Pandemic exposes income inequalities in Irish society

The scale of the unemployment crisis brought on by the Covid-19 pandemic dwarfs even the Great Recession and financial collapse that shattered Ireland from 2008 on.

In February of this year almost one quarter of the workforce was out of work. And despite the radical and once unthinkable scale of supports adopted by Government in the early months of 2020, the post Covid-19 landscape is likely to be harsh and prolonged, and will undoubtedly impact some worse than others.

In this article we explore some of the glaring inequalities evident in the Irish labour market spotlighted by Covid-19. The article was written by an inter-disciplinary group of researchers from the Whitaker Institute at NUI Galway, all of whom are actively involved in researching work, organisations and/or society in Ireland.

It has been claimed that Covid-19 is a great leveller. We beg to differ. “Ireland has historically been a high inequality country”, based on a predominantly market-oriented state ideology, employer-focused institutions, and low levels of trade union membership and collective bargaining (TASC Report, June 2020). https://www.tasc.ie/assets/files/pdf/policy_brief_recovery_ireland_final_2306.pdf

Systemic inequality leads to poor outcomes such as social and industrial unrest, crime, and physical and mental ill-health. For Ireland’s workers, the changes brought by the pandemic are in danger of heightening, rather than erasing, a long-standing set of inequalities.

Inequality is socially constructed relative concept, rather than absolute concept. It is culturally and historically determined and is endemic in social structures and institutions. Social Identity Theory suggests that humans resort to “us and them” categories to make sense of social complexity. The Similarity Attraction Paradigm suggests that “people-like-people-like-themselves”.
Human difference, based on factors such as class, gender, age, race and religion leads to unequal distribution of economic assets and variability in quality of life. Unequal power distribution leads to unequal access to resources – money, housing, healthcare, voice, connections, education – which leads to unequal outcomes.

The Irish government has, in the past, failed to place the wellbeing of people at the centre of the economy. One reason for this has been its central focus on GDP and the mantra of economic growth, which does not reflect welfare or capture negative effects such as climate change or inequality.
This approach has narrowed the focus, preventing the economy and the country from preparing for exogenous and existential threats, like future pandemics or climate change, and ensuring that basic needs for nutrition, shelter, social participation, security, education and healthcare are met for all. This has left us exposed. Unless there is a change in thinking, this focus on economic growth at all costs, and the prioritization of business needs above social ones, will continue to lead to various types of “home-grown” inequality, Irish-style.

Ireland has the highest wage inequality in Europe – the biggest gap between the highest and lowest earners. We don’t have extreme levels of poverty because the state picks up the tab through our unique system of redistributing wealth.

Tax and other state income are used to support the lowest paid workers, through social welfare, state pensions, housing and other supports. This situation helps prop up firms in low wage sectors, like agriculture and hospitality.

Employers can pay very low wages, and no worker falls into “extreme” poverty. Companies can enjoy a flexible workforce in which low pay is normalised, a situation described as “corporate welfare” (Dawkins, 2002).
But this set-up has problems. First it undermines a sense of egalitarianism. How are we “all in this together” if the average pay of Ireland’s top CEO is €2.3 million while the median worker wage is €27,000 per year?

Our system of redistribution also means very little money is left over to invest in basic services. Health, transport, housing – these are all really expensive in Ireland. This keeps the cost of living high, and individual capacity to save and live a decent life very low – unless you are lucky enough to be one of the few high earners. This was the case long before Covid-19 arrived.

A further inequality stems from reproductive labour and women’s continuing role as primary family caregivers. Although women’s participation in the Irish labour market has greatly increased in recent decades, CSO data show that many women drop out of the labour market when they have young children. https://www.cso.ie/en/releasesandpublications/ep/p-wamii/womenandmeninireland2016/employment/ This is not necessarily due to personal choice – notwithstanding some recent progress, fathers in Ireland generally have minimal paid leave entitlements for childcare purposes.

The end result is that women earn significantly less than men, have fewer pension entitlements, are more likely to be engaged in precarious or part-time employment, and are less likely to progress in their careers. These disadvantages are compounded for women from certain groups, such as women with disabilities and black women.

