Central Bank: 800,000 adults don't want a job

It's a catchy headline for sure but doesn't really say much. I might not want a job, but it doesn't stop me getting up in the morning to do a job.

The real issue is the lag between the official unemployment rate and the reality that that figure is made up of a lot of part-time workers who would actually like to see their hours increased. Hence, the claim, no inflationary pressure on wages.

I would dispute this, wage inflation pressures are everywhere. They are being resisted through credit expansion (unsustainable), technological changes and low productivity growth. That is to say, the primary driver of economic growth in the Western World is asset accumulation, onset by money printing schemes such as QE. This has is being credited with 'trickle-down' wealth effect inducing increased consumer spending.
In reality, the return is paltry, and QE serves to do nothing other than create a 'trickle-up' wealth effect. This is why US stock markets are at all time highs and closer to home, Dublin and London are experiencing property booms once again.
Examples of wage inflationary pressures are;

Rents - all times highs, according to Daft.ie
Savings - next to non-existent for 60% of working population
Mortgage interest (mine) - up 3.5%
Interest on savings - non-existent
Charges on bank accounts that are greater than the interest paid on money on deposit.
Car insurance (mine) up 75%. I was actually quoted increases up to 145%.
Life assurance (mine) policy has devalued 54% in past year.
House insurance (mine), best quote I got was 10% higher than previous years premium.
Grocercies (-2%) - actually starting to make savings here.
Electricity (-2.5%) - purely because I participate in the annual provider swap circus, otherwise it would increase some 16%.
Childcare charges up 4%
 
TheBigShort said:
I would dispute this, wage inflation pressures are everywhere. They are being resisted through credit expansion (unsustainable)...
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Is the point here that low interest rates are enabling people on low incomes to consume from loans / debt? Just asking, as the rest of your post sounds right to me.
 
What TBS has identified is pressure on household budgets.

Pressure on wages is when employers are feeling pressure to increase pay.

That is not happening because Trade Unions are failing to do the hard work of organising outside the public sector.

They would rather increase the pressure on household budgets by hitting the easy targets in the public sector.

It a much easier life being a union organiser for nurses or teachers than for truck drivers or fast food workers.
 
cremeegg said:
What TBS has identified is pressure on household budgets.
Pressure on wages is when employers are feeling pressure to increase pay.
That is not happening because Trade Unions are failing to do the hard work of organising outside the public sector.
They would rather increase the pressure on household budgets by hitting the easy targets in the public sector.
It a much easier life being a union organiser for nurses or teachers than for truck drivers or fast food workers.
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I agree with your "much easier life" angle, but I think one of the main reasons for lack of pressure is that employers are recruiting from a pool of hundreds of millions of workers rather than 5 million.
(ps the Trade Unions were in favour of allowing that also though)
 
odyssey06 said:
I think one of the main reasons for lack of pressure is that employers are recruiting from a pool of hundreds of millions of workers rather than 5 million.
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That is true, and while I recognise the effect on low skilled workers in high cost countries like Ireland, in terms of the bigger picture this is a great thing.

It is a great thing in itself that billions of people around the world have been lifted out of poverty in recent decades.

That also means that more and more people can afford the products of Irish output. Globalisation is not a fundamental problem, handling the effects of automation, is another matter.
 
cremeegg said:
That is true, and while I recognise the effect on low skilled workers in high cost countries like Ireland, in terms of the bigger picture this is a great thing.
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Don't forget about the effect of high skilled workers also ... who come to work in Ireland in technical positions such as IT, engineering etc
On a macro level probably they are helping Ireland's global competitiveness - but they are doing that by reducing the pressure on wages in those positions to increase. And they are also greatly increasing demand in the property and services market.
 
Given that we like in a global market for wages the only local solution to wage pressures is to reduce the cost of living. Above all else that means lower taxes and that can only be done without reducing services by a lower cost of delivery of those services by the State.

My rent has gone up by €150 a month due solely to the increased tax and regulatory burden the State has imposed on my Landlord. If I want to buy a house a large chunk of that cost is due to levies etc imposed by the State. The State is like molasses in the arteries of the economy.
 
Firefly said:
Is the point here that low interest rates are enabling people on low incomes to consume from loans / debt? Just asking, as the rest of your post sounds right to me.
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Yes, it is called credit expansion. A good idea when people are saving too much and have little debt.
A bad idea when people cannot save and are already in debt.
 
cremeegg said:
What TBS has identified is pressure on household budgets.
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True, this is more accurate. But it should, invariably, lead to wage increase demands.

cremeegg said:
Pressure on wages is when employers are feeling pressure to increase pay.
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Agreed.

cremeegg said:
That is not happening because Trade Unions are failing to do the hard work of organising outside the public sector.
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Agreed.

cremeegg said:
They would rather increase the pressure on household budgets by hitting the easy targets in the public sector.
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Disagree. The trade union movement in the private sector has been slaughtered not only in Ireland, but US and UK also.
It's not solely down to trade union incompetence, but more economic policy of individualisation, bought and sold through the never never credit expansion policy.

cremeegg said:
It a much easier life being a union organiser for nurses or teachers than for truck drivers or fast food workers.
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Perhaps, perhaps not. I do know that the trade unions would only love if private sector worker's started joining. But for many now, trade unionism is a dirty term. Like socialism in the US - couldn't even be discussed until the economy crashed and people like Sanders began to advocate for socialism
 
TheBigShort said:
I do know that the trade unions would only love if private sector worker's started joining.
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Brilliant, absolutely the best put down of Trade Unions I have ever heard.

