Archives

Important research from Unite shows Irish Times wrong on most important social issue of our time. By Suzie Mélange. In a report entitled, ‘Hungry bellies are not equal to full bellies’, to be launched on Monday 1 March, Unite Trade Union in the Republic of Ireland will provide lengthy research-based evidence of the growing inequality and deprivation in our society. The report was produced with the assistance of Dr Conor McCabe. Ireland’s fragile boom was sustained by a dangerous mix of hubris and myth-making: First, an ‘Economist’ or appointed ‘expert’ would produce an ‘economic analysis’ to tell us that what we were seeing before our eyes – an impending catastrophe – was in fact a mirage. Second, the media would take that ‘analysis’ and bestow upon it legitimacy and gravitas, with unhealthy dollops of scorn for naysayers. Third, Politicians would then lift this economic hocus pocus and media spin and use it to define political direction. The methodology is still in use. On 5 December 2020 the Irish Times, once known as the ‘paper of record’, published a gushing piece selling Ireland again as a world-beating nation where wealth was rising, and inequality falling, at the same time. RTE’s Brainstorm website had published a similar article on 19 November, by the University College Cork Economist Seamus Coffey. The claims made by Leahy and Coffey are misleading and unfair. There is a danger that, unless challenged, these claims will become accepted as facts.Disproving them is not a straightforward process because the issues at hand are somewhat technical. But Unite has applied itself to the task. It makes the case that both Coffey and Leahy use specialist terms and methodologies and in the process gloss over the limitations, contradictions, and failings of the surveys they put forward in their articles as objective and unassailable evidence of their claims. In the hubristic words of Leahy, “the data is the data, the facts are the facts”; while for Coffey, “Everyone can have their own opinion on the best way forward, but they cannot have their own facts”. In the time-honoured way Senator Jerry Buttimer, speaking in the Seanad on 14 December, referenced both authors and stated that they had both showed that in Ireland ‘people are getting richer and we were becoming more equal’. He seized upon the narrative to celebrate these “facts”, namechecking the “paper of record” (though the Irish Times itself now prefers the word reference to record) on the Oireachtas record in doing so. But falling inequality is not a “fact”. Unite claims it is a conclusion drawn and presented from incomplete and deeply flawed data: It is wrong to present the “Gini Co-efficient” as pointing to a fall in income inequality without any explanation of the serious and acknowledged systemic flaws in the “Gini” method. This method (Gini) consists of a survey of a small number of self-selected households, such method being known to under-report high incomesA more universal set of figures based on actual taxation levels which points in the opposite direction, to a rise in income inequality, needs to be acknowledged and included. The usual one is that of the income of the richest 1% relative to others. Income inequality itself does not suffice as a measure of economic inequality anyway. It is but one of at least seven, according to left think tank, TASC. The reason why a wider assessment of inequality beyond mere incomes is necessary would appear to be obvious, but it can be stated as follows – if that which we all need to live including shelter, food, healthcare and other essential needs are removed from an assessment of inequality, and mere income is assumed to be given to us free of these needs, then of course inequality can be presented as falling. There are serious issues with the historic nature of data presented as showing falling inequality in any event, with some key data relied upon dating back to the ‘Celtic Tiger’ period up to 2007 – before the financial crash of 2008, the unequal ‘recovery, and now a global pandemic Other data which Unite present show “zero real income growth” from 2007 to 2017 but is ignored in the reportage, even though the source of that data is relied upon in other ways. There is no discussion of wealth inequality – even though we know from international research that wealth is more unevenly distributed than income. In his article, Leahy uses three different terms for inequality as if they are interchangeable. But they are not.He starts off with economic inequality. He says that “One of the most corrosive trends in western democracies – a social and economic problem that has impoverished millions of ordinary people and fuelled the rise of far-right populists from the US to Britain to Europe and beyond – is the rise of economic inequality”.Leahy does not provide a definition of the term but according to TASC, economic inequality “refers to the unequal distribution of material resources – that is the resources people need to attain goods and services to satisfy their diverse needs and to flourish as individuals”. It is clear therefore that this refers not only to income, but also to access to essential services such as health, education, childcare, homecare, and housing. It also relates to personal capacities and how this affects inequality, such as illness or disability.TASC, which ironically Leahy cites, says that “economic inequality is about more than income, since it is only one of the material factors that affect people’s ability to flourish. Income disparities may matter less in a society with strong universal public services than in a society without them”.When measuring economic inequality, TASC looks at seven distinct yet interrelated factors. These are: income; wealth; public services; tax; capacities; family composition; and the costs of goods and services.In his article, Leahy goes from economic inequality to immediately talking about incomes, which is only one element of economic inequality. He then moves on to equate income inequality with “inequality”. What started

