THERE IS strong anecdotal evidence Ireland’s black economy is growing and there is pressure in society to pay people “under the counter”, according to Minister for Social Protection Joan Burton.
Ms Burton has told The Irish Timesthat since becoming Minister, she has heard a substantial amount of anecdotal information about the return of the black economy.
She said a “wholesale return” of the black economy that Ireland had in the 1980s would be a disaster, socially and economically.
It was one of the reasons she cited for deciding to introduce new rules where people on unemployment benefits will face financial penalties for the first time if they consistently refuse to take up offers of training, education or course placements.
Ms Burton said the labour market activation measures were one of the key conditions insisted on by the International Monetary Fund when drawing up the rescue agreement for the State. She said that part of the major reform of the social welfare system would be to offer meaningful options and alternatives to those who are out of work.
“If they are offered a series of options and show no sign of taking up the offers, then their payments should be penalised,” she said.
“It is not acceptable especially for young people . Welfare should not be considered a lifetime option.”
On the black economy, she said: “Since I became Minister, it is something that has been mentioned with an enormous amount of frequency by people in all walks of life – from employers, to individuals, to people getting jobs done in their houses. There is pressure to pay people under the counter,” she said.
She said that a move towards a black economy is to be expected as a feature in a recession.
“It’s to be expected that a black economy can be a feature in a recession. If a parallel black economy goes back to the level of the 1980s, the efforts of the Government to recover the economy will be undermined,” she said.
Ms Burton said that the economy was comprised of two sectors. While internationally traded goods and services was doing well, the domestic economy was in recession.
“That is where the black economy could have a very negative effect. We want to get more people in the country back to work in shops, services, manufacturing, tourism and construction.
“The Government is working very hard in relation to its jobs initiative. If people are offered a series of options and refuse, then the question arises what are they doing with themselves that makes no option acceptable?”
Ms Burton said that the reform of the Department of Social Protection would lead to a holistic service being offered.
She pointed to 1,000 community welfare officers being transferred to social protection; her department taking on the employment side of Fás; and the department’s new responsibility to provide local employment services and oversee community employment schemes.
The Economic and Social Research Institute has also provided research assistance to the department in helping it build up more thorough profiles of those on unemployment benefit, including education qualifications and work experience.
She said it would allow the department to do more accurate profiling for courses and options.
Asked if penalising social welfare recipients who refused offers went against Labour Party principles, she said the party’s core principle was about work, people making a contribution and the State stepping in to support them when they were ill, lost their jobs, or retired.
She said she did not see that applied in the case of young men leaving school early to drift into a lifetime of the dole and unemployment. “That is not in their interest or in the interest of their partners or their parents or children,” she said.
She said the changes would be a major cultural shift for some people but it would be a positive one that would allow people get off the dole.
“Most people are desperately anxious to find a job,” she said.
