Guest post by Dr Rory Hearne
In an effort to highlight what are the potential real human and economic impacts of some of the proposed December budget cuts I asked a few young women on the FAS-funded Community Employment scheme in the area where I work if they would tell me their approximate weekly income and expenditure.
One woman, with three young children, explained that her total weekly income is €517. That included a ‘double payment’ of €305 a week from FAS and €212 from Social Welfare. Her total weekly basic expenditure, at the minimum, is €461. This included €90 a week on the crèche, €25 on bus fare, €38 on rent, €30 on ESB, €30 on Gas, €200 on food shopping, not including kids lunches, €20 on mobile phones, €28 a week on football and other kid’s training costs. That leaves €56 at the end of the week. The other women were in similar situations. Another woman, for example, with two kids, had a weekly income of €405 (FAS and Social Welfare). Her basic expenditure was €385 including €60 a week on the crèche, €50 on rent, €30 on gas, €30 on ESB, €50 on travel, €150 on food shopping and €15 for mobile phone. Leaving her with a tiny sum of €20 euro to spare at the end of the week.
These people are finding it extremely difficult to survive at the moment on their low incomes. Just think about it. How do they afford additional costs of clothes, shoes, pharmacy medicines (not always covered under medical card), additional bus and rail travel, birthday parties, Christmas? Not to mind what many would consider basic things to do and have, such as going out for a meal or a trip to a leisureplex an odd time. They spoke similarly of the difficulty of paying for activities for their children - boxing clubs, dancing, football – which could cost anything from €40 to €50 a week. Even if these overall income and expenditure figures approximated to the truth, it demonstrates two things.
Firstly, further cuts in social welfare in the budget or increases in gas and ESB prices will have a terrible human impact. Those on such low incomes will ‘get by’ only with huge difficulty. As a result, and already we are witnessing as Christmas approaches, the use of money lenders is on the rise. Their grip of harassment and intimidation hanging over a family can be devastating.
Secondly, it provides strong supportive evidence to the argument that cutting welfare spending directly impacts on economic growth. Look at the areas of expenditure of these welfare recipients. It is on the local crèche, the local authority, Bord Gais, ESB, Dublin Bus, local and larger supermarkets, phone companies, local sports organisations etc. It is all being spent directly in the Irish economy. Indeed much is on the state and semi state sectors.
A notable double-edged sword for the Irish state is that the local authority rent is set according to the individual’s income so if their welfare payment is cut the local authority’s income will be reduced, requiring further subsidy from the state. The state thus cuts itself.
Another point that these figures raise is that the reduction in income will mean a reduced spend on the services being provided in the communities they live in – such as the crèche, local shops and sports organisations etc – so the retrenchment will hit the lower income sections of our society at two levels: as individuals experiencing a reduction in direct income and, as local areas, geographically. This is because lower income areas will have less spent in those areas after the budget as the individuals living in them experience income reductions. Thus the poor and vulnerable get disproportionally affected on multiple scales.
Interestingly it highlights also the important role of social housing. With significantly higher rents these people would simply not survive financially.
From a human perspective, how will children growing up in this household feel? The poverty causes depression. There is the stress of not being able to provide a ‘proper’ birthday party and presents or a ‘good’ Christmas. Where is the money to give to the teenagers for a new top or for the cinema? How stigmatised will those teenagers feel as a result? What social impacts will this have on mental health, on youth anti-social behaviour, crime, vandalism, education drop out? What wider costs will this have to Irish society and the economy?
The so called ‘double payment’ as part of FAS’ Community Employment scheme clearly plays a vital role in the lives of these individuals, and therefore, should not be cut in the budget. The schemes also provide much needed support in these communities in service provision providing employees for homework clubs, crèches, senior citizen support and others.