. In fact, we believe the wealthiest own not 30%, but 60%. And we believe the poorest own just a little over 10%. And then there's the reality - 70% of everything for the wealthiest and nothing for four in 10 people.

The Irish have an inherent sense of fairness. If you work harder, it's fair that you get more. If you invest more in your education and skills, it's fair that you get more. But it's clear we're not living in anything remotely close to what we believe to be fair.

Imagine bringing a box of 100 sweets into a primary school with 100 students, and trying to sell the current situation in Ireland to them - 20 of you are getting 70 of the sweets to share between you, another 40 of you are getting 30 sweets to share, and the final 40 of you are getting nothing. And we're going to base this allocation on how much money your parents make.

The negative equity generation don't belong in Ireland's 40pc who have no assets. They are way below that - they are the students in the primary school who were told that they have minus 10 sweets, and if they worked hard, then the total tally against them would be changed to minus 9.

And if they kept it up, year after year, then some day they can be like the 40 kids who have no sweets. For many in the negative equity generation, they'll get back to zero in their 50s. Imagine the damage that's doing right now, and the impact it's having on their children.

So if we're at a level of inequality that's much worse than we want, how did we end up here? Part of the problem is that the 20% at the top have far greater influence over the political system, and so the laws, and the tax regimes, reflect what they want, rather than what's best for the country. Partly it's due to a conspiracy of silence - the data used was only published this year, and so the sort of analysis we're looking at now was difficult to do in the past.

Partly it's due to accepting a 'masters of the universe' orthodoxy - that there's a small number of people who must be paid vast sums of money to create the wealth which will, in time, trickle down to others. In 1980, top CEOs in the US earned about 40 times what the average worker earned. By 1990 it was 80 times. It's now nearly 400 times.

So what can be done? Progressive budgets help, by seeking higher contributions from the wealthiest. Serious investment in, and reform of, education is essential.

Deprived areas need a lot more help, schools need a lot more teachers, colleges need more funding and control over how they spend those funds.
Communities must be planned to ensure a cross section of society live together, rather than the current physical separation of poorer urban communities.

Now we know - Ireland is much less equal than we thought it was. It is much less equal than we want it to be.

And if theory and history are any guide, then without some serious changes, this inequality will get much worse. In America, a country Ireland tends to track socioeconomically, the wealthiest 1% now own a staggering 40% of the country's wealth. It's time we started to move in the opposite direction."
-Stephen Donnelly.