"Harney refuses to rule out cuts in minimum wage"

RedPlanet · 22-07-2009 09:37AM

astrofool wrote: »

Reducing minimum wage will be in the hope that more jobs can be created, that we might be competitive in wage terms with the rest of Europe.

But do you honestly believe we'll be able to compete in a race to the bottom with the likes of Poland?
Not a hope.
I question how many "mininum wage" jobs foreign firms actually create here when they setup shop.
Surely those jobs are more likely in the service industry, inwhich tourism is a significant factor.
Isn't this idea of making Ireland an attractive place for foriegn businesses to set-up, dated by now?
This isn't the 80's anymore and things have changed.
I don't think we'll ever be able to compete wage-wise and the cost-of-living with Eastern Europe.
Chipping away at the minimum wage seems petty.

sovtek · 22-07-2009 09:48AM

Shan75 wrote: »

People need to get used to the idea that unskilled workers and the unwaged should not expect a life of luxury.All this does is creates a lack of ambition and hunger for success and self-improvement, and the creation of a sub-class with a highly developed sense of entitlement.

People need to get used to the fact that in America this ideology permeates the political and business class...which pretty much means thats what gets done. Now then you look at the social indicators in America as compared to Western Europe and even Ireland and you'll find its not the way to go.
I've lived here long enough to see that the sense of entitlement largely exists amongst the priviledged classes who are largely underworked, overpaid and highly incompetant...and this aint just the public sector I'm talking about.

oscarBravo · 22-07-2009 09:49AM

RedPlanet wrote: »

I don't think we'll ever be able to compete wage-wise and the cost-of-living with Eastern Europe.

So what do you suggest? That we remain a high-wage, high-cost, uncompetitive economy and hope that every other European country overtakes us in the uncompetitive stakes?

sovtek · 22-07-2009 09:52AM

RedPlanet wrote: »

But do you honestly believe we'll be able to compete in a race to the bottom with the likes of Poland?
Not a hope.
I question how many "mininum wage" jobs foreign firms actually create here when they setup shop.
Surely those jobs are more likely in the service industry, inwhich tourism is a significant factor.
Isn't this idea of making Ireland an attractive place for foriegn businesses to set-up, dated by now?
This isn't the 80's anymore and things have changed.
I don't think we'll ever be able to compete wage-wise and the cost-of-living with Eastern Europe.
Chipping away at the minimum wage seems petty.

FDI is what third world countries use to try and boost their economy. I'm amazed at how many people think it's the way to go in Ireland.

sovtek · 22-07-2009 09:54AM

oscarBravo wrote: »

So what do you suggest? That we remain a high-wage, high-cost, uncompetitive economy and hope that every other European country overtakes us in the uncompetitive stakes?

How about being like other European countries with a higher standard of living and more even distribution of wealth They didn't get there by being whores to foreign multinationals.

astrofool · 22-07-2009 10:05AM

RedPlanet wrote: »

But do you honestly believe we'll be able to compete in a race to the bottom with the likes of Poland?

Poland isn't the problem, the third world isn't the problem.

Our wage levels are higher than almost all first world countries. We have the second highest minimum wage level behind Luxembourg in Europe.

It's not competing with the low low wage earners, but we have to be competitive against say, UK, France, Germany, USA.

techdiver · 22-07-2009 10:08AM

sovtek wrote: »

How about being like other European countries with a higher standard of living and more even distribution of wealth They didn't get there by being whores to foreign multinationals.

Really, you think wealthy European countries like France, Britain and Germany are models or equality in society?? Like it or not full equality in society does not work! Different tasks and professions require different social classes to work them. You can't have a shop steward earning the same as a doctor, it just doesn't work.

Permabear · 22-07-2009 10:11AM

This post has been deleted.

Lockstep · 22-07-2009 10:18AM

techdiver wrote: »

Really, you think wealthy European countries like France, Britain and Germany are models or equality in society??

In my experience, they are a more equal society.

techdiver wrote: »

Like it or not full equality in society does not work! Different tasks and professions require different social classes to work them. You can't have a shop steward earning the same as a doctor, it just doesn't work.

I don't think there's been a single person in this thread who advocated full equality or everyone being paid exactly the same.

Tony EH · 22-07-2009 10:22AM

lmtduffy wrote: »

Quote: Originally Posted by Shan75 "The same becomes true in leaner times if the social welfare rate is too high as people think "why would I bother getting off my áss to earn the same amount as I'm getting on the dole".It is imperative we encourage people to achieve their potential and to take pride in working for a living."

there are more constructive ways to encourage people to take up work than cutting the dole but we have elected a very lazy government.

