High Irish GDP is an illusion, Ireland is not that rich

maninasia

We all know the large disparities between GNI and GDP.

I think it's more useful to look at certain metrics such as wages and government tax revenues though

1. On wages we seem to rate relatively highly compared to most of Europe and indeed the world. And yet we are definitely second rate compared to American wages. Take any mid level to senior job in Ireland in a US multinational and I bet the American coworker in the same position will be on 1.5 to 3.0 times the wage. And that's before higher income taxes. I always find that curious. it could just be Americas exceptional capitalism at work. Or it could be Europe is losing it's competitive advantages vis a vis the rest of the world over time (lack of resources on a small land mass, aging population, increased competition). Anyway Ireland stacks up well enough in Europe in terms of salaries. But beyond compared to resource rich countries or US, not so sure.

2. Government revenues are off the charts for the last few years due to high taxes on pretty much everything along with full employment and multinational sector washing their European incomes thru us. No matter what you think about it, the Irish government is CASH RICH (yes I know the national debt etc etc). So the Irish state is rich. But are they rich at the expense of...

Us?

It's no wonder you won't feel rich if your pocket is getting dipped by well over 50 per cent (income taxes , VAT, excise duties and carbon taxes ) while allowing costs to rocket (insurance, housing, fuel).

it's no wonder you don't feel rich when that money is flowing away from you after you worked hard for it.

It's no wonder you don't feel rich when you get **** all back for it from the state although they constantly give it away on extremely generous social welfare (billions on very generous COVID schemes , provisioned a billion just for Ukranian refugees this year , I believe somebody can correct me if I'm wrong, I guess hoteliers are feeling rich right now though basking in the state's cash bonanza).

Sam Russell

Any metric can be selected to prove or disprove that Ireland is rich or wealthy.

Salaries of top jobs is is irrelevant wrt to USA as many many workers need two or three jobs to survive. Top pay only gets to the top few per cent.

No single metric proves the issue discussed in this thread.

maninasia

I am not talking about top jobs in the US. What I'm saying is that middle managers and professionals tend to get paid much better in the US. Why that is, scale or some other reason, I'm not sure. Go on to Glassdoor to see for yourself.

Everybody knows no single metric proves or disproves things.

Give us your preferred metrics and stats and YOUR opinion instead of chunks of waffle and nuggets of gold such as most people don't get sick etc. EVERYBODY gets sick, it's only a matter of time.

One thing is for sure , at the moment the Irish government is cash rich but they are also throwing billions here and there at their favorite voters and causes. They are forecast to have a 6% growth in revenue this year on top of 7% growth last year. Did you readers see your wages go up by similar amounts the last two years?

Another point is who owns most of the assets on Ireland. Over 80% of people over 40 own their own homes but under 40 the number who own one drops dramatically, turning them into the tenant class with little assets and who don't benefit from rising housing prices.

Peregrinus

1. On wages we seem to rate relatively highly compared to most of Europe and indeed the world. And yet we are definitely second rate compared to American wages. Take any mid level to senior job in Ireland in a US multinational and I bet the American coworker in the same position will be on 1.5 to 3.0 times the wage. And that's before higher income taxes. I always find that curious. it could just be Americas exceptional capitalism at work. Or it could be Europe is losing it's competitive advantages vis a vis the rest of the world over time (lack of resources on a small land mass, aging population, increased competition). Anyway Ireland stacks up well enough in Europe in terms of salaries. But beyond compared to resource rich countries or US, not so sure.

You're stating, and yet missing, an obvious point — Ireland isn't the outlier here; the US is. You find it "curious" that Ireland is like most comparable countries, rather than being like the outlier, the US. But why would that be curious? Surely Ireland being like most comparable countries is what we would expect? At the end of your paragraph you compare Ireland with "resource rich countries or US". But why would Ireland be like a resource-rich country? We're not a resource-rich country. So we're back to a straight comparison with the US when there's no obvious reason why we should be like the US rather than like other countries.

