NESC Publishes Council Report 134: The Social Dimensions of the Crisis: The Evidence and its Implications

NESC Publishes Council Report 134: The Social Dimensions of the Crisis: The Evidence and its Implications

14 May 2013

Dublin, Ireland

The Social Dimensions of the Economic Crisis

The greatest social impact of the economic crisis in Ireland has been the large and sustained increase in unemployment, and in particular, an increase in the number of households where no-one has a job. This is the conclusion of a National Economic and Social Council (NESC) report published today on The Social Dimensions of the Crisis: The Evidence and its Implications.

Gathering together a wide range of evidence, NESC show that most people have been impacted, at least to some extent, by the crisis. Overall, the majority of households in Ireland have experienced a drop in wealth and/or income since the economic crash in 2008. 

Helen Johnston, one of the authors of the report, points out, however, that some groups in particular have been seriously impacted:  ‘those who have lost jobs, had business failures, seen large falls in income or wealth, or who carry a large debt burden have experienced significant social impacts.’ She further outlines that ‘those who were least well-off prior to the economic crisis, especially people who are unemployed, lone parents and people who are ill or disabled, continue to be most at risk of poverty.’

The report also outlines the other ways in which people have been impacted in terms of their physical health, family relationships and mental health.  In addition, the report highlights the importance of public services, such as education and health, especially for people who are vulnerable.  There has been an increased demand for public services as a result of the crisis, while at the same time public expenditure on service provision has been reduced.

In terms of responses, Helen Johnston states that ‘policies and institutions do matter.  For example, Ireland’s social welfare system has been reasonably successful in protecting some people (including older people) from the worst effects of the economic crisis.’

Some Key Figures from the Report 

Unemployment

•    Unemployment has increased from 5% in 2007 to 14% in 2012
•    Young people have especially high unemployment rates – 33% for 15-19 year olds
•    6 out of 10 people who are unemployed are now unemployed for more than one year, with 40% of these men aged 25 to 44
•    22% of all households are now jobless

Income, Consumption and Debt

•    Average weekly disposable household income has increased  from €843 in 2004-5 to €886 in 2009-10
•    Lone parents, people who are unemployed, and people with an illness or disability have the lowest incomes
•    Average weekly household expenditure was €811 in 2009/10
•    In 38% of households, expenditure exceeds disposable income.  Households with lower incomes are much more likely to have spending that exceeds income
•    In 2010, 23% of all households were in arrears with at least one bill or loan, with more than half (52%) of households in consistent poverty in such arrears
•    Income shocks, such as income reductions which arise from becoming unemployed, ill and unable to work, and/or relationship break up, are an important trigger for becoming over-indebted.  This is particularly the case for poorer households, who  are less likely to have the resources to cope with such an income shock

Housing

•    Mortgage arrears of more than 90 days are up from practically zero in 2004, to 12% for principal private dwellings in December 2012; and to 19% for buy-to-let properties
•    People most likely to be in mortgage arrears include those who have lost their job, those who took out mortgages in the 2000s, and younger mortgage holders
•    There is an increasing demand for housing with just under 100,000 people on local authority housing waiting lists and nearly 4,000 homeless people

Poverty

•    The proportion of those in consistent poverty, that is living on a low income and deprived of basic necessities, increased from 4% in 2008 to 7% in 2011
•    The proportion of the population who are deprived (lacking at least 2 basic necessities) increased from 12% in 2007 to 24% in 2011

Public Services

•    There has been an increased demand for public services as a result of the economic crisis, while at the same time public expenditure on service provision, in terms of budgets, staffing and programmes, has been reduced
•    The overall impact on public services, such as education and health, has been mixed with reductions in some areas of service and increases in others, with the increases tending to be mainly in demand-led services, such as medical cards

Society and Community

•    The areas most affected by the economic downturn are the outer reaches of the Dublin ‘commuter belt’, but areas deprived prior to the crisis remain deprived
•    The community and voluntary sector, which has been active in implementing pilot projects, complementing public service provision and advocacy, has been severely impacted by the economic crisis
•    The economic crisis and subsequent fiscal adjustments have affected some people’s psychological and physical health
•    Yet, 86% of the population are satisfied with their life, although this has declined since the onset of the crisis

Impact of Annual Budgets
•    The overall impact of the fiscal adjustments implemented through annual budgets, although severe, has been broadly progressive with those on the highest incomes losing the most
•    The family types most impacted by budgetary policy between 2009-2013 are earning couples with children.  In general, family types dependent on welfare experienced smaller losses. 

Note to Editors:

The National Economic and Social Council (NESC) was established in 1973.  Its function is to analyse and report to the Taoiseach on strategic issues relating to the efficient development of the economy, the achievement of social justice and the development of a strategic framework for the conduct of relations and the negotiation of agreements between the government and the social partners.  The Council is chaired by the Secretary General of the Department of the Taoiseach.  It comprises representatives of trade unions, employer bodies, farm organisations, community and voluntary organisations, environmental organisations, key Government departments and has eight independent experts.

Download Documents

To download the report, executive summary and briefing notes please vist the publications page.

For further information contact:

Helen Johnston, mobile: 0874191780; email: helen.johnston@nesc.ie