A little while ago, I presented a programme on RTÉ called ‘Ireland’s Great Wealth Divide’. The aim of the documentary was to highlight the significant and persistent divide in wealth that exists in Ireland. The reason it is an important issue to highlight is that even when the economy recovers, the benefits will not be evenly – or even remotely evenly – spread and this wealth divide has significant, long-term ramifications for the health of the society.
At the time of screening, there were some people who, like climate change deniers, continued to express the opinion that the wealth divide in Ireland was not a big deal and that it might be overstated.
This is not the case, and in the past few weeks, two other major studies – one by TASC and one by the OECD – have added to the canon of work proving that the divide in wealth in this country is a serious issue and that in the past few years, the divide between the income of those at the very top and those at the bottom has also increased.
This divide is important, because if people get left behind they may give up hope. Having wealth or having even a meagre stake in society changes the way people view themselves and the way they view the future.
For example, consider this one experiment involving a group of poor American families. Some of the parents were given a small savings fund, which was to be set aside for their children’s university fees when the kids grew up.
The kids were then assessed for cognitive reasoning every two years and, by the fourth year, the children whose parents had the small education fund were performing better in all tests than those who hadn’t received the fund. The implication of this is that the parents with this small stake in the future were changing their own behaviour towards their children’s education, such as reading to them, paying more attention to their homework and so on. This is extraordinary, because it reveals what having a stake in society, having something to aim for, does to people. It focuses people and gives them something to believe in.
If people have something small – a savings fund, a bit of wealth, a sense that they matter and that their future is in their hands – they change their behaviour for the better. Now armed with this type of thinking, look at the two almost identical charts. These show how wealth is divided in Ireland. One chart represents the estimates of the international bank Credit Suisse and the other represents the findings of the Household Finance and Consumption Survey. These charts are taken from the recent TASC paper published last week entitled ‘The Distribution of Wealth in Ireland’. I urge you to read it if you have any interest in the future of this society.
If we look at the share of the wealth owned by the top 10pc, top 5pc and top 1pc in Ireland, we see similar evidence produced by both reports. According to the survey carried out by the CSO the top 10pc own 53.8pc of the wealth of this country; the top 5pc own 37pc of the wealth; and the top 1pc own 15pc.
FIGURE 1 HFCS SURVEY
According to Credit Suisse, the concentration at the top is even stronger. Its estimates suggest that the top 10pc own 58.6pc of the wealth; the top 5pc own 46.4pc; and the top 1pc own 27pc. Even taking into account the slight disparity, the concentration of wealth at the very top in both studies is extraordinary on any democratic basis.
FIGURE 2 CREDIT SUISSE SURVEY
Indeed, because the CSO data is from a survey in which it asked people to declare their wealth, there is a very strong possibility that at the very top the very rich decided to understate their wealth, so the very rich might have played down their assets. The difference between the two is the split within the 10pc; not the split between the top 10pc and the rest. In both studies, the top 10pc own over half the wealth of the country.
The interesting aspect of these studies is the sense that Irish people know things aren’t right. We feel that something is not right and every time we are asked we say that we would prefer the society to be fairer. In the programme ‘Ireland’s Great Wealth Divide’ we conducted our own survey, where we asked people what they thought was the gap between the top 20pc and next 20pc and so on, down to the people at the bottom. We asked what you thought the gap was, then what you thought it “ought” to be and then we revealed what it actually was.
The gap between what you thought it was, what you thought it ought to be and what it is in reality is a huge one.
The consensus from a Red C poll of 1,000 people commissioned for the documentary was that Ireland’s richest 20pc had 60pc of the country’s wealth and that the poorest 20pc have 11pc.
The reality? The most affluent 20pc in Ireland actually own 73pc of the country’s wealth and the poorest 20pc own just 0.2pc. As for the top 5pc, their combined wealth is nearly double that of the entire “squeezed middle”.
Now look at the people at the bottom in Ireland in the two charts. While there are slight variations, the overall message is very clear. The charts are broken down into the top 10pc and down to the bottom 10pc.
Don’t just look at the very bottom, who have nothing, but look at the bottom 50pc – they own almost nothing of the country.
These are the facts. This is not opinion. This is Ireland.
As we head into an election year, it’s worth considering just how many people are being left behind, how many are being shut out. Consider how many people wake up with no hope, no stake, no way of seeing how they play a role in our society, no way of seeing a road map to a better future.
That’s what the wealth gap is all about. It is undeniable and it is persistent. Shouldn’t this be the main electoral issue next year in the year that we celebrate the centenary of a Republic that was supposed to cherish all the children equally?
