Recovery for the few - an explaination

Disillusioned democrat

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Perhaps I was being too hard on FG because it seems like our "recovery" is following a global trend of all increases in productivity being hoovered up by hyper-inflation on rent.

This article explains it well - particularly in an Irish context.

https://www.irishtimes.com/opinion/david-mcwilliams-why-ireland-s-growing-economy-isn-t-making-you-richer-1.3327231?__vfz=c_pages=5923100000648

Cue the FG shills attacking David McWilliams, but this article rings true to many.

If this is indeed a global trend then surely it's one governments - who should be representing the best interests of the majority of their citizens - should be working tirelessly to reverse as opposed to greasing the cogs like our beloved leaders.
 


SamsonS

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Perhaps I was being too hard on FG because it seems like our "recovery" is following a global trend of all increases in productivity being hoovered up by hyper-inflation on rent.

This article explains it well - particularly in an Irish context.

https://www.irishtimes.com/opinion/david-mcwilliams-why-ireland-s-growing-economy-isn-t-making-you-richer-1.3327231?__vfz=c_pages=5923100000648

Cue the FG shills attacking David McWilliams, but this article rings true to many.

If this is indeed a global trend then surely it's one governments - who should be representing the best interests of the majority of their citizens - should be working tirelessly to reverse as opposed to greasing the cogs like our beloved leaders.
My main issue with his argument is in the first sentence.

"....oddest things happening in the Irish economy is that unemployment is falling quickly but income-tax receipts are not rising in tandem. The Government is confused. When employment rises so should income tax. So why isn’t this happening"

That is not true. So far in 2017 income tax is 18.3b , 738m up in year on year terms when compared with first 11 months of 2016.
Income tax for 2016-2103
19.169b, 18.359b, 17.045b, 15.758b.
This is also in the period when the gov have reduced some rates.

So unless his tax argument is based on the fact that our income tax in 2017 is 1.4% below the target set, then that point is wrong.

In fairness, his substantive point re wages over the longer term, and rewards for capital rather than labour, is correct. I think we can trace that back to Ronald Reagan.
 

hammer

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And the Finance Dept have already come out and said the way the calculated expected growth in USC receipts for 2017 was wrong and it has affected the supposed "under performance" in tax receipts.

I would have expected McKnowall to be a move avid reader.
 

Mushroom

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Perhaps I was being too hard on FG because it seems like our "recovery" is following a global trend of all increases in productivity being hoovered up by hyper-inflation on rent.

This article explains it well - particularly in an Irish context.

https://www.irishtimes.com/opinion/david-mcwilliams-why-ireland-s-growing-economy-isn-t-making-you-richer-1.3327231?__vfz=c_pages=5923100000648

Cue the FG shills attacking David McWilliams, but this article rings true to many.

If this is indeed a global trend then surely it's one governments - who should be representing the best interests of the majority of their citizens - should be working tirelessly to reverse as opposed to greasing the cogs like our beloved leaders.

I assume that you're espousing our government nuking China?

Or paying the likes of Bus Eireann, Irish Rail, Luas and Dublin Bus wurkers more money, simply because the Chinese can't come in and drive our public transport fleet?
 

robut

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BTW .. the same trick as with FT applies to read beyond the paywall.

Copy the headline:

David McWilliams: Why Ireland's growing economy isn’t making you richer

All of it, into google search. Then click the first link that comes up to the article.
 

gleeful

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Ultimately all of this is down to a vast increase in the global labour supply. Billions of workers have been added to the world econony - mainly from China and India. Its a process started in the 90s and will continue for another 10 to 15 years.

After that, new worker supply will dry up and new demand from all these new consumers will pick up too.

And thats why corporate America is investing in robots - they see the gradual end of cheap human labour supply increases.
 

hammer

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Since 2011 there has been a recovery for most.

I would have to disagree with the "recovery for a few"
 

HarshBuzz

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My main issue with his argument is in the first sentence.

"....oddest things happening in the Irish economy is that unemployment is falling quickly but income-tax receipts are not rising in tandem. The Government is confused. When employment rises so should income tax. So why isn’t this happening"

That is not true. So far in 2017 income tax is 18.3b , 738m up in year on year terms when compared with first 11 months of 2016.
Income tax for 2016-2103
19.169b, 18.359b, 17.045b, 15.758b.
This is also in the period when the gov have reduced some rates.

So unless his tax argument is based on the fact that our income tax in 2017 is 1.4% below the target set, then that point is wrong.

In fairness, his substantive point re wages over the longer term, and rewards for capital rather than labour, is correct. I think we can trace that back to Ronald Reagan.
Oooooof. McWilliams talking polemical ************************e.

Seems to be his shtick these days. Don't be surprised to see him join FF.
 

bokuden

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Since 2011 there has been a recovery for most.

I would have to disagree with the "recovery for a few"
Of course you would. Homelessness STILL rising thanks to the policicies you so heroically defend. And inflation still not rising despite approaching zero unemployemtn? Low paid work. Ye have creadted an indebted class of working poor who van barely afford to keep a roof over their head. Merry Christmas from Fine Gael!
 

bokuden

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Ultimately all of this is down to a vast increase in the global labour supply. Billions of workers have been added to the world econony - mainly from China and India. Its a process started in the 90s and will continue for another 10 to 15 years.

After that, new worker supply will dry up and new demand from all these new consumers will pick up too.

And thats why corporate America is investing in robots - they see the gradual end of cheap human labour supply increases.
"The Poor exist for the comfort of the rich" - Voltaire.

