Indo - "There is no cost of living crisis for majority of people in Ireland says IBEC CEO"

[odyssey06]

I wouldn't call it significant but that notwithstanding being able to save less doesn't mean your household is experiencing a cost of living crisis, it means that it has less of a surplus

It's a cost of living 'something'. Based on the dictionary definition it is a crisis, it is both negatively affecting significant numbers of people and it is a turning point in terms of trends for the future. So arguing the semantics of 'crisis' is a dead end.

What matters is that they all point to a real trend, along with the other indicators cited on the thread, and why government measures were needed to mitigate it or the impact of it would have been more severe.

Households should be saving and need to save.
We see grocery bills up by thousands of euros a year. Health insurance up by way more than inflation. And the base inflation rate on groceries is based on a cherry-picked basket of goods, the real impact is likely to be higher eg own brand products increasing in price \ disappearing, less offers and discounts.

 

[faketales]

Basically, rents in Ireland should be below the levels in very rich cities, and below the levels in world-level cities.

Do they also have crises?

€1,600 was the market rate in 2017 for a two bed in D6.

One beds started at about €1,100 but you probably had to pay closer to €1,300 to get something ok.

I know wages have increased but that was still considered expensive.

 

[Purple]

Do they also have crises?

They may just have a problem.
Their tsunami's may just be waves and their epidemics may just be worrying trends.
Most European Countries have been through at least one World War. They know what an actual crisis looks like.
Back in the 1930's, 40's and 50's when we had mass emigration, decades of reductions in real wealth, TB and high infant mortality rates and abject poverty the folk memory of the Famine was still alive so problems and challenges weren't disasters and crises.

 

[Protocol]

Mary Lou did actually call it at the average house in Dublin to be 300k.

SF have a plan to build 8,000 affordable houses at this price.

This does not mean that overall average house prices would be 300k.

 

[Purple]

It's a cost of living 'something'. Based on the dictionary definition it is a crisis, it is both negatively affecting significant numbers of people and it is a turning point in terms of trends for the future. So arguing the semantics of 'crisis' is a dead end.

What matters is that they all point to a real trend, along with the other indicators cited on the thread, and why government measures were needed to mitigate it or the impact of it would have been more severe.

Households should be saving and need to save.
We see grocery bills up by thousands of euros a year. Health insurance up by way more than inflation. And the base inflation rate on groceries is based on a cherry-picked basket of goods, the real impact is likely to be higher eg own brand products increasing in price \ disappearing, less offers and discounts

We spend well over a half a billion Euro a year on take away coffee and the market is growing. Sales in bars, seasonally adjusted, are up 8% in Q1 year on year. I'm just not buying the motion that there's a national cost of living crisis. It's certainly a crisis for some people, but not for the vast majority.

 

[T McGibney]

I'm just not buying the notion that there's a national cost of living crisis. It's certainly a crisis for some people

Ahem.

 

[Premos]

While I do consider that the rental sector is in crisis, I would not consider that there is a cost of living crisis. A portion of the population is really struggling but a large remaining majority is popping along... Life is expensive and some period in life are easier than the others. An article in the Irish Independent today claiming Irish are among the richest in Europe...

 

[Purple]

SF have a plan to build 8,000 affordable houses at this price.

Plans are great. They always actually happen. That's why we have a Metro in Dublin, a fully computerised and integrates IT system in the HSE, and we're building 50,000 homes a year.

Oh, wait...

I know, let's change the Party in charge but none of the other factors which cause the waste, delays and abject failures. That'll sort things out.

 

[Purple]

An article in the Irish Independent today claiming Irish are among the richest in Europe...

It's more pointing it out than claiming it.

 

[odyssey06]

We spend well over a half a billion Euro a year on take away coffee and the market is growing. Sales in bars, seasonally adjusted, are up 8% in Q1 year on year. I'm just not buying the motion that there's a national cost of living crisis. It's certainly a crisis for some people, but not for the vast majority.

