The Professor and the Poor. This week saw an amazing burst of publicity about a working paper written by a former ESRI professor, Richard Toll.

Morning Ireland on RTE led off with a story about how a paper from ESRI had been withdrawn after it claimed that 44 percent of social welfare recipients with children were better off out of work. Richard Toll implied that he had been censored after taking a courageous academic stance. Newstalk followed with the same story and then Joe Duffy joined in the publicity frenzy. The Irish Independent had it for two days running.

An interesting thought experiment suggests itself. Imagine that a professor wrote an article which suggested that wealthy people were saving 44 percent of their taxes by declaring themselves tax exiles. Or, let’s say, the same professor was not so fixated on numbers and simply described the mechanisms through which Ireland had become a tax haven for the global rich.

Would the story have featured all over the media? Would a platform have been provided on talk shows to let listeners engage in spiteful attacks on lazy good for nothings who did not contribute to alleviating the economic crisis? Hardly!
Richard Toll - and his co-authors from the European Central Bank and the ESRI - produced a poor piece of research.

Their data was drawn from the 2004/2005 Household Budget Survey - a different era, when the Celtic Tiger was roaring. This particular survey provides detail on how people spend their money but it does not provide evidence on how individuals would be better off working or not. Instead, Toll claimed, that by using complicated statistical techniques, he could generate the evidence.

His supposed finding was that going out to work cost an extra €9,000 a year for someone with one child and €7,000 a year for those with none. These sums arose from the additional costs of transport, childcare, food. As a result, he asserted, there was a disincentive in going to work for 44 percent of social welfare recipients.

It should be utterly obvious working involves extra costs. But how did Toll conclude that childcare cost only an €2,000 extra when compared to others who had no children? Ireland has the dearest childcare costs in Europe as a result of the failure of the state to provide crèches. Even in 2004, it would have cost far more than €2,000 a year to avail of privatised childcare.

The withdrawn study did not involve a single interview with a social welfare recipient. There were no insights provided by the poor to the learned professor. Instead the paper has all the appearance of a mathematical juggler wanted only to display his agility in playing with figures.

The ESRI is not an institution that supports poor people. It has never in its entire existence called for cuts in profits to facilitate wage increases for workers. It regularly calls for cuts in workers’ wages to support profits. But even the ESRI knew that a blatantly biased piece of research, which implied that social welfare needed to be cut to create an incentive to work, would give the game away.

(The mere suggestion that wages would be increased and that the state should provide childcare facilities is deemed to be beyond the bounds of possibility. So, incentives could only come from cutting social welfare)

The ESRI brands itself as a neutral, expert institution which stays above the fray of conflict in society and is capable of giving ‘objective advice’. In reality, it operates entirely within the parameters of the political establishment and its researchers embrace the dominant viewpoint of the privileged. They assume that the capitalist system is natural and will exist for all time; that workers are given employment and not exploited; and that there are no fundamental conflicts of interest between social classes in our society.

These assumptions are hidden behind a technical discourse that relies on quantitative data to convey a sense of expertise and objectivity. But the record shows that the ESRU projections on the economy are often simply wrong. In 2008, for example, they were predicting a ‘modest recovery’ where 34,000 jobs were created. Unfortunately, we entered an era of recession and mass unemployment.

Toll is such a blatant neoliberal that he tended to discredit the ESRI’s role as a supposedly objective observer. So the institution took down a ‘working paper’ – or a first draft of research conclusions- from their website.

Which is hardly earth shattering news.

Except, of course, that what appears as news has to be selected by someone in the media. The fact that the ‘unemployed-are-better-off-on-social-welfare-than-working’ story appeared everywhere tells you more about the systemic bias of the corporate and state media. They like it when working people focus their anger on each other rather than looking at the social class above them. Put simply it takes the heat off Denis O Brien and the political elite when the terms of the latest controversy become ‘is Irish social welfare too high?’

Hence the strange transformation of a piece of shoddy research into the main news item of the day.

Now for a piece of real news......

GOVERNMENT TO MAKE SOCIAL WELFARE RECIPIENTS HOMELESS

The government is reducing the rent supplement paid to social welfare recipients and is forcing some out of their accommodation.

The last budget forced them to pay €30 a week towards rent in private accommodation. But few noticed that the Department of Social Protection had also established new maximum rent caps.

If you live in the Dublin area, for example, the maximum rent you are allowed is €475 a month for a single person. Once you deduct your own contribution of €120 a month, the social welfare will only provide you with €355 a month.

But remember this is the maximum.

Local social welfare offices can impose an even lower rent caps. So in certain parts of the city, they will give you a lower rental supplement.

In recent weeks social welfare recipients have received review letters telling them to supply information on accommodation. If their rent is above the maximum, they will be told to leave their accommodation because social welfare will no longer pay any supplement.

Normally, they are given about two months to leave if the landlord does not reduce the rent. In other words, people are being thrown out on the street and being made homeless.

HOUSING CRISIS

These moves are a scandalous attack on poor people. It is yet another mechanism to reduce social protection in order to pay off bondholders and bankers.

The reality is that there is already a housing crisis in Dublin. Everyone knows that it is hard to get accommodation for under €475 a month and so people are being forced to make ‘under the counter’ payments to their landlords.

Already some people have to contribute €50 or €60 a week from their dole just to live.

A BETTER POLICY

The Minister for Social Protection, Joan Burton, says these attacks are necessary because the state is spending €500 million a year in rental supplement to private landlords. But there is a better policy for dealing with this.
The government could bring in rent controls. Landlords should be ordered to reduce rents and no increases should be allowed during this economic emergency. After all, social welfare and wages have been cut – so why not rents? Rental controls exist in New York and Berlin. So why not Dublin?
The government is the biggest property owner in the world through its control over NAMA. It should open some property for social housing. That way it would also help to force down rent as it would reduce the demand for private accommodation.
But these policies would involve an attack on the more privileged. And this government would not like that.

If you agree and want to join the Socialists, text JOIN to 086 307 4060