The lack of external childcare provision during the pandemic, and particularly the gender divide in supporting home schooling, has highlighted the unequal social and economic impact of caring roles. Recent research points to stark differences in the pressures felt by Irish men and women in balancing home and work life during the pandemic; one in every 10 women surveyed left her job because of these difficulties. https://www.irishexaminer.com/news/arid-40257536.html

Ireland is also not immune to the global increase in precarious employment, which prompted Guy Standing to posit the emergence of a “precarious class” https://www.bloomsbury.com/uk/the-precariat-9781849664561/.

Those in precarious employment or the gig economy in Ireland – in seasonal work, (some) part-time, temporary or zero hours contracts, some “self-employed” workers – typically have poor working conditions including low pay, no paid leave, little/no job security, and are typically non-unionised.

Many precarious workers are concentrated in the services sector, including accommodation and hospitality, where young people, women, migrants and older workers are often over-represented. For such workers, the ever-present risk of unemployment means an inability to consistently afford the basics needed for survival, including food and rent, or to qualify for a mortgage or contribute to a pension. This limits their ability to participate equally in society and increases the likelihood of housing precarity and poverty in older age.

Covid-19 highlights inconsistencies in the way in which older workers are treated. They have been strongly encouraged by the government to extend their working lives with the increase in state pension age, yet those aged over 66 who were working, were not entitled to the Pandemic Unemployment Payment.

Of course, from the perspective of people’s incomes, many experts and politicians assert that Ireland is in fact an equal society, both before and after Covid-19. After all, we are in the middle of European countries in the rankings measuring income equality after redistribution (we are unequal before the social transfers and in the middle after them). But this is based on our strange system of high inequality followed by large-scale redistribution through payments. This creates issues including the perceived stigma of asking for a “handout” via social welfare – instead, why not simply pay people an adequate wage?

Related problems include a lack of solidarity between people who are paid very high and very low – because of income discrepancy. This system actually exacerbates inequality because it reduces social mobility: people struggle to move out of a situation of working poverty and are effectively trapped (TASC Report, June 2020).

This article set out to explore some of the glaring inequalities evident in the Irish labour market spotlighted by Covid-19. A final, and perhaps most important, point needs to be raised regarding the global inequality, within and beyond the labour market, in access to C19 vaccination. Unlike other inequalities where the “haves” gain, at the expense of the “have-nots”, we are in danger of scoring a catastrophic “own goal” here.
“The COVID-19 pandemic has been a stark and painful reminder that nobody is safe until everyone is safe,” according to experts at the WHO calling for a global treaty for “pandemic preparedness and response”. https://www.who.int/news-room/commentaries/detail/op-ed—covid-19-shows-why-united-action-is-needed-for-more-robust-international-health-architecture
We cannot leave this responsibility to states and to governments. We have an individual and collective responsibility to act now.

NUI Galway recent launched the Global Galway Project, with a vision to create a university community where “everyone has a sense of belonging. Where we welcome the world in and go out into the world. Where we nurture global citizens. Where everyone has a place to thrive.” The initiative builds on, and contributes to, the university values of Respect, Openness, Sustainability and Excellence. http://www.nuigalway.ie/global-galway-project/ Our University community is made up of students and staff from 122 countries. Let’s show our community spirit by acting on behalf of those deprived of access to vaccination.

The inequalities we describe persisted before the outbreak of Covid-19, but the pandemic has exacerbated them in ways that could not have been foreseen. We are now starting to witness the impacts.

The current public health crisis has demonstrated that orchestrating a coordinated response to alleviating inequality is possible where political will exists. We have also seen that radical action is not only possible, but socially desirable, when people are presented with robust scientific evidence.

There has never been a better time to capitalise on the public demand for change. We believe that levels of inequality can be maintained, increased, resisted, or transformed.

Covid-19 presents us all with an opportunity to consider which course we choose. We need a national conversation around what we need to live well together, how we can reduce the consumption of wasteful or destructive goods and services, and how we can ensure a just transition for workers and businesses currently tied up in these activities.