Ronan Lyons | Personal Website
Ronan Lyons | Personal Website

A Modest Proposal For Preventing the Foreign People in Ireland from Being a Burden to the Country

One of my favourite scenes in the Simpsons is a dialogue between Mayor Quimby and one of his advisers, as an angry mob of citizens outside chants “Down with Taxes! Down with Taxes!” but also refuses to countenance any reduction in public spending (in this instance on their new bear patrol). The Mayor asks “Are these morons getting dumber or just louder?” The aide responds: “Dumber sir, they won’t give up the bear patrol, but they won’t pay taxes for it either.” The Mayor thinks out loud to himself: “Ducking this issue calls for real leadership” before turning to the mob and saying: “People! Your taxes are too high because of… illegal immigrants, that’s right, illegal immigrants. We need to get rid of them!”

Limerick’s very own Mayor Quimby, Kevin Kiely, has been making the news this week for comments he made about non-Irish EU citizens receiving unemployment benefits. You can see the reaction not only on the internet forums but also in the national newspapers. Naturally, any sort of comment these days bringing up issues of nationality is likely to be portrayed as racist, but surely we should look at the numbers before casting judgement. After all, Ireland’s in a big hole, and if somehow breaking EU law and managing to deport all non-Irish were to save us an absolute fortune, surely that would be a good thing, right?

Unfortunately, there’s absolutely no evidence to back up Mayor Kiely’s Modest Proposal to prevent the Foreign People in Ireland from being a burden to the country. Here are the top three reasons why.

1. The number of new-EU workers signing on is tiny compared with the total numbers signing on. An average of 43,000 people from the new EU member states signed on during the third quarter of the year, compared to 350,000+ Irish signing on. Also, the problem looks to have turned a corner with the numbers signing-on falling every month since April. The graph below shows the “severity” of the problem – the red line is the one Mayor Kiely is worried about, just in case you’re wondering.

Number of Irish, "New EU" and others signing on, 2006-2009
Number of Irish, "New EU" and others signing on, 2006-2009

2. For every single unemployed Eastern European in Ireland, there are four times as many still working. According to the last Quarterly National Household Survey, only 29,000 were classed as unemployed, while 124,000 were employed. Not only that, they are a pretty self-regulating bunch, as large numbers have been leaving of their own volition over the past two years. The total number of new-EU, employed and unemployed, has fallen steadily every quarter since late 2007, and by 30,000 in total. There are now just 150,000 – mostly happily employed -new-EU members of the labour force in Ireland.

3. Lastly, the “new Irish” in total haven’t cost us a cent since they arrived, in net terms. In fact, they’ve made substantial net contributions to the Government finances, thereby easing the burden for Irish taxpayers.  Looking purely at the employment/unemployment numbers, and assuming their earnings profile is relatively close to the average manufacturing wage (which is lower than the economy-wide average), these people are currently “costing” the Exchequer about €32m a month in unemployment benefits. Meanwhile, they’re bringing in, through PRSI and income tax, somewhere in the region €75m a month.

It gets worse for Mayor Kiely. Summing up over the past 12 months, their contribution to the Exchequer has been about €1bn, while the Government has had to pay out about €350m. Perhaps, in some alternate universe, if there’d be 50 times as many of them (that’s right, if they’d doubled our population), we would have a problem and even then only a problem about as large as our government finances!

And that’s before taking into account things like the VAT the Goverment gets from their day-to-day expenditure. Or that the presence of 175,000 workers and their families has helped sustain Irish businesses that depend on consumer expenditure. Or any number of other factors.

Even looking crudely at just the Exchquer implications, though, the plain facts of this Modest Proposal speak for themselves: €350m out, €1,000m in, and that’s at the height of our recession. In Simspons language, I think Mayor Quimby will have to go back and have a long hard look at the Bear Patrol again.

  • Ronan Lyons ,

    On the validity of the assumption that new EU member state workers earn on average close to the industrial wage, people can have a look at ESRI research (e.g. http://ftp.iza.org/dp4260.pdf) which says that they earn about 18% less, controlling for all other characteristics.

    The average industrial wage is about 15% below the average wage nationally, so hopefully it’s not too far out.

