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Niall Crowley: Civil society must demand greater income equality (October 2011)


This is a difficult time to be involved in organisations that seek a more equal, environmentally sustainable and participative society. Poverty, unemployment and emigration are increasing. Key public services and welfare provisions are being diminished. Funding for ‘civil society’ is being cut with organisations closing or reducing their work. The political system is increasingly unresponsive to organisations that seek to promote alternatives to current responses to the economic crisis. The media space for public debate is virtually closed to such organisations.
Claiming our Future (www.claimingourfuture.ie) is a movement that brings together people from the different parts of civil society committed to equality, environmental sustainability and participation. In this way it is hoped that a civil society force, more powerful than it has been possible to mobilise to date, would emerge with a greater capacity to make an impact. It is based on an understanding that a civil society space is needed where people can identify shared values and positions, explore alternatives to current policies, and test out the political choices being made against this shared value base.
The need for such a movement is urgent. A recent study (by the Fondazione Rodolfo DeBenedetti in Milan, with Brian Nolan, of UCD’s College of Human Sciences as one of the editors) found that the percentage of people reporting deprivation of two or more items, out a list of eleven defined as ‘deprivation items’ (Being without heating at some stage in the last year/Unable to afford a morning, afternoon or evening out in the last fortnight/Unable to afford to replace any worn out furniture etc, rose from 12% in 2007 to 17% in 2009.
The study did find a fall in income inequality as a consequence of recession. The Gini coefficient, which measures it, fell from .32 in 2007 to .29 in 2009. Despite this, the share of household income going to the highest ten per cent stood at a significant 23% in 2009. Furthermore the top 1% of earners continued a long-term upward trend in their earnings.
The study warned that a new era of sharp distributional conflicts could now emerge between rich and poor people and between older and young people. The forthcoming budget is likely to reflect this danger in prioritising cuts in public spending over increased taxation of the wealthy.
Claiming our Future point out that there are alternatives to what is currently on offer and that there are choices open to Government in framing this budget. The choices that will be made are, however, most likely to benefit the wealthy rather than those living in poverty or on low wages.
One key choice will be the balance decided on between taxing the wealthy and cutting public expenditure. The priority should be on increased taxation of wealth and removing tax exemptions that reduce the effective tax rate on the wealthy if a more equal society is to emerge out of the crisis. This taxation would free up resources to protect public services and welfare payments and to create jobs.
This choice is vital since previous economic crashes have been found to occur at moments of high levels of income inequality. An IMF analysis also found that spells of economic growth last longer in countries with relatively low levels of income inequality. Higher levels of violence, imprisonment and mental health issues and lower levels of life expectancy, educational attainment and social mobility have been found in countries with higher levels of income inequality.
In taking this position Claiming our Future is articulating ideas developed at a ‘national discussion’ it hosted in May in Galway on reducing income inequality. Income inequality was identified as being at the heart of economic crisis and as leading to behaviour that damages societal culture and the planet. People on high incomes hold disproportionate influence. The need to level out income gaps was highlighted. It was considered that a maximum income threshold, set at some ratio to social welfare rates or to the minimum wage, was required.
The event concluded that not enough is being done about this issue. Civil society needs to take action to demand greater income equality. The absence of political will was identified as a barrier to change. The December budget provides an important opportunity to challenge this.