How you see Ireland’s economic prospects may depend on whether your glass is half full or half empty in the post-Paddy’s day haze. There’s plenty to be bullish about, but warning signs have begun to flash in recent months as we brace for Brexit and a global slowdown.
First, the good news:
In many ways, the Irish economy looks to be in ‘goldilocks’ territory: not too cold, but still not too hot. Moreover, the number of people outside the labour force that could look for work again in the right conditions is still over 100,000, suggesting it still has room to run if factors beyond our control don’t get in the way.
*** This article was first published on thejournal.ie on 24 March 2019 *** Continue reading
Writing this time last year, I expected our economic fortunes to get better before they got worse. I saw clouds gathering on the distant horizon, but no major storms forecast for 2018.
*** This article was first published on thejournal.ie on 28 December 2018 ***
Ireland isn’t quite partying like it’s 2006, but the stats don’t lie – 2018 has been a bumper year by most measures.
The economy generated nearly 1,300 extra jobs per week in the 12 monthsto end-September, up from less than 950 per week the previous year. Even if the pace of job growth slowed after the middle of 2018, this is still impressive progress by any measure, and enough to see the unemployment rate fall to 5.3% in November, down from 6.4% the previous year.
Although this is close to what economists call ‘full employment’, it should be remembered that the share of the working age population making themselves available for work is still (62.6%) significantly lower than its 2007 peak (67.4%). This flatters the unemployment rate and suggests there are still some 300,000 people that could be enticed back to the workforce.
Growth in average hourly earningshas picked up, from 2.1% a year ago to 3.2% now, more than double the growth rate from two years ago. The minimum wage will increase by 2.6% from New Year’s Day, from €9.55 an hour to €9.80.
Only part of the increase in people’s pay packets is being eaten up by higher prices. Consumer prices are basically flat, edging up only slightly from 0.5% in November 2017, to 0.6% in the same month this year. This average hides important differences: the cost of housing, water, gas and electricity increased more than 5% on the year while the price of furniture and household equipment fell by more than -4%.
This means real hourly wages are increasing in every sector with the exception of public administration, which clocked up only a 0.8% gain in the year to end-September.
With more people at work earning higher wages, it is hardly surprising that we are spending more. Ireland’s GDP figures are heavily distorted by multinational activity, but the most unpolluted – and least volatile – component is private consumption which grew by 2.9% in the third quarter of the year compared to a year earlier.
THIS WAS SUPPOSED to be the ‘Housing Budget’.
A series of government plans, strategies and false starts have so far failed to stem the surge in rents, reverse the relentless rise in homelessness or put homeownership back within the means of low-to-middle income families.
A decade since the property bubble burst and homeless figures began their long march to 10,000, this was flagged as the moment when the Minister for Finance would do what Ministers of Finance do to tackle a social crisis when there’s an election on the horizon – throw money at the problem.
So, let’s take a deep dive into the good, the bad and the ugly of the housing measures in Budget 2019.
*** This article was first published on thejournal.ie on 10 October 2018 ***
NOBODY LIKES TO get a call from the boss when they’re still in bed.
Exactly ten years ago, in the early hours of 30th September 2008, I got such a call: one I’ll never forget.
From January 2008 to the general election of February 2011, I was, among other things, economic advisor to Joan Burton TD, then opposition Finance Spokesperson for the Labour Party.
As such, I had a front-row seat to the political theatre and economic tragedy of Ireland’s unfolding banking crisis.
*** This article was first published on thejournal.ie on 30 September 2018 ***
You can’t be ‘a little bit pregnant’, as the saying goes, but you can be ‘a little bit equal’.
In February, we marked the centenary of women getting the vote in Ireland and the UK. Later this year, we will celebrate the 100-year anniversary of the 1918 general election. This was a momentous occasion not only because it marked a seismic shift on our path to independence. Sinn Féin’s Countess Markievicz became the first woman elected to the House of Commons.