And you almost recognise at least part of the reason why other countries are not like the US. You compare wages for "mid-level to senior jobs", without recognising two important factors. First, in any economy people holding mid-level to senior jobs are a minority of the workforce; what's true for them is not necessarily a general characteristic of the labour market. (This is especially true in the US where the middle class, as a proportion of the workforce, is smaller than in Europe.) Secondly, the US is characterised by much greater wage inequality than is considered normal (or desirable) in Europe. The high level of earnings for those in mid-level to senior jobs in the US is sustained partly by relatively low earnings for those in operational positions.

It is true, though, that on average US wages are higher than European wages, and this has been true for a long time. Because this is an all-economy average, wage inequality does not explain it. Accounts of why this is so vary, but usually focus on the fact that Americans have higher overall productivity because they work longer hours and take less holidays. Their hourly productivity is not greater than in Western Europe.

maninasia

I asked a question I didn't answer the question because I want to see what other peoples ideas are.

Ireland is definitely NOT like most countries, we have a pretty unique economic model in Europe still and by far the most successful in attracting foreign investment in the world except for Singapore. Interestingly salaries in multinationals in Singapore for locals are pretty high too , usually 120, 000 USD for any kind of professional role (they strongly favour local hires in Singapore).

But I think it is interesting that a similar job in an American multinational in Ireland would often pay significantly less than that job in the US. And there are a LOT of employees of those US Multinationals in Ireland. But the firms here are ALSO pulling in huge amounts of revenue from all over EU and beyond . They are often well paid in Ireland and compared to local companies so I guess it is all about the local base of comparison (indigenous companies) being lower in Ireland and of course huge numbers of European and foreign workers who will also happily accept these wage levels.

You claim operational workers are paid a lot less in the US but from what I understand they are actually paid reasonably well and often more than operational workers here e g. Autoworkers . I also know many working in other technical industries and they have done very well over many decades. There is higher income inequality but that doesn't mean that is a bad thing if more people are earning more money and starting from a high base. It's a fairly meaningless stat taken on its own .

I mentioned resource rich countries to give some balance. They are also very diverse e.g. Canada, Australia, UAE, Russia etc.

Peregrinus

Income inequality is hugely important to this conversation. For one thing, it's generating most of the examples you're offering of where wages are higher than for comparable positions in Ireland. It's interesting that you now bring up Singapore — SG has even higher income inequality than the US so, yeah, salaries for senior executives in competitive sectors in SG are very high. Average earnings across the economy, however, are lower than in Ireland

In short, you're taking instances of income inequality and using them to argue that other countries have generally higher wages in Ireland. I know that's not your intention, but it's what you're doing.

As for whether higher income inequality is "a bad thing", you argue that it's not necessarily because it means that "more people are earning more money and starting from a high base". But it also means that more people are earning less money and starting from a low base, and that second group may be larger than the first group. Plus, on a societal level, it's associated with higher degrees of dissatisfaction, alienation and self-reported unhappiness. Even if it's economically advantageous — and you haven't demonstrated this, merely suggested that it might be — there's general consensus that income inequality is socially disadvantageous. We can't ignore that.

If you want this conversation not to be about income inequality, you have to stop buttressing your case with selective examples that refer only to higher-paid workers. We need to look at wage levels across the entire economy, find countries that have higher wage levels than Ireland does on this basis (which includes the US but not Singapore) and hopefully don't have higher inequality (that knocks out the US), and then look at what they are doing to see if we can learn from it.

On that basis, you're looking at the wrong countries. Countries with higher earnings and similar or better income distribution than Ireland has include France, Denmark, Austria and the Netherlands.

Bluefoam

Over 80% of people over 40 own their own homes but under 40 the number who own one drops dramatically, turning them into the tenant class

Care to furnish us with the actual statistics?

m2_browning

https://www.boards.ie/discussion/comment/121258251#Comment_121258251

There definitely are politicians and their representatives who want to paint Ireland as a basket case, and yes there undoubtedly are multiple issues discussed to death on this forum.