Trades Unions, and so many others, would only love if the world was a better place, but they are unwilling to put in the effort to build a better world. I "would only love" if customers bought my services, its a bummer to have to go out there and sell them.

Recruitment is the TU officials job, especially in the difficult sectors.
 
TheBigShort said:
Yes, it is called credit expansion. A good idea when people are saving too much and have little debt.
A bad idea when people cannot save and are already in debt.
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Lower interest rates do obviously make it easier for people to borrow, but they still have to sign the dotted line, but I take your point.
 
cremeegg said:
Brilliant, absolutely the best put down of Trade Unions I have ever heard.

Trades Unions, and so many others, would only love if the world was a better place, but they are unwilling to put in the effort to build a better world. I "would only love" if customers bought my services, its a bummer to have to go out there and sell them.

Recruitment is the TU officials job, especially in the difficult sectors.
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I would disagree. Some 16% of private sector workers are in trade unions. Some 70% of public sector workers. Apparently, public sector workers have permanent pensionable, unsackable jobs - why would they need a trade union in first place?
Apparently, if you were to believe some of the posters on this site, private sector workers are faced with the gauntlet of facing the sack everyday they go to work. It's no wonder they have cowered, fear to stick their heads lest they face the gullitine. Yet, they cannot find common cause with each other, to know that solidarity has its strengths.

I am by no means a cheerleader for trade unions. I am a member, active in recruitment (on a voluntary basis) and promoting ideals of trade unionism. But I'm not naive to think that trade unions are not without flaws.
A good example of this is the (in)famous miners strike in the UK in the eighties. Considering where we are at now with climate change etc, Thatcher was right to shut down the mines. But she was wrong in the manner in which she went about it. She devastated mining communities, economically and socially, without little, if any, consideration as to what industries could replace the mines. Her attitude was to leave it to the 'invisible hand', to market forces to sort out. A gross and abusive misinterpretation of Adam Smiths philosophy.
The unions were however on a losing battle, as the industry itself faced depletion. The unions would have been better to agitate for massive social and education programs for the communities to look to the future.
One good example of looking to the future was the LUAS dispute. Without going through all the detail, the infamous 50% pay claim was actually based on deferred pay rises (arising out of the uncertainty of economic downturn) dating back to 2008. The employer, it transpired, was broadly unaffected by the downturn as profits rose and productivity targets were continually met and exceeded. Not only that, the company had plans for increased recruitment as its services were to be expanded. The 50% was for pay increases over a ten year period from 2008 to 2018. In the end the settled at 18%. Or 1.8% a year for ten years.

In summary, I don't know why private sector workers don't join unions, other than I suspect, trade unionism is perceived a dirty term in many (powerful and influential) quarters in this country. In such circumstances, it can be a hard sell.
 
The Luas dispute illustrated all that is worst in Trade Unions.

Luas drivers are grossly overpaid because they have a huge strike power. The TUs are happy to organise there because although not public sector workers they are in a position similar to public sector workers, they have the city at their mercy if they go on strike.

The TUs are happy to get pay rises for those who have strike power or an employer who has to attract votes, and to hell with the poor commuters who have to pay for the drivers over inflated salaries, and the tax payers who subsidise the show.
 
cremeegg said:
The Luas dispute illustrated all that is worst in Trade Unions.

Luas drivers are grossly overpaid because they have a huge strike power. The TUs are happy to organise there because although not public sector workers they are in a position similar to public sector workers, they have the city at their mercy if they go on strike.

The TUs are happy to get pay rises for those who have strike power or an employer who has to attract votes, and to hell with the poor commuters who have to pay for the drivers over inflated salaries, and the tax payers who subsidise the show.
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Except you are ignoring the point that the pay increases that the LUAS workers went on strike for were AGREED with their employer. Their employer won the tender for the LUAS contract, in part, because it AGREED it would it pay the drivers these amounts. It AGREED it would enter into negotiations with staff representatives every five years to discuss terms and conditions. That is how it won the lucrative contract.
But you think it's ok to renege on such agreements? The company is profitable, it is expanding, it's productivity targets are being met or exceeded. You think it's ok for it to withdraw from agreements?
 
I think that the Luas drivers get an excellent service from their TU.

I am suggesting that TUs like to enrol and represent workers with strong strike power, I observe that these are often, though not always, found in the public sector.

I think that TUs are not very motivated to organise among workers with little strike power.

I think this is why there is little upward pressure on wages in most sectors. As I said at the outset.

cremeegg said:
Pressure on wages is when employers are feeling pressure to increase pay.

That is not happening because Trade Unions are failing to do the hard work of organising outside the public sector.
Click to expand...
 
cremeegg said:
The Luas dispute illustrated all that is worst in Trade Unions.
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Why, because they provide an excellent service to their members insofar as protecting their end of the bargain as agreed?

cremeegg said:
Luas drivers are grossly overpaid because they have a huge strike power.
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The company they work for is profitable, it is expanding and it is meeting, if not exceeding, productivity targets.
The company has negotiated and AGREED with drivers the pay rates.
How have you come to the conclusion that they are grossly overpaid?
Clearly the employer doesn't think so, otherwise they would probably tear up the contract and pull out of Ireland?

cremeegg said:
I think that the Luas drivers get an excellent service from their TU.
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How do you figure that they have so much strike power anymore than workers elsewhere?
 
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