Issue 75 Inequality Matters

Working Notes Issue 75 

 

Editorial

on Wednesday, 03 December 2014. Posted in Issue 75 Inequality Matters

PdfIconEditorial

This issue of Working Notes looks at inequality – a  subject which has been the focus of increasing attention in the last few years, from sources as diverse as the Occupy movement and the OECD. The slogan of the former, ‘We are the 99%’, reflects the extreme concentration of wealth and incomes in the top 1% of the population in developed countries. Meanwhile, the latter acknowledges that: ‘Income inequality in OECD countries is at its highest level for the past half century. The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago’. (www.oecd.org; emphasis in the original)

Household Wealth and its Distribution in Ireland

on Wednesday, 03 December 2014. Posted in Issue 75 Inequality Matters

PdfIconHousehold Wealth and its Distribution in Ireland

Tom McDonnell

Introduction

We do not know the distribution of household wealth in Ireland. The reason is straightforward. We do not yet have sufficiently high-quality data usable for distributional analysis – the type of analysis that would allow us to know what groups within society own what share of wealth. We cannot even be certain about aggregate net wealth in Ireland or of the composition of wealth by asset type. 

Household balance sheet data, such as quarterly accounts data, is of minimal use for distributional analysis as it provides only aggregate data and excludes certain types of asset. On the other hand, survey data contain systemic biases due to the undervaluation and/or omission of certain asset types – for example, financial and personal assets. 

Ireland's Income Distribution

on Monday, 01 December 2014. Posted in Issue 75 Inequality Matters

PdfIconIreland's Income Distribution

Micheál L. Collins

Introduction

Judged in an international context, Ireland is a high income country. The 2014 United Nations Human Development Report ranks Ireland as having the 28th highest gross national income per person in the world – with an average income at almost two and a half times the world average.1 Data from the Central Statistics Office (CSO) show that average incomes, also measured as gross national income per person, stood at €32,599 in 2013 – a historically high figure, though lower than the peaks achieved in the years immediately before the recent economic recession.2 

However, while overall averages are interesting, they assume an equal distribution of income across the population. In reality, income is not so evenly spread.

Catholic Social Teaching and Inequality

on Monday, 01 December 2014. Posted in Issue 75 Inequality Matters

PdfIconCatholic Social Teaching and Inequality

Gerry O’Hanlon SJ

The Question

My 92 year old uncle Rory recalls with fondness a time back in the 1940s and '50s when he used to go for the odd drink in summer time with the then-goalkeeper of the Irish soccer team, a relative through marriage. Rory, a tradesman, was earning about IR£10 a week; Tommy, a soccer star playing in England, earned about IR£20. The differential in earnings was no bar to social relations. Would there be the same ease of relations if the footballer were earning a 100 times, a 1,000 times what the ordinary person earns, as is the situation today?

In the Preface to their book, The Spirit Level, Richard Wilkinson and Kate Pickett state: ‘At an intuitive level people have always recognized that inequality is socially corrosive’.1 They go on to argue that, beyond intuition, the evidence shows that less equal societies have poorer outcomes in nearly every social domain.2 This implies, counter-intuitively, that even the very rich benefit from a more equal society.

Interview with Thomas Piketty, Author of Capital in the 21st Century

on Monday, 01 December 2014. Posted in Issue 75 Inequality Matters

PdfIconInterview with Thomas Piketty, Author of Capital in the 21st Century

Jean Merckaert and Jean Vettraino

Introduction  

Thomas Piketty is an economist. He is director of studies at the School of Advanced Studies in Social Sciences in Paris and a professor at the Paris School of Economics. His research focuses on economic inequalities. His most recent book, Capital in the Twenty-First Century,1 has generated lively debate in the United States and Europe.

In Capital in the 21st Century, Thomas Piketty shows that the rich get richer more quickly than the rest of society, in an almost mechanical fashion. In his view, the main driver of inequality is the tendency of returns on capital to exceed the rate of economic growth. He makes the case for a progressive taxation – including income tax, inheritance taxation and a yearly tax on capital. Is this possible at a national level? Is it realistic in an era of tax havens? Would it be enough to reduce inequalities? 

 

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