Are the "vast majority" of people the ones splurging on take away coffee and bars?
Such isolated figures cannot speak to the experience of the vast majority of the people, all it can establish is that there is a cohort with money to spend.
Regardless, it doesn't have to affect the vast majority or even the majority for it to be a crisis.

In the Irish Times article I linked from 2024 economist Austin Hughes used the phrase "a cost-of-living shock".
Depending on how the strength of your financial position the impact of that shock is what turns it into a crisis.

The CSO’s household budget survey for 2022/23 shows that weekly spend by those in the top 20 per cent of households was four times that of those in the bottom 20 per cent (€1,757 v €444), suggesting “altogether different capacities to cope with a cost-of-living shock,” Hughes says...
The average household has seen a drop in its disposable income, in real terms, of about 5 per cent...
Median annual earnings of employees increased a cumulative 6.5 per cent between 2020 and 2023 while the cumulative increase in consumer prices over the same period was 17.3 per cent.
Despite citing these figures, Hughes says there is a central problem in economics about using average or median figures. “The idea that there is a ‘representative’ Irish consumer whose experience is mirrored across all households is not challenged enough,” he says.
“If you’re on the minimum wage, your household spending is not the same as the average consumer. The amount you spend on food, heating, rent is altogether greater so your cost-of-living has increased more significantly,” he says.

Is Ireland’s cost-of-living crisis over?

Inflation has fallen back to target, but prices remain much higher than three years ago

www.irishtimes.com

 

[faketales]

SF have a plan to build 8,000 affordable houses at this price.

This does not mean that overall average house prices would be 300k.

Mary Lou McDonald: Sinn Féin leader says average Dublin house prices should fall to ‘the €300,000 mark’

Sinn Féin leader says her party’s economic policy in government would not be ‘pulling rabbits from hats’

www.irishtimes.com

Mary Lou McDonald shifts on €300,000 target for average Dublin house prices

Sinn Féin leader says party would sell affordable homes for that figure rather than aim to lower average price

www.irishtimes.com

Don't really want to get political but it was one of the only times I have seen a number put on what could be considered an end of crisis free market rate. Although it was either wrongly reported or backtracked.

 

[Purple]

Are the "vast majority" of people the ones splurging on take away coffee and bars?

I don't know but the national trend is upwards.

Such isolated figures cannot speak to the experience of the vast majority of the people, all it can establish is that there is a cohort with money to spend.

Exactly, just as an increase in the cost of groceries doesn't mean such an increase is a problem for everyone.

Regardless, it doesn't have to affect the vast majority or even the majority for it to be a crisis.

Okay, so is flooding in Cork City a crisis in Cork City or a national crisis? Should we spend money for flood defences for every town and city in Ireland or should we spend it on Cork City and other cities and towns which data shows to have a similar risk of flooding?

In the Irish Times article I linked from 2024 economist Austin Hughes used the phrase "a cost-of-living shock".
Depending on how the strength of your financial position the impact of that shock is what turns it into a crisis.

The CSO’s household budget survey for 2022/23 shows that weekly spend by those in the top 20 per cent of households was four times that of those in the bottom 20 per cent (€1,757 v €444), suggesting “altogether different capacities to cope with a cost-of-living shock,” Hughes says...

See above ref flooding.

The average household has seen a drop in its disposable income, in real terms, of about 5 per cent...

Yes, that's why they are saving a bit less.

Median annual earnings of employees increased a cumulative 6.5 per cent between 2020 and 2023 while the cumulative increase in consumer prices over the same period was 17.3 per cent.

A 605% increase in a big number and a 17.3% increase in a much smaller number.

Despite citing these figures, Hughes says there is a central problem in economics about using average or median figures. “The idea that there is a ‘representative’ Irish consumer whose experience is mirrored across all households is not challenged enough,” he says.
“If you’re on the minimum wage, your household spending is not the same as the average consumer. The amount you spend on food, heating, rent is altogether greater so your cost-of-living has increased more significantly,” he says.