Replace "poor" with "unpropertied" and "rich" with "landed" and you have the Irish/FG spin on this in a nutshell, but the OP is correct; it's a worldwide problem and it will probably end in massive social revolution/upheaval.
 

gleeful

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Of course you would. Homelessness STILL rising thanks to the policicies you so heroically defend. And inflation still not rising despite approaching zero unemployemtn? Low paid work. Ye have creadted an indebted class of working poor who van barely afford to keep a roof over their head. Merry Christmas from Fine Gael!
Homelessness is primarily an issue of housing supply - made worse by the massive number of new jobs created and so increased demand. Building is slow to start but will catch up.
 

hammer

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So I am right with the recovery for most.

Wages UP
Taxes down
Employment UP
Live register down
Negative equity down
Arrears DOWN
Household debt DOWN
Household Savings UP
ETC...
 

Watcher2

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Perhaps I was being too hard on FG because it seems like our "recovery" is following a global trend of all increases in productivity being hoovered up by hyper-inflation on rent.

This article explains it well - particularly in an Irish context.

https://www.irishtimes.com/opinion/david-mcwilliams-why-ireland-s-growing-economy-isn-t-making-you-richer-1.3327231?__vfz=c_pages=5923100000648

Cue the FG shills attacking David McWilliams, but this article rings true to many.

If this is indeed a global trend then surely it's one governments - who should be representing the best interests of the majority of their citizens - should be working tirelessly to reverse as opposed to greasing the cogs like our beloved leaders.
Yeah, I read that article yesterday. For me, the biggest point in it was about the poorer quality of jobs being created. Recovery is one thing but the type of recovery is completely something else. Zero hour contracts are awful yolks for workers. The pendulum is swinging too far right. Nasty, sh1tty employers should take note of what's going on in Ryanair. Chickens will eventually come home to roost.
 

Watcher2

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My main issue with his argument is in the first sentence.

"....oddest things happening in the Irish economy is that unemployment is falling quickly but income-tax receipts are not rising in tandem. The Government is confused. When employment rises so should income tax. So why isn’t this happening"

That is not true. So far in 2017 income tax is 18.3b , 738m up in year on year terms when compared with first 11 months of 2016.
Income tax for 2016-2103
19.169b, 18.359b, 17.045b, 15.758b.
This is also in the period when the gov have reduced some rates.

So unless his tax argument is based on the fact that our income tax in 2017 is 1.4% below the target set, then that point is wrong.

In fairness, his substantive point re wages over the longer term, and rewards for capital rather than labour, is correct. I think we can trace that back to Ronald Reagan.
But those are the headline stats. Within those increases, are they increasing at the rate they should or is the quantity of jobs masking the quality?
 

Watcher2

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And the Finance Dept have already come out and said the way the calculated expected growth in USC receipts for 2017 was wrong and it has affected the supposed "under performance" in tax receipts.

I would have expected McKnowall to be a move avid reader.
well of course they would say that. They don't want to admit the citizenry are getting shafted.
 

Taxi Driver

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The November Exchequer Returns show that Income Tax receipts are up 4.2% compared to the last year.

From 2012 to 2017 employment in Ireland has increased by 225,000, full-time employment is actually up 235,000.

The latest figures from the CSO show that annual growth in average hourly earnings is 2.2%. This is at a time of near-zero inflation. Ireland is probably at the top end of the rankings for real wage growth in the EU.

Do the high-paid workers in the MNCs really care how productive they apparently are? Average pay in the MNCs is twice the average across the rest of the economy.

Pay and productivity have tracked each other in the indigenous sector. The analysis provided would say that workers are better off in the indigenous sector because they are getting more of the output produced. Is there a rush from foreign to indigenous companies?

Aggregate wages paid by companies was €55 billion in 2008, fell to €48 billion in 2012 and was €59 billion in 2016. Companies in Ireland have never been making more wage payments.

Yes, rents have increased but, in overall terms, they are not absorbing a large share of the increased worker remuneration. In 2012 total rent paid for housing was €3.2 billion, last year it was €4.2 billion. That is €1 billion compared to the €11 billion increase in the aggregate wages.

On inflation it is the low rate of inflation that has kept the place together and most of that low inflation was initially a direct result of central bank action - they slashed interest rates. This didn't cost workers it benefitted them! Also, there were very limited wage reductions in the private sector in Ireland. The correction was achieved through making people unemployed. And, as noted above, the impact of the recovery is being largely felt through increased employment.

We are creating jobs but at wages so low that these workers aren’t paying income tax.
There is no proof of this, but it feeds into a narrative that people can fall for and it can be seen in this thread. We have a 4.2% increase in Income Tax and 2.2% increase in average hourly earnings.
 

Watcher2

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I assume that you're espousing our government nuking China?

Or paying the likes of Bus Eireann, Irish Rail, Luas and Dublin Bus wurkers more money, simply because the Chinese can't come in and drive our public transport fleet?
I assume you are espousing the glorious "if and when" type zero hour contract. Just so you are clear, the "if and when" contracts are an even baser form of zero hour used to circumvent the compensation to be paid under s. 18 of the specific labour law, apologies, the exact name alludes me now. I think it was the 2007 act. I'll dig it out.
 

hammer

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Taxi, how much are Income Tax receipts up since say 2013 when the recovery really kicked in.
 

Watcher2

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Ultimately all of this is down to a vast increase in the global labour supply. Billions of workers have been added to the world econony - mainly from China and India. Its a process started in the 90s and will continue for another 10 to 15 years.

After that, new worker supply will dry up and new demand from all these new consumers will pick up too.

And thats why corporate America is investing in robots - they see the gradual end of cheap human labour supply increases.
Nah, why do you think merkel threw open the doors a few years back? Or Olli Rhen forcing Portugal and Spain and the like to blast holes in their labour protections?
 


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