Editorial. By Michael Smith
The most widely supported form of equality is equality of opportunity. Even Margaret Thatcher believed in it. But it has more of the qualities of “freedom” than of “equality”. Village has always tended to support a vision of equality that contemplates equality of outcome/condition – distributing ‘goods’/resources in inverse proportion to the bestowals of fortune and history on individuals. We are all equal from birth and ethically. Society’s goal is to recognise that, by distributing ‘goods’ to reinforce that equality.
If the agenda is imperative it needs to be facilitated. The first thing is to have the information – the data – to show from what basis you need to begin redistribution. But the greatest conspiracy of them all distorts the reality of inequality. Because those who benefit from inequality often want to keep it that way.
For example, inconveniently, apparently, for thoroughgoing egalitarians, it has long been the case that data from the ESRI show that the post-redistribution. Gini Co-efficient (a statistical measure of overall income distribution that is used as a measure of inequality) is improving in Ireland. Having disimproved in the early years of the boom, the Gini Co-efficient in Ireland narrowed during the economic crisis and overall from 1987 to 2019. On the back of this according, for instance, to the Irish Times, the Republic is one of the few developed countries that has avoided an increase in income inequality over the past three decades.
As pointed out regularly in this magazine and forensically by Unite the Union, in particular, this falling inequality has been presented as a “fact” but is not.
• The ESRI methodology skews the result because in Ireland the Gini Co efficient shows income inequality falling while the other standard measure of income inequality (the share of income to the top 1%) shows it rising.
• The Gini Co-efficient is peculiarly unreliable in Ireland, not being based on information on the 1.7 million households in the state but on a small sample of them – 4,183 to be exact (around 0.2 per cent of the total). The survey is voluntary. In 2019 the CSO invited over 9,000 households to take part in the survey but in the end only 40% agreed.
The CSO employs around 100 people to carry out its work, but often they call to a house and not everyone is at home. They then conduct interviews “by proxy” – that is, information is provided by “another resident of the household due to unavailability of the person in question”. 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”, according to the CSO itself.
Left think-tank TASC has said that such surveys “have well-known limitations. Being voluntary, non-response is a problem among the rich in particular, and high incomes tend to be underreported when they do respond”.
Because of all this, in the case of the Gini Co-efficient, the raw data collected by the CSO are subject to a series of statistical weights, measures, and guesswork to compensate for gaps in the interviews.
A more universal set of figures based on actual taxation levels is more accurate. The ESRI did indeed look at data from tax returns which duly confirmed increases in the share of income going to the very top. However, this doesn’t form part of the final output.
• Income inequality itself does not suffice as a measure of economic inequality (and economic inequality is not the full measure of inequality anyway). It is but one of at least seven, according to TASC. These are: income; wealth; public services; tax; capacities; family composition; and the costs of goods and services. If economic equality does not measure full economic capacity then what is measured is meaningless.
• In particular wealth is obviously an even more important component of richness than income, since it includes the total of previous income.
• Equality embraces social, environmental and cultural matters as well as economic ones. Access to services, education, healthcare, leisure facilities and a good environment constitute equality of outcome/condition at least as much as money. They are ignored by income (or even wealth)-driven assessments.
• There are serious issues with some of the historic data. Other data which Unite present show “zero real income growth” from 2007 to 2017 but are ignored by the ESRI and in the reportage, even though the source of the data is relied upon in other ways.
We are told that, regardless of our own experience, things have never been better.
Official and establishment complacency is lethal to our society and our democracy. Unaddressed inequality always ultimately generates demagoguery.
Anyone who cares can see that the richest have never had it easier but that many people struggle to survive in an extraordinarily pressurised society. Everyone can see that people in their 20s and 30s will be the first generation to be worse off than their parents.
We need to analyse the trajectory and act on it as appropriate.
The least our public service and media owe us is to ensure the time-bomb of rising inequality is properly monitored in the first place.