But will it be?
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Hi David,
Seeing as there’s an election coming and you’re worried about the wealth divide. Who would you think would be best suited to bridge the gap? Which parties policies do you think would be best for the entire country and not just the golden elite?
“Climate Change Deniers” Ha ha ha ha hah hahahh hhhhaaa HAAH LMFAO ROFL. Woo Id better get with it. Dont deny what cannot be proven son, go with the consensus. Yep, thats science at its best. I will think for myself thank you. As for the wealth divide, the dogs in the street know its a rigged game and the divide is getting worse. Rich get richer etc. Cliche but true. The answer is to go out and get a piece of the action. Go for it. Dont wait for some poorly dressed muppet in a political party to give… Read more »
Here, Ex Pat, in case you don’t want to look on the last thread I’ve posted my last comment here as well, for your convenience. Ex Pat Northerner More on your last post. ‘You do know that Anthony Watts gets funding from the Heartland Institute and has no formal scientific background.’ Who are Heartland? Why should I care if he got funding from them? Wiki calls it ‘the primary American supporter of climate change denial.’ (There’s that word again.) Wiki is biased of course, but even so what is the problem? AGW denier is funded by AGW denying body. Now,… Read more »
The 400,000 people who left Ireland during the eighties were almost all 30. A similar pattern exists today. Is there any other society that discriminates against young people so much ?
The cost of housing in Dublin has increased 200 times post 1950, has the mean wage ( 1951) increased by a similar multiple from £ 8 per week ?
As grzegorz eloquently put reply to an article last week, it’s not really about wealth in Ireland but how connected into the system you are, who you know. Also the issue of home ownership distorts the wealth distribution in Ireland compared to somewhere like Germany. If you own your house on paper you are a lot wealthier than a middle class German who rents, although the German will have the better lifestyle because of superior infrastructure and state services. The state in Ireland is incapable of providing those services because of the power of the people who work in the… Read more »
I think there’s a nice American phrase which says if you know better you do better and that is the essence of education. Adam Smith pointed out the dangers to any society if it excluded people from a fair opportunity to own property. He was commenting on the slave trade which on a practical level wasted the talents of people and was the most expensive form of labour ever devised by mankind. Adam Smith described how slaves work for subsidence and all profit goes to their masters or owners. They are not incentivized apart from acts of violence to be… Read more »
juniorjb I don’t think Grzegorz was in any way misleading in fact he highlighted the real level and impact of taxation which is often misleading. We pay an effective rate of 52% (without even factoring stealth taxes like USC,VAT,LPT,car tax,water tax and insurance levies) and therefore are required to work like a medieval serf to our feudal lord the Irish State. We may get some benefits in the areas you’ve mentioned but guess who gets the most benefit from public infrastructure (roads, airports, schools,public transport,universities, hospitals etc.)without paying significant taxes? That’s right the corporations. The Swiss get a lot more… Read more »
“like climate change deniers,”
This is gratuitous bullshit. My respect for you diminishes bit by bit. At this rate I see you as a shill for the establishment. Definitely not a free thinker.
The prerato principle is the 80/20 rule. In a free market, 80% of the people will own 20% of the assets and vice versa.
This is stretched to a 90/10 ratio because of the Acton’s of the central bankers.
Hi, The article is articulate concise accurate and useless as tits on a bull. Its like saying in 1944 germany that 4m undesirables have now been gassed and will a change of policy occur? Ans; Not until a paratrooper who has a stake in making sure his realitves aren’t the ones been used for central heating kicks in the door of the cunt in charge and pumps him full of bullets. We now have the largest amounts of homeless famililies living in hotels ever, the largest ever native Irish emigration out of the place ever for the last three years… Read more »
Since the Reagan era, every Western society has been drifting increasingly towards oligarchy. In fact, if the Western society that you are living in, is not becomming increasingly oligarchical, then Washington will be getting increasingly concerned. And those oligarchies are controlling politics. In Ireland, the electorate voted for “change” in 2011. The result was more assets benig allocated to a smaller pool of beneficiaries, with debt write-downs to help out the rich. This is now reaching the point that we are heading towards irreversible moral decline. The Labour Party seems particularly obsessed with controlling the public discourse, and preventing discussion… Read more »
Some people are talking about “draft-dodgers”. And in particular how the draft-dodgers send other young men to fight for patriotism. We have a similar feature here – tax non domiciles. Hoors who like to engage in superficial PR stunts, and press the “green jersey” button. We see it a in a prominent hard sell pop-star who never misses an opportunity to appear as something of an “Irish” Bruce Sprinsteen. But he is a liar. a very wealthy, and highly effective liar. He gets presented to us, as somebody worthy of the deepest respect. The public mores are a lie, when… Read more »
Never the less, government subsidized.