Hmmmm...assuming that there are actually work to "take up". The biggest problem now facing the near 1/2 million unemployed in this Country is the severe lack of jobs available.

lmtduffy wrote: »

Quote: Originally Posted by Shan75 "People on social welfare need to be looked after both in the short term and long term and part of that is seeing they are receiving enough to ensure they have a basic standard of living while not being an unecessary burden on an economy in crisis.Lowering the payments in line with deflation is part of this as is encouraging people to train in new skills, go back to school etc.Once this has been done we need to do the same for the people on minimum wage so as not to allow it to become attractive to do a job that is below your skillset and ability.People need something to strive for and easy money is one way of making sure this will not happen."

yes but a lack of money will also ensure that this cannot happen.
People have families to take care of and bills to pay, and making money scarcer will not help them work around these responsibilities or make other options more appealing to them.
Even if you lower minimum wage or social welfare, many things in the market arent aimed at them and there pricing will reflect this.
They already have a lower purchasing power than those earning more and are a lot less able to cut back on spending or be inventive with there budgets hence are more vulnerable than their wealthier counterparts.

Agreed. I find a statement such as this..."Lowering the payments in line with deflation is part of this as is encouraging people to train in new skills, go back to school etc" an unbelievably silly point. With the household expenditures that naturally soak up dole money or low wages, the "choice" to "go back to school", or to " retrain" become very limited. Furthermore, decreasing the minimum wage or social welfare would further decrease those oportunities.

If it comes down to paying for a training course, or paying the mortgage, it's not hard to understand what will come first.

techdiver · 22-07-2009 10:30AM

kickoutthejams wrote: »

In my experience, they are a more equal society.

I would disagree, there is for example a massive underclass of disenfranchised in France. Social unrest is quite high due to this. You will see these socially deprived areas on the outskirts of Paris. Even in socially deprived areas of Ireland there is massive regeneration ongoing (Southhill, Limerick and Ballymun, etc), plus our welfare rates are very generous, how does this equate to unequal?

sovtek · 22-07-2009 10:37AM

astrofool wrote: »

Poland isn't the problem, the third world isn't the problem.

Our wage levels are higher than almost all first world countries. We have the second highest minimum wage level behind Luxembourg in Europe.

It's not competing with the low low wage earners, but we have to be competitive against say, UK, France, Germany, USA.

The rate of pay is almost irrelavant to compare to other countries. You have to look at the real wage to actually compare like with like as well as the buying power of that wage.
Also to say that wage levels are higher in Ireland than the rest of the first world just doesn't ring true to me. I left a job in IT in America in 2000 for a job in Ireland at the same level of pay although the job in Ireland was a higher position. I then met someone a few years back who was at the same skill level I left in America although he was making more than I was. Thats with the cost of living being well below what Ireland.

sovtek · 22-07-2009 10:41AM

techdiver wrote: »

I would disagree, there is for example a massive underclass of disenfranchised in France. Social unrest is quite high due to this. You will see these socially deprived areas on the outskirts of Paris. Even in socially deprived areas of Ireland there is massive regeneration ongoing (Southhill, Limerick and Ballymun, etc), plus our welfare rates are very generous, how does this equate to unequal?

Again you have to compare real wages and buying power not just the exact € rate of pay.
I have no doubt there is more unrest in Paris than in Dublin. The French protest at the drop of a hat...God luv em.
It's a fact that there is a better standard of living in France and a smaller gap between rich and poor. Ireland has one of the largest gaps in the Eurozone.

astrofool · 22-07-2009 10:49AM

How about you do some research on the cost of doing business in different countries and then come back to the thread (doesn't ring true doesn't cut it).

We've had a wage spiral in this country because we're paying each other far too much, when everybody gets a 5% pay rise, no one gets a pay rise. Usually we could devalue our way out of it (UK) but being part of the euro, we can't, we thus have to reduce our cost base, this involves reducing all our costs, and will allow us to be competitive again with other first world countries.

I also have to laugh out loud at "The rate of pay is almost irrelavant to compare to other countries". Businesses exist to create money (wealth), the rate of pay is a large proportion of those costs, of course it is relevant. Just because we have let our costs spiral out of control, pushing up the cost of living, does not make the rate of pay irrelevant, in fact, it is more relevant now than ever, as the cost is coming down, reducing the minimum wage, social welfare, private sector wages (~10% down already?), public sector wages (6% down?) will reduce costs across the board and make us competitive again.

Again, wages are what drive costs. The cost of an employee to create and sell a product drives the cost of that product.

astrofool · 22-07-2009 10:50AM

sovtek wrote: »

Again you have to compare real wages and buying power not just the exact € rate of pay.
I have no doubt there is more unrest in Paris than in Dublin. The French protest at the drop of a hat...God luv em.
It's a fact that there is a better standard of living in France and a smaller gap between rich and poor. Ireland has one of the largest gaps in the Eurozone.

Thats because the rich have been leaving France in their droves and live elsewhere (Brussels, Monaco). They had a net loss in tax revenue when they increased their higher rates of tax.

