Almost one in four workers are struggling to live on low rates of pay, according to a new, in-depth study on inequality in Ireland.
The report, to be launched today by Tasc (Think Tank for Action on Social Change), said official statistics underestimate inequality levels in Ireland.
In particular, inequality in different sectors is stark.
At 23%, Ireland has the third highest prevalence of low pay in Europe. In total, some 23% of all employees in the wholesale and retail sector and 39% of all employees in the hospitality sector are low-paid workers.
Another particular feature of the Irish economy, also contributing to market inequality, is the persistently high number of jobless households.
The report confirms that Ireland has the highest rate of market inequality in the OECD. It is even higher than Greece where unemployment is multiples of the Irish figure.
However, when taxes and social welfare transfers are redistributed, Ireland ranks in the middle among EU countries, when measured in terms of disposable income.
The State We Are In: Inequality in Ireland 2020 said the share of pre-tax national income going to the top 1% of earners could be much higher than previously anticipated. Official statistics suggest that the top 1% earn 5.6% of the national income but analysis in the Tasc report suggests they actually earn approximately 12% of pre-tax income.
Describing Ireland as “an intriguing example of modern inequality”, the report’s author, Robert Sweeney, economic policy analyst with Tasc, suggested that the underestimation of inequality in Ireland is becoming more pronounced.
He said wage increases for low-paid workers are essential to really reduce individual market inequality.
“When we talk about inequality we cannot escape the glaring fact that Ireland has very high levels and high concentrations of low pay in particular sectors,” he said.
“Sometimes this can be passed off by claiming this is due to having a large hospitality sector because of the importance of tourism, for example. The reality is our high levels of low pay is not down to Ireland having large hospitality or retail sectors.
“What we have is large numbers of people being paid poor and unliveable wages within these sectors.”
He said reforms to equalise income does not necessarily mean higher taxes on income but, instead, could “tackle excessive compensation at source”.
The report identifies a range of measures which could reduce inequality, including the need for greater supports in access to childcare and training, while it also argues efforts need to be made on the high cost of living, including regarding the housing crisis.