Celtic Tiger Prosperity For All?

Since the ‘Celtic Tiger’ boom in the Irish economy from the mid-nineties, most people’s incomes have increased. High earners incomes have increased more the low-income earners, widening the gap between rich and poor. State pensions have not increase either allowing pensioners to fall into poverty. In 2005 according to the United Nation Human Development Report 2004, Ireland has the second highest gap between high and low income earners, with United States of America (USA) having the highest. This is not the first time Ireland has come second to the USA in this category. It is an ongoing problem that the Irish Government is trying to addresses. Ireland has the highest gap between rich and poor in the EU. There are four different definitions of poverty, the United Nations (UN) use absolute and relative poverty, the Irish Government uses consistent poverty and the European Union (EU) uses persistent poverty. The variety of definitions of poverty used makes comparisons between reports difficult.

Absolute poverty, which is used by the UN in its Human Development reports, is based on subsistence, a minimum standard needed to live. Seebohm Rowntree's research identified a 'poverty line' on the basis of minimum needs. Relative poverty, which is also used by the UN in its reports, is based on a comparison of poor people with others in society. Peter Townsend defines poverty as "the absence or inadequacy of those diets, amenities, standards, services and activities which are common or customary in society." Consistent poverty is set at those whose income is below 60% of average income and material deprivation on a number of key items. Persistent poverty, which was defined at the EU summit in Laeken, Belgium, in 2001, is defined as a person/household being below the 60 per cent of median income poverty line in the current year and for two of the three previous years.

Before a policy can be put in place to deal with poverty the causes of poverty must be found also the solutions to the causes. The causes of poverty are unemployment, educational failure, tax and welfare systems, inequality, discrimination and exclusion. In 1997 the Irish government implemented the National Anti-Poverty Strategy (NAPS) to combat poverty. NAPS was a first as it was the first strategy that set out ‘specific targets for poverty reduction’ (Frazer, H. 1999, p6) It was implemented by the then Minister for Social Welfare Proinsias De Rossa. The original targets for NAPS for 1997 - 2007 were to reduce those living in “consistent poverty” by half, halve unemployment to six by 2007, cut long-term unemployment to three point five percent by 2007, eliminate early school leaving before the Junior Cert and place the needs of the poor and socially excluded on top of the national agenda in terms of Government policy.

NAPS has had some successes. In the case of consistent poverty it has dropped from fifteen percent in 1994, to the ten percent in 1997 and to six percent in 2000. The drop in consistent poverty reflects sharp drop in depravation levels. If NAPS is to reach its 2007 target, then consistent poverty to less than five percent by 2004 and by less then two percent by 2007.

As the number of people living in consistent poverty since the introduction of NAPS, the number of those living in relative poverty has increased. Relative poverty has increased from 17.4% of persons (16.3% of households) in 1987, to 20.9% of people (25.8% of households) in 2000. This is due to a number of factors. Between 1997 and 2001 employment income has increased by 40%. In the same period non-contributory pensions increased by 35%, contributory pensions by 25%, unemployment assistance by 21%, and single parent allowance and disability allowance have increased by 18% (Source: Layte at al, 2004 p6) . The differences in the increases have made it easier for those on state benefits to fall into relative poverty.


In 2002 the Irish government reviewed the targets of NAPS. The new targets want consistent poverty eliminated if possible, eliminate long-term unemployment when possible, ensure housing supply in brought inline with demand and reduce the gap in life expectancy between traveller community and the rest of the population by at least ten percent by 2007. These new targets were launched by the Minister for Social Welfare, Dermot Ahern, in “Building an Inclusive Society”. This became known as NAPSincl.

There has been much criticism of NAPS and NAPSincl by various groups. The Economic and Social Research Institute (ERSI) believe using income levels as a measure of poverty fail to give an accurate picture of Irish poverty. The Conference of Religious of Ireland (CORI) believes that the government have “betrayed poor in favour of the better-off” (Donaghy, K. 2001 p7). CORI says this as the government negotiate with trade unions and employers, but make no negotiations with Ireland’s poorest people or representative groups.

Irish data collected by the Irish Government cannot be compared to data collected by the EU as the methodology used by the Government is different to that of the EU. According the EU Survey on Income and Living Conditions in 2003, 23% of the population are living in relative poverty. While less than 9% of the population are living in consistent poverty. This is a lot higher than the Irish Government figures, but the Government are blaming the different methodologies for the discrepancies.

The Irish Government is not the only government in the EU with an anti-poverty strategy. In 2001 all the then fifteen member states initiated anti-poverty plans. The Irish government can draw on the other plans for new ideas for future policies. According to Brian Harvey (2001, pp8-9) the Dutch are focusing on involving the socially excluded themselves by holding twice-yearly consultations with benefit claimant groups. The Dutch have also set u a think tank to put forward new ideas to combat poverty. The Danish are focusing on improving the value of welfare payments. The Danes also have a DK70m plan for five model urban neighbourhoods, to improve housing, welfare, education and local democracy. The French have focused on new initiatives that range from helping people at on low incomes to improving access to culture and leisure. France already has a system of guaranteed rights to income, housing and health, but their plan says more needs to be done. Under the agreement in Laeken, Belgium all the plans will be compared under 81 different indicators.

According to the National Economic and Social Forum (2003, pp51-52) there are a number of challenges and barriers that NAPS must overcome in the future. NAPS must ensure the full participation of people living in poverty in informing any national policy against poverty. Future government poverty policies must be rights based rather then setting targets to reduce poverty. Future policies should aim to mainstream local, national and European anti-poverty strategies. Equality should be strengthened in future policies. More resources should be given to NAPS and future anti-poverty initiatives. Communications on poverty and related issues should be improved to show how programmes like NAPS are making a difference.

NAPS focuses attention on understanding causes of poverty and identifying action areas, this cannot continue in the future when hard-hitting policies to tackle poverty are needed. Ireland has changed dramatically since NAPS was first introduced. The unemployed are no longer the majority of the poor. The elderly now compromise the majority of the poor. The long-term success of NAPS and NAPSincl requires redistribution. This means linking pensions and other social welfare benefits to average incomes to prevent venerable people from falling into relative poverty. This will mean an important role for Government social and budgetary policy. The government should acquiesce to the community pillar and set targets for relative poverty instead of just monitoring it.

Poverty is still a major problem in Ireland as the number 15.3% of the Irish people are living in poverty. The richest ten percent of the Irish population is making 9.7 times made by the poorest ten percent of the population. This is something that cannot continue in today’s society where equality is treasured by all. Rights for those living in poverty should be high on the Government agenda and the Government should also involve people more in deciding future policies on poverty, just like they do with the national pay agreements.