How the newspaper of reference dealt with correspondence challenging an important article it published about equality Brendan Ogle Of Unite submitted the following article to the Irish Times on 15 December 2020 Unite House Unite the Union 55/56 Middle Abbey Street                        Dublin 1 D01 X002 Republic of Ireland Republic of Ireland Head Office 15th December 2020 On 14 December 2020 Jerry Buttimer stood up in the Seanad and said that in terms of personal finances, Ireland was becoming a more equal place. ‘The reality is that income growth and inequality is falling in our country at this time’ he said, ‘and as Mr. Pat Leahy wrote recently in The Irish Times, people are getting richer and we are becoming more equal.’ Those seeking to help families and individuals suffering from shocking deprivation here this Christmas will be shocked at this news. And so they should be. Because it is false. It is not acceptable for Journalists to present as ‘facts’ things that are not facts and present them as seasonal gifts to ideologically driven Politicians practised in the policies of division, isolation, poverty and deprivation.  The article cited was published the previous week and contained the claim that rising incomes and falling inequality ‘is a neat trick, managed by very few.’ Both Buttimer and Leahy also criticised the naysayers and NGOs who argue otherwise in tones that remind me of Bertie Ahern’s infamous ‘pre-crash’ invite to those ‘talking down’ the economy to consider suicide. Leahy put himself out there as far as to say ‘the data is the data, the facts are the facts… we have been getting richer, and also more equal at the same time.’  Wow! So let’s talk about ‘facts’. Leahy highlights this quote from a 2020 report on inequality by TASC: “while inequality was on the rise elsewhere, it was falling here.” But the next sentence – literally the next sentence – says that ‘Another explanation for Ireland’s stability is that it is only apparent, and that inequality has actually been increasing. The data presented so far has ultimately been drawn from surveys, which have well-known limitations when it comes to the measure of income, and hence inequality.’ Leahy leaves this vital context out.  The survey in question is the CSO’s annual Survey on Income & Living Conditions (SILC). It supplies the information for calculation of the ‘Gini coefficient’, a formula used to calculate income inequality that Leahy presents as showing falling inequality. The SILC is a sample survey of just 4,183 households out of 1.7 million in the state (around 0.2 per cent of the total).  The survey is voluntary and only 40% of those sampled agreed to take part. Almost 2,000 households refused outright, while another 2,800 gave various reasons listed as ‘other’ by the CSO.[1]   So, while the CSO conducts a random selection of private households for the initial catchment, within that random selection there is a form of self-selection, there are households that will not share their income data, and it is only those that freely volunteer the information that end up in the survey.  But that’s not all. The CSO employs around 100 people to carry out this work, but often they call to a house and not everyone is at home. So they conduct interviews ‘by proxy’ –  information is provided by ‘another resident of the household due to unavailability of the person in question’. [2]   Up to 50 percent of all interviews for the income survey are by proxy, which gives rise to issues ‘with the quality of data for proxy responses for certain variables’. [3] This leads to acknowledged and well flagged ‘statistical bias’ that Leahy leaves out in his rush to declare what ‘facts’ are. He also fails to tell us that the report actually says ‘high incomes tend to be underreported when they do respond.’ It is no surprise then to hear that the data collected from household surveys has to be ‘cleaned up’ by the CSO before it ends up in the final survey. This requires the use of various statistical weights and assumptions to compensate for missing data and known bias.  However, even if the survey and its methodologies were absolutely flawless, there would still be issues with their underlying assumptions within an Irish context. The ‘Gini coefficient’ formula strives to capture income distribution after income tax and social welfare transfers, which it labels as ‘disposable income’. However, the Irish welfare system is different from others within the EU in that it is geared more towards monetary transfers and less towards the provision of services.  Put simply, in Ireland the formula does not take into account the cost of housing, rent, health, childcare, utility services, transport, or education. In other words ‘Gini’ only measures ‘income’ before Irish people pay their bills. So much for ‘facts’! It gets worse. The second source that Leahy draws upon is an article by UCC economist Seamus Coffey which is on RTÉ’s Brainstorm website. Coffey argues that Ireland is ‘one of the few developed countries that has had high income growth and falling inequality’. He says that while people may disagree on the way forward, they cannot disagree on that point. As with Leahy, he says that the facts speak for themselves. Coffey underpins his point with data taken from a paper that was published in the Journal of Income Distribution in 2018 entitled, ‘Rising Income Inequality and Living Standards in OECD Countries: how Does the Middle Fare?’.  Guess what he uses? Yes, you got it, the ‘Gini coefficient’. He even uses it to claim that Ireland ‘is the only country in the sample to achieve both high income growth and falling income inequality’.  However, the 2018 paper from which Coffey draws this information cites not one, but two, indicators of income inequality.  The first is ‘Gini’ which measures everything except what poor people need to live, and the second is the income share going to the top 1%. This shows income inequality rising. In fact it’s not only rising. Ireland actually had the third highest rise in income share going to the top