Have we lost sight of our obligation?

Shea O'Meara

We can all agree the whole point of government is to look after the needs of Irish society.

Obviously we differ on how this can best come about.

The argument can be made that by supporting big business there will be a trickle down effect and all will benefit. Unfortunately I've not witnessed this. Yet this seems to be the path we follow time and time again. It's never worked, but seems like the modern smart way to look after an economy.
Looking at the potential upcoming budget you could argue cutting welfare is a great idea because it's dead money. Lowering minimum wage will create jobs and so on.
I would argue in both cases we are limiting the money which would go back into the economy.
If I'm an employer who can now hire extra workers due to the cut in minimum wage, (as is the argument for it) overall no extra funds will be spent from these wage earners as their spending power is depleted in tandem with the extra hires, so I feel they will cancel each other out as regards money coming back into the economy.
Then, as in other countries, if people decide to return to or further their education in an attempt to gain employment, we see the fees set to rise at third level and post secondary courses, again geared for working class or low income people have fees raised.
Also we have the lowering of the tax bracket, meaning those on the lowest rung, will be paying more.
And should we not look at the cost of living in relation to such things?

Again we can argue this will bring in money. But I say, to paraphrase, take half a mans fish, he won't die and we've got half his fish. Encourage the man to learn how to fish and he can supply us with many fish over years to come.

We are looking for the quick instant fix. Get as much as we can now.
We've heard for years about our greatest resource being our educated workforce. Are we done with that lark?

The trickle down effect is a myth. If a person has a good earning power, they spend. If we curtail that earning power we will see people unable to spend past necessity. This will not help the economy.
If I can hire a number of workers for next to nothing, great for me. But I'm one man. It will be a great car, but one maybe two. My house will be great...but my borderline poverty workforce will be renting or in subsidised housing. I don't see how putting a vast number of people closer to poverty and in need of state aide will bolster us economically or how keeping those with the potential to better themselves and increase their earning power in the marsh of near poverty will either.

We decided to go the democratic route. We decided to look after the affairs of the nation putting no man above another.
Why time and time again do we penalise the worst off in society so those living in comfort can remain so? Why is it the supposed clever and popular view to have a Thatcher like sensibility towards the working class?

The trickle down effect has never worked. Pre-bust Celtic Tiger was a mirage at best. A glut of minimum wage jobs for a lot of people, nothing more, yet these are the people we are hitting hardest.

If we don't care about equally looking after all in society as if they were our own, (and they are you know) why do we pay lip service to the sham that is Ireland? Why fight so hard to fix an uneven top oriented sham society? What are we trying to save and why?

I would dearly love to see cuts from the top down. It would bring in more money and lessen the number needing state aide. Overall it would go some way in convincing me Irish society, as it stands, is worth saving.

rodento

What a load of leftest rubbish, do you think we should borrow more to fund the lifestyle we have nowdays:eek:

I knew something was wrong a couple of years ago when I heard someone one the radio state it was a human right to have a holiday aboard, only problem was that the tax payers were paying for it...

Looks at Greece, they have hit companies with higher taxes to help them out with the troubles. Only things is the companies have now all opted to leave:rolleyes:

T runner

rodento wrote: »

What a load of leftest rubbish, do you think we should borrow more to fund the lifestyle we have nowdays:eek:

I knew something was wrong a couple of years ago when I heard someone one the radio state it was a human right to have a holiday aboard, only problem was that the tax payers were paying for it...

Looks at Greece, they have hit companies with higher taxes to help them out with the troubles. Only things is the companies have now all opted to leave:rolleyes:

Yes thats it. The very rich shouldnt pay tax. They are the "wealth generating class". They are not like us. Let them evade, avoid and scam their way out of tax. And turn a blind eye when they run the economy over the cliff. Have you not been around for the last number of years? Another FF policy supporter who no doubt detests FF!!!

Shea O'Meara

rodento wrote: »

What a load of leftest rubbish, do you think we should borrow more to fund the lifestyle we have nowdays:eek:

I knew something was wrong a couple of years ago when I heard someone one the radio state it was a human right to have a holiday aboard, only problem was that the tax payers were paying for it...