But having seen the world it’s hard not feel like our issues are very much first world problems and a far cry from the glory days of the Great Recession which scared my generation

m2_browning

https://www.boards.ie/discussion/comment/121259284#Comment_121259284

Anecdotally recently rang my GP got an appointment next day, my UK colleagues were in shock as they have to wait and wait. But that’s an anecdote, health is one of those things where amount of money spent doesn’t seem to translate into better services, just look at US (tho possibly the opioid phentanyl epidemic which is yet to hit us is stewing their results)

techman1

https://www.boards.ie/discussion/comment/121261615#Comment_121261615

You are not comparing like with like ,in the UK a GP appointment is free so that is why there are waiting lists there for GPs, here it is at least 60euros to see a GP , only the medical card holders can get it free. Therefore in the UK the people paying the taxes are getting back the benefits in free health care. Here by and large health care is not free and the government has pushed those middle income workers into private health insurance. That's a very big difference. Ireland is a great place to be on benefits

Peregrinus

https://www.boards.ie/discussion/comment/121261814#Comment_121261814

But the fact remains that both the people with a medical card and the people who have health insurance/pay privately get better access to a GP in Ireland than most people get in the UK. If your criterion is "costs the least" then the UK GP service is superior, but if it's "delivers the service more effectively" then the Irish GP service looks to be the superior.

Geuze

https://www.boards.ie/discussion/comment/121261814#Comment_121261814

Most healthcare is financed by taxes in Ireland (75%).

Yes, you are correct, about half the population must pay for GP visits.

There are two other fees in healthcare:

• ED fee = 100 euro
• DPS fee up to 80 pm?

Otherwise, all hospital care is free at point of care, paid for by taxes.

Geuze

https://www.boards.ie/discussion/comment/121261549#Comment_121261549

France has higher labour costs than us, due to much higher SI conts.

But are you sure wages are higher in France?

Peregrinus

I was working off this: https://www.statista.com/statistics/557777/average-annual-salaries-in-europe/

. . . which gives an annual rather than an hourly rate and, more to the point, give an average rather than a median figure. (If we want to know which the economy as a whole pays the higher wages, I think the average is the appropriate figure to use, rather than the median.) Also my figures are for 2022; yours are for 2018.

The truth is that Ireland and France are probably broadly similar here; depending on which measure you pick (or can find) you can probably find one to be a bit ahead of the other, or vice versa. But my main points remain; the technical point that comparisons of earnings levels which ignore earnings inequality risk being misleading, and the policy point that securing higher earnings for some by accepting greater income inequality across the workforce as a whole is not, by and large, a good trade-off. If we're going to learn from other countries, it should be high-wage economies that are not characterised by greater inequality than we already have.

Nermal

https://www.boards.ie/discussion/comment/121261420#Comment_121261420

Additionally nearly all US private sector employment is at will. It should be compared with salaries for contract employees here, which closes the gap quite a bit.

maninasia

You keep replying to me, sitting back and criticizing my ideas, but offering no stats of your own. I find that pretty interesting .

In Singapore they pay maids and labourers badly (I don't agree with it but the pay is more than many of the surrounding countries hence popular to go there) but I specifically mentioned professionals who are getting paid by the same multinationals in MID level professional jobs get paid 120,000 now on average. I am very familiar with middle manager pay in Singapore.

When you realize they pay almost no income tax the take home is massive compared to Ireland. The mid level professionals will definitely feel richer in Singapore if they are locals who don't drive (cars are expensive) . WHEREAS if you were on 120,000 USD in Ireland almost half of it is taken in tax!

In Ireland it's the state that is rich...not you.

PS In Ireland we just give 100,000 + refugees and other recently arrived immigrants with children who may immediately declare homeless billions in social welfare and supports. Very few countries do that, instead they would make them work and thus make 'income equality' more obvious.

rock22

@maninasia "PS In Ireland we just give 100,000 + refugees and other recently arrived immigrants with children who may immediately declare homeless billions in social welfare and supports. Very few countries do that, instead they would make them work and thus make 'income equality' more obvious."

We now know the type of country you are arguing for. Selfish totally lacking in empathy for victims or war and disaster, and strongly favouring the rich. Thankfully Ireland, and Europe in general, is far from your idea of utopia.

maninasia

I'm not arguing for anything I'm saying that's what the country is like which therefore changes income inequality statistics and NO the rest of Europe is definitely NOT like that . Check policies in Denmark, Sweden, Poland, Italy, France etc and get back to me . You think asking refugees work for a living like the rest of us is lacking empathy? That's a good one . Fortunately many are eager to work I'll give them that

Get off yer high horse will ya and get busy taking care of the orphans.

