We are not out of the economic woods just yet

Ten years on from the onset of the crisis we can take stock. The Government is keen as are many to wipe it from memory — keep the recovery going.

The recent undoubted recovery has softened memories for the most part. However, if we forget the past we will surely forget the lessons of the past.

Let’s look at the crisis over a 10-year perspective. As we know, Ireland is different. Our economy is distorted by the large multinational sector, so much so the gold standard of measurement is deemed to be inadequate.

Like those supermassive stars that require new measures of size, the CSO has had to create new measures of national output.

What this shows is that stripping out the effect of re-domiciled firms — of

companies moving for tax reasons, — the economy has expanded by 12% since 2007.

That is a pretty anaemic 1.2% or so per annum.

Looking at per capita figures we see even more clearly why the mantra of “keep the recovery mgoing” was an utterly foolish one on which to campaign. From 2006 to 2016, the modified national income, reflecting the real world in which we all live, has risen a miserable 0.5% per annum, in nominal terms. Add in inflation…

So the crisis is 10 years long. Median real household disposable income is down, as of 2015, over 10% from 2007. Adjusting for household size, median real income is under €20,000 per annum. This is not a nation of wealthy persons.

In terms of poverty and social conditions, across all measures, these are higher in 2015/6 than they were in 2007/8. They have come down from the heights of the recession but still suggest the crisis is still ongoing.

A startling figure is that the deprivation rate, being unable to afford some of the basic elements of what we would consider modern living — meat every second day, that sort of mad socialism — has more than doubled since 2007. The consistent poverty rate has also more than doubled — 25% of the population are deprived on an occasional basis and 8% on a consistent basis.

To be sure, the unemployment crisis has abated. Having peaked at 15% in 2010, it is now at 6.4%. This is remarkable and welcome.

However, an examination of the duration of claim shows there is a persistent number, 113,000 at last count, of persons who have been unemployed for more than a year. Down from its peak of nearly 200,000, it has been falling very slowly, with a pronounced dip each year in September/ October reflecting persons transiting to full-time education.

The recent evaluation of minimum wages has shown clearly we are a low-waged economy. Those who have been getting jobs have been getting lower paid, more precarious ones. When inflation is examined, there are significant variations. Food is slightly down but education and health are significantly up as are alcoholic beverages and goods and services.

Finally, the scandal of our age: homelessness. Numbers have been rising inexorably. Homeless family numbers have quadrupled in three years. These see no recovery.

This is not to say we have not come out of the depths of the crisis. We have. However, to focus on bond yields and on the highest macroeconomic statistics is to miss the reality on the ground. We are not yet out of the woods.