Looks at Greece, they have hit companies with higher taxes to help them out with the troubles. Only things is the companies have now all opted to leave:rolleyes:

You seem deluded in regards to my post.
I never mentioned borrowing more money to keep the poorer off in a champagne lifestyle.
To use your terminology, if it wasn't for the right wing ideologists we wouldn't need be borrowing any money at all.
I argue for a middle ground. A fair equal shake. It's argued politicians wouldn't work minimum wage, well how about a minimum wage tier system for all those obtaining salary from the state?
If you read my post you'll note I make mention of earning power and equate it to spending and money going back into the economy. What business will survive if nobody is able to buy anything? How communist of me:rolleyes:

rodento

Basically the cost of doing business in this country has to fall, all the overheads have to come down.

That includes wages, rents, rates and government

We are still way overpaid when compared to the rest of Europe

yermanoffthetv

Have to agree with Rodento on this. Big business helped to develop this country from a backwards rock on the edge of Europe to modern hi-tech economy. Your "trickle down myth" is flawed is several areas but most importantly youre ignoring the money multiplier effect. The celtic tiger was built on investment in education,infastructre and foreign investment and was destroyed by property speculation, over-reliance on construction, bad governance and irresponsable and (probably) illegal banking practices, not capitalism. We have to get back to the basics of creating an enviroment where we are competitive and promote enterprise.

Another thing you forget to mention is that only 8% of the workforce are on minimum wage(certain sectors have a higher minimum wage than the standard one) and 40% of the workforce are outside the tax bracket. This is absolute madness in the situation were in. Higher earners pay up to 55% tax, their pensions will no longer be tax exampt under the next budget. If they contribute that level of tax back to the economy they have every right to live in comfort. They take the risks as the entrepreneur and are entitled to the rewards for success.

I dont really understand if you simply want politicians to take a pay cut or what, maybe you could make your proposals a little clearer OP and describe how this completely equal society would work (comrade :P)

mike65

yermanoffthetv, its 4-5% on minimum wage.

Ireland is not a low wage economy in any way shape or form. What it has been is a high cost economy which is why some have felt poor (even as many of them blew money on fripperies like cigs and alcohol) looking at their gas and electric bills. The last couple of years of deflation have narrowed the gap a bit but plenty of room to improve.

As for trickle-down, if a rich man buy a 70,000 car the salesman makes a commission, he
celebrates by taking the wife out for a slap up meal. The money paid by the businessman
is now partially in the till of "Luigis" who employs a dozen people and buys food from local suppliers as well as paying rates to the authorities who spend money on cleaning streets and revamping housing stock. Any spending by the rich creates some wealth for those down the line (and income chain).

Shea O'Meara

yermanoffthetv wrote: »

Have to agree with Rodento on this. Big business helped to develop this country from a backwards rock on the edge of Europe to modern hi-tech economy. Your "trickle down myth" is flawed is several areas but most importantly youre ignoring the money multiplier effect. The celtic tiger was built on investment in education,infastructre and foreign investment and was destroyed by property speculation, over-reliance on construction, bad governance and irresponsable and (probably) illegal banking practices, not capitalism. We have to get back to the basics of creating an enviroment where we are competitive and promote enterprise.

Agreed, (except on the trickle down myth).

yermanoffthetv wrote: »

Another thing you forget to mention is that only 8% of the workforce are on minimum wage(certain sectors have a higher minimum wage than the standard one) and 40% of the workforce are outside the tax bracket. This is absolute madness in the situation were in. Higher earners pay up to 55% tax, their pensions will no longer be tax exampt under the next budget. If they contribute that level of tax back to the economy they have every right to live in comfort. They take the risks as the entrepreneur and are entitled to the rewards for success.

I am not ignoring or forgetting anything buy the way.
My point is we need look at everything equally. I disagree that cutting minimum wage will have any such desired effect. And the changes in tax will cause the same results, less people spending. Aside from the day to day misery of course.

