Notes on the Front

Question: which European country has the highest level of child income payments while at the same time having one of the highest levels of child poverty? Yes, Ireland. And what countrries have a below-average level of child income payments and yet has one of the lowest levels of child poverty? Yes, Denmark and Sweden. Curious?

That’s the conundrum of child poverty.

Ireland pays out more child income support than most other EU countries – ranking third among EU countries (given that the comparative data relates to 2001, Ireland could easily be first with the large increases since then, including the new Early Childcare Supplement).

However, Ireland’s record on child poverty is rather more depressing. More than one-in-five children are at-risk of poverty while slightly more than 10% live in absolute poverty – a category that not even Minister Seamus Brennan can deny. Ireland has more child poverty than almost any other EU country.

So, if we spend so much on child income support, why the high level of poverty? The ESRI subjects this question to an in-depth analysis, pointing out that by focusing on child income supports (e.g. Child Benefit, Child Dependency Allowances) we overlook the impact that deficient social welfare rates for the unemployed, lone parents, the disabled etc. have. The issue, therefore, is not how much child income support a household receives but rather how much total income supports it receives. In other words, we spend a lot on child income supports to reduce poverty but not very intelligently – while overlooking other instruments that could secure the same goal.

That is the first part of the equation – ensuring that all households (for children live in households) receive social transfers to bring them above the poverty line.

The second part of the conundrum is the subject of the joint study by Open and the European Anti-Poverty Network which analysed the plight of social welfare recipients entering the workforce. Of course, by raising social welfare rates, we can help lift people out of absolute poverty. But people want to work to increase their living standards, to be engaged, to participate. The problem is, we make this difficult, if not impossible, for many.

To put it simply, it is economically more rational to remain on social welfare than to venture into the labour market. That is due to the high levels of low-pay combined with the anorexic character of the welfare state that sees social protection as a last resort safety net rather than an instrument of economic security and enhancement.

Let’s examine some of these structural barriers to entering the workforce:

Low-Pay: With Ireland leading the EU in low-pay, it’s not surprising that working families find it difficult. For many, especially lone parents, part-time work is the preferable or only option. Yet sustained wage discrimination against part-timers means they are likely to earn up to 30% less per hour than their full-time counterparts in the same firm. For many, work doesn’t pay. Consequently, their children live in poverty.

Childcare: the lack of a subsidised childcare network incurs an enormous expense – up to 1/3 of a gross wage. If access is limited (most private crèches, like GP surgeries, are not surprisingly located in upper-income areas where the parents can afford it) there may be no option but to forgo work.

Medical Cards: moving from social welfare to work means the loss of free primary health care. While there are transition periods in place (former social welfare recipients can retain their medical cards for up to three years), the long-term uncertainty and eventual cost can become one more barrier.

Rent Supplement: if parents are living in rental accommodation, moving into work could mean the loss of over €100 per week when the rent allowance is withdrawn. For many, that alone constitutes an almost insurmountable barrier.

Lack of Family-Friendly Working Time: In most workplaces the amount of leave a parent can take to care for an ill child or relative is dependent on the goodwill of the employer. For many, this means no leave at all resulting in temporary withdrawals from the labour force.

On-going Education: Between working a low-waged job and caring in the home, who has time to engage in on-going education? All the research shows this is the route to a better living standard (and more productive workplace), but there is no framework within which this can be integrated into people’s working life without loss of income.

These are only a sample of the structural problems plaguing our neutered welfare state and a worker-unfriendly labour market. Higher wages, free health care, affordable childcare, reformed housing allowances, family-orientated flexi-time, on-going education – the societies that have tackled, if not completely overcome, these issues are less likely to experience poverty and, in particular, child poverty.

Of course, confronting these problems would have wide scale repercussions throughout the economy. For everyone would benefit. Most of these reforms could not be means-tested or easily targeted (in any event, why would you means-test on-going education?). So systematic, so thoroughgoing would these reforms be that they would overturn many of the tenets of the neo-liberal economic structures now in place. But also, so popular and economically beneficial.

To tackle child poverty, therefore – at the level of redistribution and reform of the labour market – constitutes an agenda that would include all working families. In this way, poverty can become everybody’s concern.

That’s the first step in solving the conundrum.