OF ALL groups, politicians are arguably most closely tuned in to the silent crises erupting across middle-income Ireland – the coping classes are, after all, the voting classes.
There isn’t a TD in Leinster House who hasn’t come across heart-wrenching tales of constituents struggling against the odds to make ends meet. However, talking to backbenchers of all parties this week, it’s hard to find optimism for the future among those whose work it is to listen to constituents’ problems. Coming up with solutions to restore the confidence of ordinary citizens is even more difficult.
“For so many, it’s a weekly scrabble to find the last euro to pay the bills,” says Labour backbencher Joanna Tuffy, whose constituency is home to thousands of “beltway” families in west Dublin. “The people in the middle of society are really struggling. They don’t have the back-up, they don’t have a social welfare network to avail of and they don’t know who to turn to.”
The boom years saw the introduction of many measures that appeared to buttress the position of the middle classes. Rising property values affirmed their belief in home ownership, SSIAs rewarded them with an unasked- for windfall for saving and the abolition of third-level fees lifted the financial burden of sending their children to college.
Now the politics of boom have been replaced by the politics of living standards. Higher taxes and a raft of new charges are eating into the financial comfort zone middle earners used to enjoy. Many are beset by negative equity or marooned in the private rental sector. For others, unemployment is a grim reality or an imminent threat.
According to Ictu economist Paul Sweeney, today’s young may be the first post-war generation not to achieve a higher standard of living than their parents.
Long-time Fine Gael TD Olivia Mitchell used to receive a handful of social welfare queries a month from the generally comfortable residents of Dublin South, “but now that’s virtually all I get”.
While people on social welfare are no worse off than they were and older people are “getting along, by and large”, she says, the middle-age, middle-income bracket is “really suffering”. She gives examples of couples in their 30s who bought expensive apartments in which they are stuck, even though they now have children. “For them, life is crap and they have no foreseeable way out of their quandary. Their life is filled with uncertainty and they’re certainly not in the space they intended to be.”
The most extreme difficulties are faced by wage earners coping with disability in the family, or a long-term illness, whose income puts them just over an entitlement to a medical card. “There used to be flexibility in deciding whether they were entitled to a medical card, but that’s all gone now.”
Tuffy says she differs from many party colleagues who focus more on “helping the poor”. “In Ireland, the middle classes are often debated in derogatory terms, but in the US they are viewed in a positive light. Often, when we’re talking about the middle classes, what’s really being referred to is the wealthy.”
This prism affects the debate on many central issues, she adds, such as third-level fees. Thus, instead of being seen as a right, free access to university is seen as an unwarranted boost for middle earners. “Many of the people I’m seeing are above the social welfare supports, but even if they aren’t, they’re not aware of what they are entitled to.”
Meanwhile, the squeezed middle is especially hard hit by the household charge, increases in VAT and the increase in the third-level student contribution. Many in this group have substantial, unmanageable debts but plough on trying to make their mortgage payments because they don’t know any other way to do things, she says.
Fianna Fáil Senator Thomas Byrne has similar tales of hardship from the commuter belt he represents in Meath. “Because of the recession, people are leaving earlier in the morning, coming home later and struggling more than ever to meet the costs of having their children minded.”
Ironically, parents who in the past would have stopped work to mind children are opting to stay working because the economic outlook is so insecure.
Tuffy’s outlook is informed by personal experience of growing up during our last recession in the 1980s. Although her father worked as a lecturer, the family was financially crippled by the costs of sending four children to college. If anything, things are worse now, she believes, because of the difficulty of getting credit.
For middle earners with a family, she says, child benefit is crucial for getting by. “You get paid the same wages and pay the same tax, whether or not you have children. That’s why child benefit is so important.”
Within her party, Tuffy lobbies for measures to create greater income equality, citing international research that says more equal societies function better. “Labour lost the argument about taxing wealthier people before the last budget but it cannot afford to do so in future budgets. Everyone should have to pay a certain minimum proportion of their income in tax.” Instead of removing services from wealthier people, the State should force them to pay more income tax, she believes.
Fianna Fáil Senator Averil Power (above), while critical of Government policy, says a sense of balance is called for. “We do have a lot going for us. A huge part of it is confidence.”
Mitchell agrees, saying the political solution lies in restoring the confidence of the squeezed middle by putting the economy on the “up graph”.
Political solution: Protecting the middle
INDEBTEDNESSThis is single greatest challenge facing the coping classes. It is financially crippling households and preventing them from spending.
IMAGINATIVE SOLUTIONSJoined-up thinking is required to help free people from their debt burdens, says a range of backbench politicians. Most of all, people need a structure or framework with which they can engage.
PROPERTY MEASURESMany holders of tracker mortgages are unable to move. because they would lose their lower rate of interest. Can a way be found to incentivise them to re-enter the housing market?
HELP AND ADVICEServices such as Mabs need to be expanded or reoriented to capture the new poor in coping households.
LEADERSHIPMost of all, the job of government and politicians is to instil confidence and hope in the future.