It's a bull**** knee jerk move to assume my post is about bringing in some form of communism.
If you read it, the basis is creating more poor people and state dependents will not improve our lot. And as we always take this road, do we want to fix the system as is? Why would a minimum wage earner who barely gets by as is, upon hearing these proposals give two flying ****s if the country goes through meltdown?

Shea O'Meara

mike65 wrote: »

yermanoffthetv, its 4-5% on minimum wage.

Ireland is not a low wage economy in any way shape or form.

Which is even better news because the cost of living is so low???

mike65 wrote: »

What it has been is a high cost economy which is why some have felt poor (even as many of them blew money on fripperies like cigs and alcohol) looking at their gas and electric bills. The last couple of years of deflation have narrowed the gap a bit but plenty of room to improve.

So we're all okay just whinging....nice, was worried there:rolleyes:

mike65 wrote: »

As for trickle-down, if a rich man buy a 70,000 car the salesman makes a commission, he
celebrates by taking the wife out for a slap up meal. The money paid by the businessman
is now partially in the till of "Luigis" who employs a dozen people and buys food from local suppliers as well as paying rates to the authorities who spend money on cleaning streets and revamping housing stock. Any spending by the rich creates some wealth for those down the line (and income chain).

It's a small scale issue. How are the restaurant workers lot improved? More waiter jobs? Great. Exactly my point about the Celtic Tiger.
If the trickle down effect held any weight we'd have nobody in poverty.
He can bring his wife to a fancier restaurant now he'll have more staff at the same salary expediture;)

Bloody Nipples

Shea O'Meara wrote: »

Looking at the potential upcoming budget you could argue cutting welfare is a great idea because it's dead money. Lowering minimum wage will create jobs and so on.
I would argue in both cases we are limiting the money which would go back into the economy.
If I'm an employer who can now hire extra workers due to the cut in minimum wage, (as is the argument for it) overall no extra funds will be spent from these wage earners as their spending power is depleted in tandem with the extra hires, so I feel they will cancel each other out as regards money coming back into the economy.

If you're an employer who is now hiring extra workers then you are an employer who is taking people off the dole thus lowering the amount the government shells out for benefits.
Even if your claim that lowering the minimum wage won't increase the amount of money going into the economy, I fail to see how you don't understand that taking people off the live register reduces government expenditure as well as unemployment (which one would assume is the goal)?

Whether it's increased income through tax or reduced expenditure either way it gives the government more money to play around with.

Shea O'Meara

Bloody Nipples wrote: »

If you're an employer who is now hiring extra workers then you are an employer who is taking people off the dole thus lowering the amount the government shells out for benefits.
Even if your claim that lowering the minimum wage won't increase the amount of money going into the economy, I fail to see how you don't understand that taking people off the live register reduces government expenditure as well as unemployment (which one would assume is the goal)?

Whether it's increased income through tax or reduced expenditure either way it gives the government more money to play around with.

To what end? So we can make our way round the merry-go-round once again? If you're on minimum wage, that's you pretty much but we must all club together so people better off can remain so? Did we jump at making health & further education available to everyone the last time we had it good? No. If you're at the bottom you stay there and watch your minimum wage fluctuate depending on how the big boys are doing.

mistermouse

Lowering the Minimum wage will reduce spending in the economy, and in the current circumstances its unlikely that employers would be ruching to hire more staff, more likely to pocket the savings.

I did not hear alot of employers complain about the minimum wage but rather all the costs of doing business in this country. The Government should have looked at issues such as Electricity, rents and Rates for example

What I did hear lots of employers argue for was a reduction in employer PRSi for new employees - something that would have encouraged more job creation

dan_d

While I do understand the worry that people have about hitting low paid people hard, there's a few things I just don't understand.At all.

Firstly, what alternative do people think we have? Everyone out there that's saying this plan is so terrible and it's appalling etc,etc....what else did they think was going to happen? Put the bank guarantee to one side for a minute. We have to get our budget deficit under control (I realise I sound like a certain Minister saying that...).But it's true.We do.And how best to do that? By the sounds of things, a lot of people seem to think that if we slash wages across the Public sector, take away ministerial cars and perks, and reduce their salary by half, and get rid of the HSE - that will solve all our problems. Every last one. Maybe a couple of notches on income tax, but that's it.