No household is living on the minimum wage.

 

[Purple]

Don't really want to get political but it was one of the only times I have seen a number put on what could be considered an end of crisis free market rate. Although it was either wrongly reported or backtracked.

My recollection was that it was the latter. Mary Lou accidentally said something socialists and was put back in her box by her Party Leaders in the UK.

 

[odyssey06]

Exactly, just as an increase in the cost of groceries doesn't mean such an increase is a problem for everyone.

That would imply there can only be a crisis if 100% of the population is impacted.
The macro crisis\shock is that the cost of groceries is going up for everyone, and the different impacts that has, for some it is a bigger problem (micro crisis) than others (those who can weather the shock).

Okay, so is flooding in Cork City a crisis in Cork City or a national crisis? Should we spend money for flood defences for every town and city in Ireland or should we spend it on Cork City and other cities and towns which data shows to have a similar risk of flooding?

(Neither - it's Cork. Well maybe we'll have to build a wall around it.)
It's a national crisis requiring a national level response - either because of the severity of the impact in some locations and\or the widespread negative impact on a broader front. That doesn't mean every part of the country is equally affected or that all are affected.

Edit - You don't just spend it where's there are problems. You should try tackling root causes - both because it is cheaper and may have wider benefits to society. Specific mitigation measures in hardest hit areas may be needed.
In cost of living terms, that means looking at why they are going up instead of pretending nothing needs to be done because of semantics over the word 'crisis' as McCoy seems to suggest - or maybe he was just trying to get help for SMEs only, hard to tell through the waffle.
Prices are going up, food prices especially more than the base rate of inflation. Is there a lack of competition somewhere in the chain and companies are taking advantage of the price increases?
Ditto for energy prices etc

Instead, if we took the line McCoy took, it's not a crisis because only 10% of the country is under water. And it ignores what happens the next 10% and the next 10% of the country if trends continue and are not halted or reversed.

 

[odyssey06]

No household is living on the minimum wage.

I'm sure you have figures to back that up to contradict economist Austin Hughes, whether that's the actual minimum wage or equivalent amount in benefits.

 

[Premos]

Median annual earnings of employees increased a cumulative 6.5 per cent between 2020 and 2023 while the cumulative increase in consumer prices over the same period was 17.3 per cent.

Since then, the median income has continued to increase while the rate of inflation has reduced, the average weekly earning increasing from about 800 to over 1000 (q1 2020 to q1 2025). Over the period, the level of inflation is about 22 per cent.

 

[odyssey06]

Since then, the median income has continued to increase while the rate of inflation has reduced, the average weekly earning increasing from about 800 to over 1000 (q1 2020 to q1 2025). Over the period, the level of inflation is about 22 per cent.

Run the figures again in 3 months and inflation may have surged ahead.
Regardless, I don't see how it is good for our economy \ competitiveness in the long run to be caught in such a cycle.
As noted with regard to savings this seems to be affecting us more than EU peers (going from above average savers to below average savers).

 

[T McGibney]

semantics over the word 'crisis' as McCoy seems to suggest - or maybe he was just trying to get help for SMEs only

I suspect that Danny, God bless him, wouldn't know an SME if one of them bit him on the bum.

IBEG have bigger fish to fry than common SMEs.

 

[Purple]

Instead, if we took the line McCoy took, it's not a crisis because only 10% of the country is under water. And it ignores what happens the next 10% and the next 10% of the country if trends continue and are not halted or reversed.

If we took the line McCoy took we'd target the people who need the help, rather than give less to them and the rest to people who don't need it.

 

[Purple]

I'm sure you have figures to back that up to contradict economist Austin Hughes, whether that's the actual minimum wage or equivalent amount in benefits.

I've reality; we have a very generous welfare system. It's easy to calculate the income of a family reliant entirely on welfare or with one earner on the minimum wage, along with the significant additional benefits they get. I'm not saying that anyone in that situation is doing well, I'm saying that accuracy matters.