Middle-income…

As a companion piece of sorts to the Backroom column in the SBP mentioned earlier today, how about this one about the working family from the same family. But not any working family, but the middle-income earners. Personally I’m curious as to what constitutes a middle-income earner, but there’s no clear definition provided by Martha Kearns the author of the piece. In fairness she notes that ‘A couple with two children will be down €240 a year on child benefit and probably be paying an extra €528 in PRSI between them (that would be on two wages each over €18k per annum).’ That sort of narrows it down a little, but even still. A bit of clarification would be handy. And there’s more, ‘They’ll also now have to fork out property tax (on a home with negative equity) of between €300 and €500 a year (twice for some of the more unlucky who are stuck with a second home from before they were a couple) and between an extra €10 and €126 on motor tax.’

All this is true, but it’s hardly the exclusive provenance of middle income earners. Those on more modest incomes will feel the pinch too. And those on no incomes at all.

When taking stock, most middle-income earners will admit that they can probably take most of these hits – for now. They can absorb them in a way that those close to, or below, the poverty line cannot.
They can cancel the Sky subscription, get rid of the home phone, get a cheaper package on their mobile phones, buy their children’s clothes in Penneys rather than Dunnes Stores, do the grocery shop in Aldi instead of Tesco, cancel this year’s family holiday, and/or reduce the number of presents under the Christmas tree.
It absolutely goes without saying that there are many categories of people who are more vulnerable and worse off financially than middle-income earners. Those will have some of these cuts outlined above and even more in the form of cuts in job-seekers allowances, increases in prescription charges for medical card owners and cuts to various pensions and disability allowances.
But middle-income earners should no longer have to apologise for their place in life – and surely have a right to be disgruntled. Most of them have spent years working to get to the point of having a modest quality of life.

No Sky subscription, pay as you go mobile, kids clothes in Penney’s, rarely if ever darkening the door of Tesco – welcome to my world, and there’s plenty much worse off then me, but it’s this idea that somehow those things constitute grand sacrifices when they’re the way many many of us live. Indeed some would say that these are essentially choices, and that those able to exercise that choice are – broadly speaking (obviously on an individual basis it may be different) – fortunate enough.

But that’s just the way it is for me, for one, the way it has been for years now, and long predating the boom. And what also irritates me is the idea that ‘most of them have spent years working to get to the point of having a modest quality of life’. So have we all. Anyone who draws a wage will have a similar experience. Many won’t have gone to college but started working straight from school. And so on, and so forth. Those who in the last few years have been tipped out of the labour market into unemployment. And those who never managed to carve out stable long term employment across the years. They’re somehow getting by on a basic level of income of €188 per week or €9776 per annum. There are other benefits that one may or may not be eligible for, but that’s the baseline.
She continues:

Despite earning decent wages, the fact is that many are no longer well-off, or anywhere near that, and are now just surviving, barely covering the bases.

But again, killing the Sky sub isn’t ‘just surviving’. Though it can potentially get much worse if that measure and others like it isn’t sufficient, and that too is the situation facing many (and arguably a potentially increasing number of) people. It is the constant focus on the middle that is so irritating.

It is interesting to consider what a political or policy response to this might be? And to what purpose? Lowering taxes is not sustainable – according to the orthodoxy, and to any serious analysis either. Much of the middle tends to access state services at various points in their lives, as do most citizens if you think about it – child benefit being one example, but there are others, yet expenditure cuts impact less rigorously upon them. Sure, one could do away with the CPA, but there’s a fair number of PS employees who are middle income earners too, and they pay taxes as well.

Moreover, all indications point to any supposed ‘savings’ being swallowed by debt repayments. So actual amelioration of the situation is well down the list of priorities.

At the end of the day, quality of life with one’s family – whether you are living in a mansion, a ghost estate, an apartment in negative equity or a council house – is what everyone wants. Yet, bit by bit, that quality of life is vanishing.
Minister for Public Expenditure and Reform Brendan Howlin loftily promised last week that people would prosper again – but for those in the middle-income bracket, clinging onto their jobs and their homes, it’s hard to see that day coming any time soon.

But why is it that somehow the plight of the middle is worse than those ‘close to, or below the poverty line’? Because if it isn’t worse then what is the purpose of the article at all?