What are we like?? Where did you think the money was going to come from???It had to be a combination of cuts in spending and tax. We have one of the highest costs of living in Europe. One of the surest ways to tackle that is to cut the minimum wage. It won't solve it - but it will tackle it. Now, I'd question if they aren't cancelling that out completely by raising VAT, but that's another day's argument.

Our minimum wage and SW (give or take 12 euro) were last set when the country was at it's highest peak in a bubble.HOW is that sustainable? Whether we're in a mess or not - that is not sustainable.And why do we have this idea that you're entitled to have a high wage when earning the minimum wage? I understand it has to be in line with the cost of living. But how about this - if you want to earn more money, maybe you should take responsibility for that yourself and go and improve your skills/education, to get a new job.Not standing there with your hand out saying "more please, I'm entitled to more".

As someone who is on the dole myself, I do actually have an understanding of the fact that yes, it is difficult to make ends meet. There's a few things about that budget that don't make much sense to me. I don't understand why they cut the minimum wage and widened the tax bands at the same time, for instance. And I really don't understand why they are raising VAT - I think they are cancelling out any gain they might make in the cost of living by doing that. And I believe there has to be some cuts to social welfare, certainly if you're on the dole longer than 4/5 years, and cuts to other benefits.But we can't just keep going the way we have been, it's totally and completely unsustainable.

Shea O'Meara

I would love to hear CEO's, directors and politicians gripe about their own salaries using that unsustainable minimum wage tosh.

Please see below:

The data for 2009, released by the Central Statistics Office, showed:

* The percentage of people in consistent poverty was 5.5%, up by 1.3%;

* Another 14% were at risk of poverty;

* The consistent child poverty rate soared to 8.7%, from 6.3%;

* Lone parent households were most likely to be surviving below the breadline, at 17%;

* The average gross income for households dropped by 7%;

* 24% were in arrears on one or more payments, such as utility bills, rent, mortgage, hire purchase agreements or loans, up from 10%;

* Almost 48% of households could not meet an unexpected expense of €1,000.

European Anti Poverty Network (EPAN) Ireland said the level of poverty was unacceptable and criticised the Government's the four-year plan. http://news.eircom.net/breakingnews/18987543/?view=Standard

I'm simply putting it out there that the way we usual try to fix these issues relating to our economy are flawed. We time and time again squeeze for the quick buck. It does not work in the long term and for most of the people this article applies to, it's the same old story decade after decade.

rodento

Starting to get hacked off with this whole decent wage for decent living crap I'm hearing from the Unions and the like:eek:

Lets put it plain and simple

We pay ourselves way to much money

As a consequence, the cost of living has to go up to pay for the wages and saleries. Look at it this way, if I pay 10 people 50000 for a job that should be 40000, I agree with you, my staff will have an extra 10000 to spend on the ecomany(so far so good...)

The problem is that, I have to cover my costs, so I have to charge people extra for my goods to cover the excessive cost of my saleries.

If all employors are paying excessive wages, everything goes up cause the cost of business gets to expensive and and the end of the day people have to make a profit.

This is all well and good if I am selling my produce in a closed ecomany and people can afford my products and don't mind inflation, but I sell all my goods overseas and my costs are to high compaired to the market I am shipping to, so I have to reduce my overheads or go bust...

Another problem is my employees, If they spent the extra wages in the local ecomany, I'd be kinda supporting local business and the money would circulate in the ecompany several times, but my employees are greedy feckers and have decided that goods are to expensive in ireland and buy most of there stuff over the border:eek:

Just think what happenned with benchmarking, we have 300,000 public employees and paid them at least 10% wage increase(forgetting other page increases over the last 10 years) these people spent most of the money abroad and the cost of government has rocketed. Companies can't afford the rates and levies thrown at them and have simple gone out of business and the is nobody left to pay government the cost of the the governments wages and saleries.