Yer such a good person St Peter will be waiting for you at the gates nobody asked for your moralistic bullshit :).

Podge_irl

https://www.boards.ie/discussion/comment/121265747#Comment_121265747

Sonmeone on 120k in Ireland with zero deductions pays about 39% in tax.

maninasia

Correct, almost half of their salary.

Podge_irl

https://www.boards.ie/discussion/comment/121267469#Comment_121267469

39% is absolutely not "almost half" their salary (it is almost 40% of their salary), and that assumes zero pension contribution, no family or any other tax advantageous system.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121261420#Comment_121261420

They also have precarious job security and can be sacked at the drop of the hat.

So a fair percentage of their extra income could be referenced as danger money. :)

In the US, you have to earn big and save big, in the hope you can gather enough money to see you through the future winters. Knowing that at any point in time, your days with the employer could be numbered and if you do get the sack, there aint much of a safety net below you.

I guess you could liken working on a permanent contract in the US to working as a contractor here.

High wage, low security.

maninasia

Sure it is almost half . It's a massive whack of taxes off your gross before you then get slammed by VAT, excise duties, insurance, vehicle tax, carbon tax and standing charges, DIRT , property tax you name it. Are you trying to say it's not much lol.

This is why people don't feel rich, because they aren't rich.

maninasia

There are huge numbers of Irish working on contracts in Ireland and I'm not just talking about IT contractors and construction but different industries including finance , scientific and education. They'll do their best to put you on contract employment. I know many myself, it ain't so different than the US as you think it is in that regard.

Charles Babbage

https://www.boards.ie/discussion/comment/121269480#Comment_121269480

DIRT is invidious when interest rates are below inflation, to be sure. But property taxes are not high Ireland even when compared to the US, while insurance and standing charges are not taxes at all.

As for being rich, GDP is inflated, Irish people are decently well off but not rich. Other countries with similar standards of living have similar taxes.

orangerhyme

I've looked at lots of different metrics comparing Ireland to other European countries in terms of wealth and standard of living etc.

I think in general I'd put us above the eastern European countries and the Mediterranean countries like Spain, Italy, Greece etc, but at the lower end of the northern and Scandinavian countries like Germany, Sweden, Denmark, Holland etc.

These countries have been wealthy for centuries but we're catching up.

I think if we invest in renewable energy and storage like offshore wind, hydrogen etc and also with our good demographics, we can move slightly past some of these countries and stay ahead of the likes of Spain, Poland, Czech and Italy as I think their demographics will inhibit growth.

If you were to look at just one metric I think adjusted household disposable income reflects this.

https://www.reddit.com/r/europe/comments/10sf7wl/gross_disposable_income_of_households_per_capita/

This graph puts us 9th in the EU, which I think is fair. We've high salaries but pay more for everything.

Obviously our GDP is nonsense. Also AIC or GNI aren't an accurate reflection.

We've lots of advantages going into the future such as young population, good education, only english speaking country in the EU, good infrastructure (I know we're lacking in public transport), strong institutions, low corruption, rule of law etc.

We've a huge amount of experience and know-how also in areas such as IT, Pharma, etc.

I think renewable energy would be a brilliant industry to invest in as we could control almost the entire industry without needing outside resources (obviously we'll need to import some resources like steel etc).

m2_browning

https://www.boards.ie/discussion/comment/121270895#Comment_121270895

Not just DIRT irish system is actively hostile to any sort of investment from property to stocks and crypto and don’t even think about ETFs

and then you die and there inheritance…

Charles Babbage

The Irish government should make some effort to reduce the cost of things, then our salaries would give us a decent standard of living. Of course, housing is the obvious one, but that takes time to sort out. But other things are expensive and if we moved closer to the European average then we would be better off.

As for inheritance tax, I'd be more in favour of reducing taxation on the return from risk taking investments than reducing it on money derived from nepotism.

orangerhyme

https://www.boards.ie/discussion/comment/121272230#Comment_121272230

They could tackle insurance costs for a start.

I think energy prices will come down over time.

Charles Babbage

https://www.boards.ie/discussion/comment/121272302#Comment_121272302

They have done something on car insurance. Public liability insurance is a real problem.