National Economic Social Council NESCNESC

Can the Celtic Tiger Change its

Stripes?

Reflections on NESC Report No. 113 (May 2005), The Developmental Welfare State

John Sweeney

Plan of Presentation

1. The outcomes eluding our social policies and welfare state

2. Can welfare state ‘models’ help us?

3. Should we blame the Celtic Tiger … or learn from it?

4. How do we attain the outcomes eluding us?

Plan of Presentation

1. The Outcomes Eluding Us

1.1 Significant minorities in Ireland’s population are still experiencing one or multiple forms of socal disadvantage, and present strategies and policies are not proving adequate in helping them.

1.2 Significant numbers of people at work are not getting the access to services they need if they are to retain the lifetime employability, flexibility and adaptability required of a workforce in an internationalised economy.

1. The Outcomes Eluding Us

1.3 Values are changing, standards are rising, and attitudes and expectations are different, with respect to what constitutes acceptable provision for persons vulnerable to social exclusion, for whatever reason.

1.4 Ireland is being called by its economic success to improve its social supports across their entire spectrum, but in a manner aligned with the characteristics of its economy.

Conventional analysis of Welfare States … and of the components of Ireland’s Welfare State

Universal Insurance

Residual

2. Welfare State Models

2.1 First overarching strategy: keep state social spending for those who really need it - build a liberal, anglo-saxon welfare

regime more decidedly.

- we are not, and have not been, committed to this strategy

- we are already the most targeted welfare state in the EU 15, and cannot be impressed with the results

- the middle class is a major beneficiary of current public social spending … and will not be denied

2. Welfare State Models

2.2 Second overarching strategy: develop social insurance further –make contributions easier - widen entitlement, reduce means-testing

- levying payroll taxes endangers jobs of lower productivity and the employment prospects of those who seek them

- core Eurozone economies are not surmounting a major divide between labour market insiders and outsiders

- Ireland has had balanced employment creation (by skill level), improved employment standards, and has low tax on low earnings

2. Welfare State Models

2.3 Third overarching strategy: provide more social protection unconditionally to people as citizens – emulate the Nordic welfare states more decidedly

2. Welfare State Models

- we cannot ‘cherry pick’ – a Nordic-style welfare state means Nordic-style taxation, local government, conditionality, and

some of their “ills”

- the Nordic welfare states are themselves undergoing extensive reforms

- Ireland’s experiences with univeralism to date have been expensive, and the outcomes are ambiguous

3. Blame the Celtic Tiger or Learn from it?

Rather than blame our strong economic performance for unacceptable social outcomes, we should learn more from how we achieved it

Previously, economic underperformance set limits to our social objectives. Going forward, social underperformance will set limits to our economic objectives

Much higher spending is taking place in practically every social area, but the improvements in outcomes are not commensurate

3.1 Our economic performance is more part of the solution than of the problem

3. Blame the Celtic Tiger or Learn from it?

3.2 We need better analyses of many social outcomes. Examples:

- relative social spending that is related to GNP and adjusted for population structure

- analysis of what is driving median income as much as of those falling below proportions of it

- analysis of welfare arrangements as much as of welfare rates

- a greater awareness that children are poor because their households are poor

3. Blame the Celtic Tiger or Learn from it?

3.3 We need improved, longer term social policy making

3.4 We need better governance and stronger leadership in delivering on agreed strategies

- less ‘stop-go’ spending, more consistency, assured

responses to analysis

Annual Growth in Equivalised Disposable Income in Real Terms: Ireland and Sweden, Mid-1990s to 2000

1.3

2.7

4.5

Bottom 2 deciles only Middle 6 deciles Top 2 deciles only

5.2

7.7

5.4

Ireland Sweden

Developmental Welfare State, p. 126

3. Blame the Celtic Tiger or Learn from it?

19.3

13.4

5.6

18.9

12.4

7.4

0

5

10

15

20

25

Per

cent

1980 1990 1999

“Benefit Dependency” changing not reducing

Developmental Welfare State, p.53

-10

-5

0

5

10

15

20

25

Dublin Mid East South East South West Mid West West Border Midlands

Region

Ab

so

lute

Dep

rivati

on

Sco

re (

Cen

su

s D

ata

)

2002

1996

1991

A Rising Tide Lifts all Boats?

Haase, T (2005), Deprivation and its Spatial Articulation in the Republic of Ireland

A new basic architecture to Ireland’s Welfare State

Services Income supports

Activist measures

“The Developmental Welfare State”

4. How do we attain the outcomes eluding us?

A new basic architecture to Ireland’s Welfare State: 1

the ‘Services Dividend’

Services

Education

Health

Childcare

Eldercare

Housing

Transport

Training

Employment services

Accountable autonomy

Diverse provision

Tailored universalism (not ‘dualism’)

Government guarantor of levels, access, standards and equity

4. How do we attain the outcomes eluding us?

 

Former Welfare State Developmental Welfare State

Chronic Labour Surplus Strong Aggregate Labour Demand

Selective labour market Inclusive labour market

Discourse of difference Discourse of sameness

Small group identification Wide group belonging

Social inclusion Social cohesion

Targetted measures Support services

‘Paradox of redistribution’ ‘Budget stakes principle’

From Targeting to Tailored Universalism

4. How do we attain the outcomes eluding us?

A new basic architecture to Ireland’s Welfare State: 2

‘income necessary but not sufficient’

Income supports

Progressive child income supports

Minimum pension guarantee; Capped pension tax expenditures

Working age ‘participation packages’

Social Insurance

Social Assistance

Tax expenditures

Child benefit

4. How do we attain the outcomes eluding us?

 

The “Golden Triangle” of Flexicurity 

ALMPsGenerousWelfare

Schemes

Flexible Labour Market The qualification

effect of ALMPs

The ‘threat’ effect of ALMPs

The ‘lubricant’ effect of RRs

 

4. How do we attain the outcomes eluding us?

A new basic architecture to Ireland’s Welfare State: 3

‘R & D’

Social Innovation

Evaluation and mainstreaming

‘Schemes’

Area-based measures

‘New’ C & V

Novel/contestatory approaches

Particular community/group projects

Accountable autonomy

4. How do we attain the outcomes eluding us?

Monitoring progress towards the Development Welfare State 

Who? What? How?

Integration of services, income

support and activist measures

Governance and leadership

Standards and rights

Ages 0-17: children and young people 

     

Ages 18-29: young adults 

     

Ages 30-64: ‘anchor’ adults 

     

Ages 65+ 

     

People challenged in their personal autonomy

     

 4. How do we attain the outcomes eluding us?