We simply have to cut costs in this country and that includes minimum page and social services

Shea O'Meara

rodento wrote: »

Starting to get hacked off with this whole decent wage for decent living crap I'm hearing from the Unions and the like:eek:

Lets put it plain and simple
...

The problem is that, I have to cover my costs, so I have to charge people extra for my goods to cover the excessive cost of my saleries.

If all employors are paying excessive wages, everything goes up cause the cost of business gets to expensive and and the end of the day people have to make a profit...

I do not wish to personalise, however as you raised it, have you thought about cutting your salary? My point is why are minimum wage workers the first on the table? Of course we need cuts/savings, but why the most vunerable first? Minimum wage workers do just that, work. They are not state funded and should not be treated like an expense. Do your workers not earn their salary? They are private citizens doing a job of work, not a charity group, (but may be made so) living off the tax payer. They are the tax payer. Who are these changes set to benefit? Them when they get their euro a week back should you see another boom only to have it taken away when the all knowing, suddenly economically astue people in power **** up again?
With your points in mind, I assume they all got raises when times were good and you had no minimum wage employees, because then your gripe would have some merit.

Pete_Cavan

Shea O'Meara wrote: »

The argument can be made that by supporting big business there will be a trickle down effect and all will benefit. Unfortunately I've not witnessed this.

So you did not witness all the houses/cars/expensive holidays and general consumer spending during the boom then?

Shea O'Meara wrote: »

If I'm an employer who can now hire extra workers due to the cut in minimum wage, (as is the argument for it) overall no extra funds will be spent from these wage earners as their spending power is depleted in tandem with the extra hires, so I feel they will cancel each other out as regards money coming back into the economy.

Spending power is not depleted by lowering wages. If our labour costs decreased across the board so would the cost of living, meaning you would have as much spending power even if you have less money (i.e. you can buy more goods and services for less). Also The main reason we can not build up domestic industries is because the cost of doing here is much greater than most other countries meaning we can not compete internationally. Our only domestic industry that competes internationally, agriculture, is heavily subsidised, mainly from abroad. And lets not forget our tourism industry, which is extremely important to our economy, better value for money here would bring in more visitors, who bring in more money.

Shea O'Meara wrote: »

Also we have the lowering of the tax bracket, meaning those on the lowest rung, will be paying more.

Replace the word more, with the word something.

Shea O'Meara wrote: »

And should we not look at the cost of living in relation to such things?

How do you propose reducing the cost of living without reducing wages?

Shea O'Meara wrote: »

Again we can argue this will bring in money. But I say, to paraphrase, take half a mans fish, he won't die and we've got half his fish. Encourage the man to learn how to fish and he can supply us with many fish over years to come.

Lower labour costs makes it easier to start up new businesses and allows businesses to grow quicker. How do you propose this teaching a man to fish scenario happens if it is too expensive for people to start up new businesses? Also the whole "make the rich pay" idea means there is very little incentive to become successful. How are the entrepreneurs and employers of tomorrow going to develop if their reward will be having to hand over half their earnings to pay for people who never worked a day in their lives.

Shea O'Meara wrote: »

We are looking for the quick instant fix. Get as much as we can now.
We've heard for years about our greatest resource being our educated workforce. Are we done with that lark?

We are not the only country with a well educated workforce. The main reason MNCs are here is because we have a balance between the workforce and low corporation tax. If we lower our labour costs we would attract more MNCs. All of the major economies with the power to do so are devaluing their currencies, making it cheaper to do business in their country. We, as members of the euro do not have this option (which is a good thing IMO) so we can not join in on this race to the bottom. Therefore we must find other ways to become a low cost economy or else we will be left behind and lose the MNCs.

Shea O'Meara wrote: »

The trickle down effect is a myth. If a person has a good earning power, they spend. If we curtail that earning power we will see people unable to spend past necessity. This will not help the economy.

You just contradicted yourself there. If the trickle down effect was a myth then a person with good earning power would not spend their money and would keep it all under the mattress. By spending their money in the wider economy people spending money creates more jobs. If you believe what you posted (that curtailing earning power will not help the economy) you obviously have witnessed the trickle down effect which you claim is a myth.