Lockstep · 22-07-2009 10:53AM

techdiver wrote: »

I would disagree, there is for example a massive underclass of disenfranchised in France. Social unrest is quite high due to this. You will see these socially deprived areas on the outskirts of Paris. Even in socially deprived areas of Ireland there is massive regeneration ongoing (Southhill, Limerick and Ballymun, etc)

In turn, I would also disagree; French cities tend to be much larger than ours, the only really comparable city we would have is Dublin. In the megacities like Paris I would agree; this is what you get in such massive cities. There is also the regeneration you would see in Ireland.
I lived in one of the immigrant districts in Strasbourg for a few months where it was entirely different. Nothing like the Parisian banlieus.

techdiver wrote: »

plus our welfare rates are very generous, how does this equate to unequal?

Using France as an example;
http://www.tribune.ie/article/2009/apr/05/states-of-grace-dole-payments-around-the-world/

P. Breathnach · 22-07-2009 10:55AM

techdiver wrote: »

I would disagree, there is for example a massive underclass of disenfranchised in France. Social unrest is quite high due to this. You will see these socially deprived areas on the outskirts of Paris. Even in socially deprived areas of Ireland there is massive regeneration ongoing (Southhill, Limerick and Ballymun, etc), plus our welfare rates are very generous, how does this equate to unequal?

I hate to spoil a good argument. Rather than using anecdote and reliance on personal experience, why not use data? Ireland has more inequality than France. See http://lysander.sourceoecd.org/pdf/factbook2009/302009011e-12-01-01.pdf

RedPlanet · 22-07-2009 11:05AM

astrofool wrote: »

Thats because the rich have been leaving France in their droves and live elsewhere (Brussels, Monaco). They had a net loss in tax revenue when they increased their higher rates of tax.

But wouldn't that mean that all the jobs those nice rich folks create would vanish with them?

P. Breathnach · 22-07-2009 11:09AM

astrofool wrote: »

Thats because the rich have been leaving France in their droves and live elsewhere (Brussels, Monaco). They had a net loss in tax revenue when they increased their higher rates of tax.

And, of course, Ireland has no tax exiles.

Lockstep · 22-07-2009 11:12AM

astrofool wrote: »

Thats because the rich have been leaving France in their droves and live elsewhere (Brussels, Monaco). They had a net loss in tax revenue when they increased their higher rates of tax.

Brussels has heavy taxes too. (up to 50% IIRC)
In addition, if you are a foreigner then you have to pay additional taxes (if you want to buy a house for example.)

astrofool · 22-07-2009 11:38AM

It's 45 minutes on the TGV from brussels to Paris, so luckily for France, most of the jobs remained in the country (even though their tax revenue take went down, putting more of a burden on lower earners).

Ireland would not be so fortunate.

astrofool · 22-07-2009 11:39AM

P. Breathnach wrote: »

And, of course, Ireland has no tax exiles.

No, we have some, same as any country in the world, your point being? You want more? We want to chain people to the country?

astrofool · 22-07-2009 11:51AM

P. Breathnach wrote: »

I hate to spoil a good argument. Rather than using anecdote and reliance on personal experience, why not use data? Ireland has more inequality than France. See http://lysander.sourceoecd.org/pdf/factbook2009/302009011e-12-01-01.pdf

That data is also at least 9 years old for Ireland

"to around 2000 for Austria,
Belgium, the Czech Republic, Ireland, Portugal and Spain
(where 2005 data, based on EU-SILC, are not deemed to be
comparable with those for earlier years)"

I fail to see how it can be used for an argument 9 years later and in the current economic climate.

Incidentally, we became a more equal society between the mid 1980's and 2000.

"Declines occurred in France,
Greece, and Turkey, as well as Ireland and Spain (where
trend data are limited to 2000). Income inequality
generally rose faster from the mid-1980s to the mid-1990s
than in the following decade."

So, from the 80's, where we had punitive tax rates, to 2000, where we managed to lower the tax rates significantly, we had increased equality.

This was also before our housing bubble, and before we started drastically increasing social welfare and raising the minimum wage to their current unsustainable levels (on the back of a VRT and stamp duty splurge).

This doesn't support your position at all does it?

djpbarry · 22-07-2009 12:00PM

RedPlanet wrote: »

But do you honestly believe we'll be able to compete in a race to the bottom with the likes of Poland?

This statement (in bold) is being thrown around so much at the moment it’s lost all meaning.

P. Breathnach · 22-07-2009 12:03PM

astrofool wrote: »

No, we have some, same as any country in the world, your point being? You want more? We want to chain people to the country?

It is disingenuous to point to French tax exiles as making a difference, while ignoring the fact that there are plenty of Irish tax exiles.

astrofool · 22-07-2009 12:14PM

But there are more french tax exiles due to their punitive tax for high earners, causing a net decrease in the amount of tax taken by the government.