If you want equal opportunity you have to provide a system that allows for it. Having an oligarchy dictating to government does not provide this. The recent trade deals ate secretly signed without debate and allow government to be sued by any cooperation who feels profits have been violated by government regulation. Still the money system as operated by central bankers pumps money directly to commercial banks and then into financial assets. These are mostly owned by the rich. As the stock and bond markets are also held up by government manipulation The rich get richer and the rest left… Read more »
What about Ponzi-scheme economics deniers ?
I would include all the mainstream political parties, all of the media, most stock market investors, most banks, and most government bodies.
Including the clowns in the ESRI (which Richard Tol left because they were being dishonest with the Irish people – let’s face it, the entire state system is dishonest to the people, because it is too busy serving the power centre in Brussels).
you are on a roll, Deco. Keep it up!!!!!!!!!!!!
“The only thing they are doing is deforming and inflating the Wall Street casino. As we have demonstrated so many times, the household credit channel of monetary policy transmission is over and done because we have reached a condition of peak debt.” “And one thing can be said with authority with respect to this soaring pile of junk. Namely, that it was overwhelmingly used for financial engineering in the form of stock buybacks, M&A deals and LBO’s. It thereby help to drive up the price of existing financial assets, not expand the US economy’s productive capacity and efficiency.” David Stockman… Read more »
In no particular order. Draft dodging – Before you criticize an alledged draft dodger ask your self a few questions. Have you every been drafted and if not why not. Do you for example have the luxury of living in a neutral country and thus avoid being drafted as a result. Have you children of draft age, how would you feel if they were drafted? Global Warming – Who the hell knows but there are at least two good reason for being energy efficient, your pocket and your health. Wealth. How do I know if I’m one of the rich… Read more »
Debt If the gold standard returned and “All debt” (What debt will be cancelled) is cancelled what would happened to the €100,000 (I wish) that I have in:- The Bank or The Credit Union or An post 4 year or 10 year government saving thingee or any other An Post savings. Or My Pension and/or soon to be Pension lump sum. or My PRSA or My Shares or Any other financial institution. What I’m asking, maybe specifically to Tony (but not exclusively), should I/We be careful what we wish for. What exactly are you wishing for when you talk about… Read more »
The wealth gap issue is not necessarily a story supported by the appeal to look to the poor and ‘feel’ something for them and towards their situation. I mean it is if you are hoping to take a story of criminality and injustice and seek to reposition the peoples focus by tuning-in to their ‘softer’ feelings of inner compassion. Something like, “look don’t be angry with those who plan and support the poverty, feel compassion and Christmas charity towards the unfortunate underclass. YOU can help them by voting and that is all that needs to happen”. Vote well and it… Read more »
MAINSTREAM MEDIA CHEAT SHEET CLIMATE -> WEATHER CHANGE -> WHAT AN OBAMA DOES CONSENSUS -> WHAT IS REPEATED BY MAINSTREAM MEDIA MAINSTREAM -> THE RICHEST AND MOST MONOPOLISED MEDIA -> TO GIVE “CONSENSUS” BELIEVER -> THE ONE WHO ACCEPTS “CONSENSUS” DENIER -> THE ONE WHO REFUSES “CONSENSUS” CO2 -> A TOXIC GAS THAT KILLS PLANTS PHOTOSYNTHESIS -> AN INCONVIENT TRUTH GLOBAL WARMING -> WARMING ONLY VISIBLE IN COMPUTER MODELS CLIMATE CHANGE -> GLOBAL WARMING (SEE: REBRANDING) CLIMATE CHANGE DENY : -> TO FIND FLAW OR QUESTION “CONSENSUS” -> TO BELIEVE THAT WEATHER CHANGES CONSTANTLY WITHOUT OBAMAS HELP (SEE: YES WE… Read more »
sorry but what is wealth in this context? and how is it not duplicated in this analysis.
if 1 person owns a 500K house? does this mean they have 500K in wealth? What if 80% of this is mortgaged.
These are just some questions I have when presented with these stats.
Alternatively what % own nothing?
“…the poorest 20pc own just 0.2pc…”
Also, What exactly is this 0.2%? is it money in the bank. Or is it tangible goods?
Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me. https://www.binance.com/id/register?ref=PORL8W0Z