But, all else was not equal. All men over 21 were entitled to vote, but women had to wait until they were 30. Combined with property ownership requirements, this meant that less than half the women across Ireland and the UK could actually vote.
*** This article was first published on thejournal.ie on 18 April, 2018 ***
But, things are surely getting better? Continue reading
LIKE A SUNNY spell sandwiched between snowstorms, the number crunchers at our Central Statistics Office published their own blizzard of economic data recently.
The headline numbers are nearly too good to be true: at 7.8%, GDP growth last year was comfortably the highest in Europe, and ahead even of India, which has leap-frogged China as the fastest-growing big economy in recent years.
Strong growth helped generate nearly 1,300 new jobs per week during 2017. This meant that by the end of the year the total number of people in work was within touching distance of the two-and-a-quarter million peak hit in late-2007. Cue cries that the lost decade is over. These are neither lies, nor damned lies: just statistics.
*** This article was first published on thejournal.ie on 26 March, 2018 ***
PEOPLE LIKE TO have something to look forward to. That’s why, even in the dark days of December, people look forward to ringing in the New Year, full of new possibilities.
They may call economics the ‘dismal science’, but even economists are not immune to looking for silver linings among the winter clouds. So, what’s in store for the Irish economy in 2018, I hear you ask?
*** This article was first published on thejournal.ie on 22 December, 2017 ***
Since time immemorial, young people have grown up in the anticipation that they will live a life at least as comfortable as that of their parents – that the next generation will reap the benefits of social, economic and technological progress. This is at the foundation of the social contract between generations, not just in Ireland, but across Europe and around the world.
But, something has changed.
Next generation can expect to work harder for less.
Generation Y, the so-called millennials, born since 1980, may be the first generation for whom this dream turns out to be a mirage. Long-term demographic trends, coupled with the long-term slowdown in productivity growth in developed countries, mean that the social escalator of yesteryear has broken down.
But, the real tipping point came with, and since, the 2008 financial crisis. Youth unemployment soared across Europe. In Ireland, mass emigration made a comeback as many who graduated from school or college – or lost their jobs in construction-related trades – saw few prospects at home.
Rather than helping, public policy often makes things worse.
*** This article was first published on thejournal.ie on 30 September, 2017 ***
Watching Ireland’s housing crisis unfold has been like watching a slow-motion car crash.
Surging numbers of rough sleepers around our cities were an early sign, shortly after the economic crisis struck. As job losses mounted, and wage cuts began to bite, more and more people struggled to pay their mortgage and keep a roof over their family’s heads.
Meanwhile, the shutdown in house-building was storing up problems for the future. Chronic shortages in housing supply have sent rents surpass their boom-time peaks, while house prices have increased by half since they bottomed out four years ago. Record numbers of families are forced to stay in hotels or in emergency accommodation. Some have had to resort to sleeping in their cars or putting themselves at the mercy of the local Garda station.
*** This article was first published on thejournal.ie on 29 June, 2017 ***
Venezuela is in crisis, sliding further towards collapse.
Opposition protests sparked by attempts by the Supreme Court, stacked with loyalists to President Nicolás Maduro, to usurp the legislative powers of Congress have already seen dozens killed.
Perhaps inconveniently for the government, the President’s United Socialist Party of Venezuela (PSUV) had lost their Congressional majority in the 2015 elections for the first time since Hugo Chávez was swept into power by a democratic landslide in 1999. Shortly after Chávez’ first became President, he set about re-writing Venezuela’s constitution, giving more powers to the Presidency and laying the foundations for his Bolivarian revolution – Socialism for the 21st Century, as he called it.
This piece of history is important, given that President Maduro last week pledged to reconvene another constituent assembly to re-write the constitution once again. This is seen by many as a thinly-veiled attempt to delay the regional elections scheduled later this year, and the Presidential election scheduled for 2018.
*** This article was first published on thejournal.ie on 12 May, 2017 ***