Are you saying Ireland should follow this route? Or are you saying that the high earners will stay in Ireland, paying punitive rates of tax, rather than leave the country?

What exactly is your point here?

P. Breathnach · 22-07-2009 12:31PM

astrofool wrote: »

That data is also at least 9 years old for Ireland

"to around 2000 for Austria,
Belgium, the Czech Republic, Ireland, Portugal and Spain
(where 2005 data, based on EU-SILC, are not deemed to be
comparable with those for earlier years)"

I fail to see how it can be used for an argument 9 years later and in the current economic climate.

Incidentally, we became a more equal society between the mid 1980's and 2000.

"Declines occurred in France,
Greece, and Turkey, as well as Ireland and Spain (where
trend data are limited to 2000). Income inequality
generally rose faster from the mid-1980s to the mid-1990s
than in the following decade."

So, from the 80's, where we had punitive tax rates, to 2000, where we managed to lower the tax rates significantly, we had increased equality.

This was also before our housing bubble, and before we started drastically increasing social welfare and raising the minimum wage to their current unsustainable levels (on the back of a VRT and stamp duty splurge).

This doesn't support your position at all does it?

For reasons unconnected with this thread, I have been looking for data on inequality in Ireland. It is proving surprisingly difficult to find anything very recent. If you read with a little more care, you might find that the Gini coefficient for Ireland was based on 2004 incomes.

Incidentally, inequality in France declined at about the same rate as that in Ireland.

It might be argued that 2004 is a better indicator of the fundamental relationships in Ireland than is any more recent year, because bubbles distort things greatly, both when they are growing and again when they burst.

I would be pleased if anybody could dig up recent quantitative data. I really don't have much regard for subjective contrasts of Sartrouville and Ballymun as evidence.

P. Breathnach · 22-07-2009 12:33PM

astrofool wrote: »

But there are more french tax exiles due to their punitive tax for high earners, causing a net decrease in the amount of tax taken by the government...

Evidence, please.

the_syco · 22-07-2009 12:35PM

FlutterinBantam wrote: »

When you see the local part time barman driving a mid range beemer you suspect there is something wrong.

Although in some cases it is, more often than not, the part-time barman/bouncer job supplemented a full time job, abeilt the PT job was cash in hand.

astrofool wrote: »

The people working these jobs would likely not have a job otherwise, that would be raising, rather than lowering, their quality of life. Especially if social welfare takes a similar or greater cut.

I dislike it, but I agree that what you said is vaild.

RedPlanet wrote: »

This isn't the 80's anymore and things have changed.

Aye. People have gotten used to doing f**k all, and getting paid well for it. Pity they're now unemployed, and may look down their nose at a job paying less what they got before they got let go.

Shan75 · 22-07-2009 12:38PM

Tony EH wrote: »

Agreed. I find a statement such as this..."Lowering the payments in line with deflation is part of this as is encouraging people to train in new skills, go back to school etc" an unbelievably silly point. With the household expenditures that naturally soak up dole money or low wages, the "choice" to "go back to school", or to " retrain" become very limited. Furthermore, decreasing the minimum wage or social welfare would further decrease those oportunities.

If it comes down to paying for a training course, or paying the mortgage, it's not hard to understand what will come first.

Lowering social welfare payments in line with deflation is necessary because we are borrowing heavily to fund the social welfare bill.We simply cannot do this indefinitely.Prices of basic goods and services are dropping all the time and if we maintain social welfare at current rates it is effectively giving the unemployed a raise while everybody else still working is seeing a reduction in their take home pay through increased taxation and salary reductions.Lowering the minimum wage is necessary as we have allowed our costs of production to soar which has partly fueled the price explosion.

I know quite a number of people who have lost their jobs recently and are going back to college.I know others who have been out of work for up to a year now without a sniff of a job opportunity.It is better that people are going back to school than just moping around or looking for jobs that are not there.I don't blame these people as in a lot of cases their circumstances wouldn't allow them to go to college and there are little or no training courses available at the minute.

The state need to be funding the training courses.In other words investing in the future rather than throwing money into a black hole.We should only provide financial benefits up to covering the basics people need to live on.It is everybody's responsibility to ensure they don't waste any of the money they receive on unnecessary goods.I understand there is an EU fund available to help set up training initiatives and we need to avail of everything we can get our hands on.

If nothing else giving people something to do, something to aim for and a purpose is better than having people becoming more and more disillusioned with each passing day they spend on the dole.There is quite simply nothing as soul destroying for naturally productive people than wandering up to sign on every month and collecting dole payments.

The Government need to be giving leadership on these matters but they don't seem to have an idea of what we can do to both help people in the short term and plan for the future.

"Harney refuses to rule out cuts in minimum wage"

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