Doling out what everybody knows...

“Everybody knows that the dice are loaded,

SO wrote Leonard Cohen in his song entitled ‘Everybody Knows’. Universal truths are something everybody knows. One universal truth at this time of living austerely is that those without work have it made.

Everybody knows that the dole is generous, everybody knows that welfare life is warm, everybody knows that they’re acting the maggot, everybody knows it’s doing fierce harm.

Well, almost everybody. The 450,000 out of work may have a different take on these things, but nobody is really asking them.

The problem about everybody knowing something is that there is no incentive to actually find out whether it’s true. So when an eminent economist trots along to confirm that, yes, what everybody knows can be backed up with facts, well, his missive is treated like gospel.

Last week, a paper emerged in the media confirming that life on the dole is indeed fine and dandy. Reports surfaced in relation to a working paper undertaken in the ESRI that suggested nearly half of all working parents would be better off on the dole. It also found that 15% of people without children would have a higher net income if they were unemployed.

Truly, these findings are explosive. They suggest a state in which lazing about the house is more profitable than working.

And let’s face it, everybody knows the majority of people on the dole don’t really want to work unless they are paid extortionate wages.

The ESRI paper was auth-ored by Richard Tol, who left the country at the beginning of this year, slamming the door on his way out. A Dutchman, Tol moved to Britain, because, he said, this country was facing a decade of austerity. He also hit out at his former employer, claiming the ESRI was neutered due to being funded by the Government.

As a result, it’s difficult to know at exactly what stage the working paper was at, or when it was completed. What we do know is that following the furore in the media last Tuesday, the ESRI made an unprecedented move by withdrawing the paper, claiming it wasn’t prepared to stand over the findings.

And what of those findings? The paper concentrated on the cost of going to work. Following another outbreak of righteous indignation last September, in which it was again claimed that unemployment was an attractive option, the ESRI produced figures showing that such a notion was spurious. Social welfare rates are not better than what can be earned in a job, the institute showed.

But Tol’s paper attacks that thesis. He looked at the cost of going to work, such as transport, food, and childcare. His conclusion was that for many, work simply wasn’t worth getting out of bed for. The figures produced suggested that going to work for parents of a child under five costs an extra €9,000 and for somebody without a child an extra €7,000. When these figures are taken into account, a job garners less than is available on the dole for a large cohort of workers.

The paper made little or no provision for costs associated with being unemployed, such as transport costs accumulating in looking for work. But everybody knows that those on the dole don’t really want to work.

The headlines said that 44% of working parents and 15% of those who are childless would be better off on the dole. To be fair to Tol, the actual paper makes the case that it’s 44% of parents with a child or children under the age of five, which immediately narrows down the culprit constituency.

But there’s much more in the detail that suggests the whole exercise may have a shaky basis.

The research is based on figures from 2005, when Ireland was a different country, before social welfare rates were subjected to three cuts. There has not been an equivalent fall-off in costs such as transport, food, and childcare. In 2005, there was largely full employment in the country. If the dole was so attractive back then, why weren’t more availing of it?

The element related to food is particularly interesting. The paper puts down a cost of €49.10 per week for lunches and so forth that accrues to those in work. This is about €10 a day, or €2,500 per annum. That’s a fine quality of grub to be eating in the middle of the day. What has become of the poor bedraggled packed lunch? Are we to believe that people on low income splash out daily to this extent?

Tol’s study had transport costs at €106 per week. There may be a case that somebody has to drive their own vehicle long distances to work, necessitating a tank-and-a-half of petrol, but how typical is that? And then there is clothes at €36 a week, equating to about €1,500 per annum. What low earner is required to spend that amount of money on clothes for work?

The big element to the cost of going to work is childcare, which is estimated at €3,000 extra. There is little doubt that childcare costs in this country are exorbitant but that has precious little to do with the unemployment problem. In the study in question, childcare would only become an issue if a second parent was entering the workforce, who, prior to getting a job, would not have been entitled to full welfare benefits in any event.

But facts are not the issue here. The issue is confirming what everybody knows. And everybody knows the dole is a doddle.

The ESRI was quick to state it was withdrawing the study because it couldn’t stand over it. Immediately, the conspiracy theorists swung into action. It was quickly a case of “everybody knows the unpalatable nature of the findings prompted the Government to put pressure on the ESRI to shut it down”.

Nobody bothered to note the findings, such as they were, fitted nicely into a Government agenda that has not over the past year portrayed the system as wasting money and being top-heavy with fraud.

The most depressing element of the whole affair is that once again there is a large constituency out there that resorts to demonising people who are struggling the most. More than 300,000 people have lost jobs in the past four years, yet there is still an appetite to suggest that, to a large extent, they are better off than they were when gainfully employed.

Primarily, it reflects a complete lack of solidarity at a time when that virtue is required more than ever. Everybody knows the other guy is doing better than you. Everybody knows your struggle is funding a better way for another. Everybody knows… what everybody wants to know, which sometimes bears scant relationship to the facts.

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