More social spending needed to address rising cost of living - ICTU

The Irish Congress of Trade Unions said Ireland having the second-highest minimum wage rate of 21 EU member states is misleading
More social spending needed to address rising cost of living - ICTU

Muireann Duffy

The social wage in Ireland is "exceptionally low by EU standards," according to a report published by the Irish Congress of Trade Unions (ICTU) to mark International Workers' Day.

The Social Wage report compares public spending and government revenue with that of countries across Europe in terms of unemployment benefits, housing and childcare.

The social wage is described as the "measure of how much better off individuals are from social spending by government on welfare supports and services".

Despite Ireland having the second-highest minimum wage of 21 EU member states, ICTU claims the low social wage makes the country's position misleading.

When taking into account additional data, including that Ireland is ranked the second-most expensive country of 27 EU countries, ICTU says: "When adjusted for the purchasing power of workers on the minimum wage, Ireland falls from second to seventh position in the rankings and behind other rich EU member states."

Out of pocket

The group, which represents 45 unions across Ireland, says increasing the provision of public services is one way the Government could reduce the cost of living, explaining: "Free-of-charge or low-cost essential services provided from public funds reduce people's out-of-pocket expenses from their income".

ICTU adds that Ireland has the lowest level of public spending per person when compared to similar EU countries, including Germany, France, Belgium, Austria and Denmark.

The report suggests Ireland's low-tax economy gives the Government room to raise revenue by increasing tax rates in order to fund additional social spending to allow for a more generous social wage.

In terms of housing, ICTU says an over reliance on the private sector is contributing to inflated rents, while also being "poor value for money for the public purse, with landlords, rather than the State, accumulating assets".

They group said the lack of affordable housing is "laid bare" by figures showing an "unprecedented number of individuals and families experiencing homelessness".

"A less visible manifestation of our broken housing system is the high proportion of full-time workers living with their parents," ICTU adds, with 62 per cent of such workers saying they do so for 'mostly' financial reasons.

'Threadbare social safety net'

While recognising Covid-19 was an "unprecedented public health crisis and the biggest economic shock in the history of the State", the congress says the pandemic "exposed the weakness in our threadbare social safety net".

"The pandemic has caused many to question the purpose of our welfare system. We are now at a moment where there is wide public support for putting a strong safety net in place.

"It is time for meaningful consideration on the role for government in protecting people’s standard of living against common risks, including expanding access to affordable housing, child and adult care, free healthcare and education, and heavily subsidised and sufficient public transport," the report concludes.

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