This is exactly why Labour will not be as successful in the election as the polls would suggest, they throw out all these statements that go down well with the public, but when challenged their policies do not stand up.

rodento

Don't you worry my salerary has been slashed, I'm not getting at you but people should realise that the old solutions like capital projects etc. just don't work anyone because money will move out of the state

Shea O'Meara

Pete_Cavan wrote: »

So you did not witness all the houses/cars/expensive holidays and general consumer spending during the boom then? To an extent. These things fleeting for some, come and go, while for others, they need not worry about minimum wage issues.


Also the whole "make the rich pay" idea means there is very little incentive to become successful. How are the entrepreneurs and employers of tomorrow going to develop if their reward will be having to hand over half their earnings to pay for people who never worked a day in their lives..

You just contradicted yourself there. If the trickle down effect was a myth then a person with good earning power would not spend their money and would keep it all under the mattress. By spending their money in the wider economy people spending money creates more jobs. If you believe what you posted (that curtailing earning power will not help the economy) you obviously have witnessed the trickle down effect which you claim is a myth.

The trickle down is just that and never lasts. It's a myth that the working class lot is improved by bigger business getting wealthier. Who are on their uppers now and who will likely coast through this without fear of missing out on a holiday this year?
It's nice to have money you don't need to tuck under your mattress. There is a great deal of difference between getting by or getting by, but being able to afford a night out. This is the razor thin wage we plan to cut.

'Make the rich pay' is as much a buzz term as 'We can't afford minimum wage'.
Minimum wage is designed to insure workers get enough money to get by on. Can we agree some employers would play a 'how low can you go?' as regards salary if we didn't have it?
That being said, as posted, if we discuss cutting the wages of minimum wage earners, we have as much right to discuss cutting the wage of every other taxpaying private citizen in the country. They are a soft target because they are already at the commonly known bargain basement, any lower is illegal going rate. We can pin point that group and discuss it in open forum. Why are we not talking about managers, you, me in the same breath? The logic applies across the board.
As a private citizen, how would you feel if the politicians, media, every man and his dog were discussing your salary and insisting it need be cut?
If you would not be okay with that, then you've no weight in your argument. The same logic applies about the salary of each and evey one of us. If we cut minimum wage, we should all be reduced in salary accordingly.

rodento

Shea what would you say to workers after docking their wages 20% when they accuse you of demoting them relative to those at the bottom of the ladder who haven't been docked at all:eek:

Shea O'Meara

rodento wrote: »

Shea what would you say to workers after docking their wages 20% when they accuse you of demoting them relative to those at the bottom of the ladder who haven't been docked at all:eek:

I would fight tooth and nail not to have my salary cut. Just putting that out there.
Minimum wage is the lowest allowed by law. They are already earning what's deemed enough to get by. If we expect they can afford a cut, (by afford I mean live on) then why not all of us?

In light of that, to answer your question, if it's the only viable thing to do, it needs be done. Before you throw the proposed cut in my face, the difference is not having as much as you'd like and not having enough period. That's why I'm railing on about this.
Actually, if I'm already at the lowest by law, others can take solace in still not being in that position and should actually worry that if the bar is lowered on minimum wage after a period they may find themselves in a position where they have not enough to live on, but are still making more than a minimum wage worker who's just screwed really.
I just feel if we go ahead with it, it should be across the board but preferably touching those on minimum wage last, if at all.
Why are they a special case when it comes to cuts? Why aren't the government arguing that we all take a cut?
If you lose or make money it's based on business. If I make or lose money it's based on the business I work for. Here we have the state telling a private individual, a taxpayer..'You can only make this much'. Like they are a faceless sub group of people. A bastardisation of the reason it was brought in, to stop employers low balling. I would guess if you were cutting staff salaries you'd hold a face to face and explain the situation, not just do a broad cut.

rodento

Shea, money for wages and saleries has to be made or borrowed

Its not something you should take as granted