The INOU responds to ESRI Working Paper

12 Jun 2012

Over the past few days an ESRI Working Paper on The Costs of Working in Ireland has received a lot of attention. This paper uses econometric tools to look at the cost of going to work vis-à-vis not going to work or being unemployed. Clearly working in Ireland can be expensive and in particular if families are paying for childcare: a service that remains inadequate and costly when compared to other countries. The inadequate provision of childcare can make returning to work for unemployed people and others in receipt of a welfare payment challenging and in particular if the work on offer is precarious and low paid.

However, in the conclusions the paper makes an assertion that "a comparison of take home pay plus extra expenditures shows that 15% of the people without children, and 44% of people with children, are better off not working." Where is the income data that they used to draw this conclusion?

In Table 15 of the working paper it shows the 'Extra average weekly expenditure for a CES'. There are many unemployed people who would look at this table and note that it fails to take account of the costs for them of seeking work: a requirement they must be able to demonstrate they are fulfilling if they are to receive their weekly Jobseekers payment.

The paper for mainly technical reasons leaves out the cost of heating and light: a cost that many unemployed people would feel is higher for them when they are out of work. The issue of heating and light is clearly a cost of living one and one that highlights the dangers of drawing the types of conclusions this report does when a more complete picture is not explored.

While the paper usefully highlights the cost of going to work, the unemployment crisis facing Ireland needs to be addressed as a matter of urgency. It requires the creation of decent jobs that ensure an acceptable standard of living; and the creation of an entitlement and employment service that really strives to support unemployed people to make the transition from welfare to work in a constructive manner.