Rich Get Richer – Poor Get Poorer

It is often claimed that this recession is hitting all of us. It is said that the rich suffer just as much as anyone else, if not more. It is argued that we all must make a sacrifice as we are all in this together. However this simply isn’t true. In fact this crisis is resulting in even further increases in the gap between rich and poor. Inequality and poverty are rising to even higher heights. Austerity is making the poor suffer the most while leaving the rich untouched. Quite simply the rich are getting richer while the poor are getting poorer.

The Distribution Of Income In Ireland

A recent study by Social Justice Ireland shows that disposable income of the poorest households have declined by a massive 18% while the richest households have actually seen an increase of 4%. The top 10% of earners now receive 14 times the income of the bottom 10%. This has sky rocketed from 1980 when it was only 8 times. In fact the top 10% receive more than the bottom 60% of Irish society. All data is for 2010. Director of Social Justice Ireland Sean Healy said “There is something profoundly wrong with government decisions that produce this lop-sided distribution of income favouring the richest when Ireland’s poor and middle income people struggle to make ends meet in these extremely difficult times.” He also criticized the government’s policies as they are only making the situation worse.

The Importance Of Social Welfare In Reducing Poverty

The study also pointed out the importance of social welfare. It estimated that without it the poverty rate in Ireland would be 51%, whereas with it, it is 15.8%. This still means more than 700,000 Irish people are in poverty, a rise of 80,000 people in one year as the rate was only 14.1% in 2009. This is a shockingly high level of poverty in what is supposed to be one of the richest countries in the world. Surprisingly 29% of households in poverty were classified as at work. The fact that a family could be working and still not be able to afford the necessities of life is a deep injustice.

The Numbers In Poverty In Ireland – Note How It Increased After 94 Even Though The Economy Was Booming

The 2012 Budget was condemned as one of the most unequal budgets yet as the poorest 40% of households will suffer cuts of between 2 and 2.5% while the richest 30% only lose 0.7%

Change in disposable income 2009 & 2010

Michael Taft has also studied the rising inequality in Ireland. In the diagram below you can see the impact of austerity up to 2010 (the most recent data). It is shocking how unequal the burden has fallen. The poorest has been hammered while the richest have barely been scratched. This is absolutely outrageous. The poor did not benefit from the Celtic Tiger yet they are suffering the most from the recession. The rich who made the fortunes during the good times get to keep it unlike the rest of the country. It goes to show how far you can get with enough political influence. The rich were able to influence Fianna Fail and seem to do the same with the new government. If you can afford lobbyists or to make political donations then you can escape your obligations. As usual it is the poor, voiceless, outsiders who must suffer.

The Impact Of The Recession On The Different Income Groups

Ireland is in a desperate crisis. Austerity is making things worse. Worse still, poverty and inequality are rising. The rich are dodging paying their fair share. We can no longer crucify the poor on the cross of austerity and force the crown of poverty upon their head. We can no longer afford to allow the rich get richer while the poor sink into abject and wasteful poverty.


Filed under Economics

6 responses to “Rich Get Richer – Poor Get Poorer

  1. bgrober1

    Just be lucky you don’t have to try a dose of American libertarianism! Out of curiosity, what are your tax rates rates like across the pond over there? As in, what is the maximum amount levied on the rich, middle income, etc.? I could look it up, but I’d enjoy commentary on it.

    • While we’re not as bad as America, we’re not far off. Income tax is 20% up to 35,000 (the average wage) after that its 41%. Like America there were a lot of tax cuts around 2001 that are really biting now. Corporation tax is 12.5% and capital gains is 20% plus there’s a lot of loopholes and tax breaks etc. Sales tax is 23%. Basically business gets off light so the rest of us have to make up for it.

  2. “We can no longer crucify the poor on the cross of austerity and force the crown of poverty upon their head.”
    I fully agree, and I think that Greece and Spain would as well. I feel your explanation of the inadequacies of the Euro as a common currency serving many types of economies gives great insight to the spiraling financial situations of some European countries.
    If indeed austerity measures are necessary, citizens would benefit from structuring the terms in ways that do not encourage further inequality.

    • Does any body feel that behind the scenes all us ordinary citizens are being utterly screwed while the elite few are just becoming richer? I’m not a conspiracy theorist but I’m getting there, check out Bilderberg! Bloody scary but nobody seems to know. Yet I’d say we all would agree that something’s not right in the general mix of things?

  3. Why the socialist myth of the rich that are getting richer and of the poor that are getting poorer is a lie

    • First of all I don’t like that you ignored everything I said and merely posted for the sake of self-publicity. Second of all, your article misses the point both by claiming only socialists care about inequality and the effect of relative wealth. Sure the 1% lost more in absolute terms in the recession as they were richer, but you forget that while poor people have less the little they lose affects them much more.

      Finally, you need to edit the end of your article as the format is a complete mess with random symbols thrown around the place.

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