    • Limerick Mayor calls for deportation of EU nationals - Page 22 - Politics.ie ,

      […] from a public finances point of view, workers from Eastern Europe have been good for the Exchequer. A Modest Proposal For Preventing the Foreign People in Ireland from Being a Burden to the Country | … Some quotes: 1. The number of new-EU workers signing on is tiny compared with the total numbers […]

      • Paul M. Watson ,

        Mayor Quimby indeed. I wonder does he realise the fear even uttering such nonsense generates. The sad thing is that simply by uttering it he has reinforced it in those who already think it and made it a question in the minds of those who don’t. Doesn’t have to have any basis in fact to have effect.

        (I’m a South African working in Waterford. Still got a job, paying my taxes, buying from Irish stores, funding NAMA.)

        • Colm Green ,

          Good man ronan.

          • Donal O'Brolchain ,

            Ronan,
            Well done. This is a great contribution to
            having a civlised debate – teasing out the truth or otherwise of assertion

            Would you please send your comments as a personal letter to Mayor Kiely here

            Mayor’s Office
            Phone: (061) 407347
            Fax: (061) 407158
            email: mayor@limerickcity.ie

            and all national elected representatives, through their Dáil email addresses?

            • kevin denny ,

              That Simpson’s episode should be on every public economics course because it is very pertinent. And funny, as the emigrants are deported by Chief Wiggum, the locals hold placards proclaiming “United States for the United Statians”. I remember Evan Davies, BBC’s economics correspondent, singling it out for its insight.
              Even more lastly..an important argument is the “instant adults” one: they contribute to the economy and we didn’t have to pay for their education/upbringing etc.
              That said, there are interesting issues about the effect of immigrants on the host economy and the benefits depend on who you are. There is no point in pretending that everyone benefits. They do tend to depress wages at the lower end- its competition – but if the services they produce are a big share in your basket of goods (i.e. nice middle-class people) then your real wages rise. George Borjas’ book “Heavens door” is very good on these issues.

              • John O'Connor ,

                Ronan,
                Fantastic reasoned response to what is a bit of a voodoo doll subject

                • Donal O'Brolchain ,

                  @kevin denny
                  Good points about the economic effects.
                  What about the positive effects over time – a different way of looking at things, perhaps some level of doing things differently – all part of the adaptation and change that societies make.
                  Patrick Pearse’s father was English, de Valera’s father was ?, Lemass was a Huguenot name, Guinness ???, soccer players ?
                  I welcome immigrants for these reasons in addition to recognising that Irish emigrants had equally tough reception in many of the places they emigrated to.
                  What if the US took a similar hard line to our illegals – which many immigrants here are not?
                  Sauce for the goose, sauce for the gander….

                  • Senan ,

                    Agree with you Ronan.

                    If this country aspires to growth we need every worker we can get our hands on. We need a young country, not an ageing one. These foreigners are predominantly young. In order to pay pensioners their due one week, enough must be collected through tax the previous (notwithstanding borrowing instead). For this we need labour of all shapes and sizes.

                    We cannot simply ignore the contribution of these people, or for that matter blame them for our troubles, now that we find our ruling and leadership class has made so many fiscal mistakes.

                    • Embarassed, NI « A Life in Beta ,

                      […] As always of course – and I do recognise this – much of this is the work and views of a small(ish) minority – most of my fellow countrymen and women recognise that we know as much as any nation about the challenges of settling in foreign lands or the hospitality afforded to our people by foreign governments as a consequence of our own diaspora throughout the late 19th and 20th centuries. We are, in the main, a warm and hospitable people who recognise the obligation on s to provide refuge to those who cannot find it elsewhere but also the merits of managed and facilitated immigration. […]

                      • Derek ,

                        Love your site, well done.

                        • Jack Onek ,

                          I am unpleased to read the article but all in all that was about what he means without mentioning positive thing that the immigrant themselve contributed to the state.

                          • Niall ,

                            Hi,

                            Very good article,

                            Your article though is missing something that should be brought into the equation:

                            It fails to mention the amount of immigrants, both unskilled and skilled, that are working here in Ireland, literally, as the saying goes, ‘taking our jobs’. The economic effects, I think, which, is best explained by an example:

                            Susan is a qualified Nurse, she has just graduated and found herself unemployed, thus she has joined the dole. She is also capable of doing the same job as an employed foreign nurse

                            This means the government is now paying a foreign nurse and an unemployed nurse.

                            Regards

                            Niall

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