Cost of living crisis is the new thief in the night
These days, various media channels are clogged up with discussions regarding the latest public sector industrial dispute.
Teachers, gardaí, nurses and doctors, have strong arguments to press, particularly younger ones, with elevated rents and an understandable resentment at being saddled with lower remuneration pay structures.
Union spokespeople press their case with enthusiasm. Interviewers will attempt to question the particular spokesperson, but it is hard to put up much of a fight against someone who has mastered their brief, particularly when the clock ticks on and time runs out.
All too often the discourse is more superficial than analytical. The advent of social media has hardly helped in this regard.
The angry always outshout the more contemplative. Emotional buttons are pressed. this is particularly so when matters financial come to be discussed. Data is not sexy, nor is it human.
The public debate is skewed. In Ireland, we have an economy that is still under repair. It is all too easy to take for granted the ground that has been regained since the crisis peaked.
For the first time since 2009, more than two million people are at work, but the prospect of Brexit looms. A spanner may be about to hit the works.
You don’t have to be a professional climber to know that if one loses one’s grip on the ground underneath, it is all too easy to start sliding back down the hill. We can be quick to forget that outside the public sector, there are real problems building.
The recession has persisted across much of the Midlands and Western Seaboard, particularly in smaller towns.
Many have been bypassed, their trade swallowed up by shopping centres. Whole regions are suffering from a demographic gap, the loss of a whole swathe of people in their 20s.
Much of the rebound has been driven by the presence in this country of emigrants, skilled people who have come to Ireland from other countries around Europe.
If low corporate tax arrangements have clinched badly needed projects for this country, it is the people who have filled many of the posts created who have helped greatly in ensuring that these companies have bedded down in Ireland.
Remember that when over 250,000 jobs in Ireland were being wiped out, the FDI sector held firm.
Back in the day, it was fashionable for the 1970s commentariat to decry foreign investment and to argue that such companies lacked loyalty. Tell that to the thousands of people who work for Apple, or the thousands who worked for Microsoft through the downturn.
I hold no brief for Apple and its ilk when it comes to its tax avoidance strategies, but its loyalty as an employer was one reason the Government took up the cudgels on its behalf and why, to the surprise of many, polling data suggest the Irish public backs this approach.
What seems clear is that many of these firms have hung on long after great Irish household names have disappeared, or decamped to lower-cost locations.
Some credit for the preservation of Irish jobs at foreign-owned companies, should go to our much maligned middle ground politicians, and some should go to executives in the IDA and Enterprise Ireland, who worked hard to rebuild the country’s reputation from the recklessness of greedy golfer-financiers and the swashbuckling gamblers of the property sector.
But now a thief in the night has arrived in a new guise. The ongoing mismanagement of housing policy has combined with shortcomings in childcare to generate a cost of living crisis which is hitting particularly hard the young skilled people who are powering the emerging economy.
Last week I attended Ibec’s annual human resources conference and met up with some of those close to the coalface.
One young continental European technology worker was particularly forthright. He wants to buy a property here. He likes the place, but is considering leaving because of the huge costs of housing, and the high levels of marginal tax on middle-income single workers.
Many of his non-Irish colleagues have already done so. Beneath the radar, a number of technology firms have already begun to transfer jobs to places like Barcelona where the cost of living is far lower.
Mobile investment has long been in high demand, but increasingly, the mobile skills that drive such companies are being courted like never before.
We have tended, recently, to take such people for granted. We are getting the benefit of their skills just as countries like Canada and Australia are gorging on the benefits of our education system through their absorption of so much Irish talent.
The Anti-Austerity Alliance, which commands much space on the airwaves, is pressing for higher taxes on the income of the “wealthy”.
Certainly, the truly wealthy could pay a lot more, but these people are leopard-like in their capacity to dodge fiscal entrapment. Many will simply relocate to richer pastures. A high tax policy usually means higher levies on the skilled, many of whom, these days, can quickly depart these shores. That’s the law of unintended consequences.
Of course, the truly talented will always take wing. I could list many sons and daughters of friends, not to mention family, who have been attracted to the great centres of medicine and finance, either side of the Atlantic, or in the Pacific.
Such birds could not really thrive in our small island cage. But do we really have to give them a big shove to help them on their way, and should we not be taking steps to woo them back when the homing urge takes over?
Anne Heraty, is Ibec’s current president. She has carved out a high profile after many years as CEO of CPL Resources, a recruitment group with a turnover of almost €400m.
Last week she warned: “Talent has never been more mobile. Firms are striving to make themselves attractive to talent. But our marginal income tax is too high. I talk to people every day who are considering relocating [from Ireland].”
It is hard to argue with this analysis. Instead, what we can expect is a picket lines and a lot more huffing and puffing that generates lots of lovely heat in the media circus tent.
Just remember. If we drive away the talent, the employers, indigenous as well as foreign, will follow quickly in their wake.
We really should avoid this prospect at all costs.
