The urban/rural divide has long been the subject of debate. CSO data, published this week, presents new and importance evidence which for the first time estimates earnings based on where people live – in other words whether they live in cities, commuter towns, more rural towns or remote rural areas. The data contain some fascinating insights on where and how we live and how this affects what we earn.
1. Where we live
Over recent years, Ireland has become more urban. With just under one in three people now living in rural areas (31.4 per cent), we are now not far out of line with the EU average (27.3 per cent). Definitions of urban and rural differ a bit: the CSO in this publication has used characteristics similar to those used in other EU countries.
It has also split both the urban and rural categories into different types – see the map. So within the urban category, there are city satellite towns where more than 20 per cent to people work in a city – for example Naas and Balbriggan – and independent urban towns, where fewer than 20 per cent go to cities to work, such as Sligo and Dundalk, for example.
Rural Ireland is divided into areas with high urban influence – where significant numbers go to work in cities, such as parts of Meath and Wicklow for example – moderate urban influence (parts of counties such as Wexford, Cork and Kerry would fit in to this heading) and more remote areas typical in the Border counties and the West.
The table shows some interesting trends. Cities, not surprisingly, continue to grow in population, rising 5.3 per cent since 2011, compared to 3.6 per cent for the population overall. Indeed population in all types of location, apart from the remotest rural areas has continued to rise.
The rise in satellite towns – think Wicklow, or pretty much any town in Meath or Kildare – is also not surprising, though they might have been expected to be above the average. Rural areas with an urban influence have also grown strongly enough. Again many are commuter areas and the population rise will have been driven in part by rising house prices.
Is this in part people moving from more remote rural areas, perhaps driven by housing needs and the availability of schools?
Perhaps most surprising is the extent of the rise in what are called the independent urban town – typically towns in counties well away from the major cities. As we will see, these towns do not do particularly well economically, yet they showed a population rise of 5.5 per cent between 2011 and 2016. Is this in part people moving from more remote rural areas, perhaps driven by housing needs and the availability of schools? Or is it a drift out of cities to find cheaper accommodation – with some people still undertaking long commutes?
Either way, the data does suggest that in many of these towns at least, there must be pockets of low income and disadvantage. Marital breakdown in these towns, is estimated at 15.5 per cent, compared to the State average of 11 per cent.
2. What we earn
It comes are no surprise that people in the cities earn more, though the extent of the gap between different parts of the State is interesting. The data contain two different average measures. The “mean” is what most of us understand as the average – all the earnings in an area are added together and divided by the number of people.
However, for earnings, this average can be distorted by a small number of people earning an awful lot of money. So the CSO also produces median figures – this is the earnings level where the number of people earning more is the same as the number earning less. This filters out the impact of the super-high earners.
Not surprisingly, 'satellite urban towns' – the commuter belt – had the second highest disposable income at €42,709 (gross income of €50,072)
Cities had the highest median household disposable (after tax) income in 2017 of €46,458. Gross income, or income before tax, was €55,989 on average. Not surprisingly, “satellite urban towns’” – the commuter belt – had the second highest disposable income at €42,709 (gross income of €50,072). Other data has shown that people living in Wicklow, Meath and Kildare earn more on average if they commute to work – mostly to Dublin and its environs.
“Rural areas with high urban influence” were the third highest in terms of median income at €42,176, (€47,292 gross earnings), well ahead of the independent urban towns’ at €34,626 (€39,159 gross). Income in cities was around one third higher than the least well off – remote rural areas – where the figure was €29,424 (€30,844 gross).
The CSO then went on to look at a measure of disposable income per head of population. The cities were again highest at €23,497, followed by rural areas linked to cities at €22,127 and satellite towns at €21,481. However at the bottom of the pile here are independent urban towns at just €17,433 – indicating that many households in these towns have more people living in them than the average.
These figures include social welfare transfers. When these are excluded, remote rural areas fall to the bottom of the pile –with disposable income per head of less than €10,000 on average. So these areas are particularly reliant on the welfare system.
Given the relatively older age group living in remote rural areas, much of this is probably pension income. In terms of working age welfare however, independent rural towns are the most reliant.
3. Who is at risk of poverty
Policymakers use a range of indicators to indicate people at risk of poverty or already in that situation. The spread of data shows rural Ireland and its towns having higher numbers than the average in the various categories.
Looking at people defined to be “at risk of poverty” – judged by income levels – the highest figure was in rural areas, where it was not far off one in five, and the lowest was in cities at 12.8 per cent. The national average was 15.5 per cent.
Looking at those in consistent poverty – using income measures and also indicators on housing, food, heat, clothing and so on – the independent urban town shows the highest rate, a striking 24.2 per cent compared to an 18.8 per cent national average. Unemployment in these towns has been falling sharply, but at 6.3 per cent the unemployment rate remains above the 4.7 per cent national average in the first quarter of 2019.
4. What home
The CSO data also looks in detail at housing. More than four in 10 people nationwide live in detached houses – for those in cities, semi-detached houses are the most popular form of accommodation. Around one in four households in cities and in independent urban towns rent from private landlords.
The strongest growth rate in building was in satellite urban towns
Strikingly, just over 70 per cent of the new dwellings built in 2011 were in rural areas, but by 2018 this pattern had reversed, and more than 70 per cent of new dwellings were built in urban areas.
The strongest growth rate in building was in satellite urban towns, with 3,948 new dwellings in 2018, about 13 times higher than the 2011 figure of 295. Many people are priced out of the Dublin market and are moving out to these areas.
The largest percentage increase in the number of people at work between the first quarter of 2018 and the same period last year was in satellite towns, where there was an 8.5 per cent jump to 25,900.
However, in terms of absolute numbers, cities are still the biggest source of jobs and new housing stock, with a significant rise in recent years to 6,736 completions last year. Some one in four of the new houses completed last year were in county Dublin.
The median price for residential property was €249,999 in 2018, with the highest prices in cities at €336,000, followed by €288,847 in satellite urban towns. The lowest median price was €125,000 in highly rural/remote areas, followed by €152,000 in rural areas with moderate urban influence.
5. The policy messages
There are a few obvious messages for policymakers. One is evidence that in many parts of the State large numbers of people are living on modest incomes and that, in some localities, notably independent towns not linked to urban areas and parts of rural Ireland, these trends are particularly noticeable.
Perhaps it is no wonder that politicians moved to lift many lower income people out of the income tax net and reduce the burden sharply on others after the crash. It is a way to help a large number of people.
More than one in five households in independent urban towns rely on working-age welfare payments for over half their gross income
The ongoing reliance on the welfare system in some areas is also striking. More than one in five households in independent urban towns rely on working-age welfare payments for over half their gross income.
The figures also show the challenges of delivering the Government’s national development plan – and the problems in spreading the gains across the State. The goal of developing compact cities and corridors out from them is significant – there are pluses evident in terms of higher housebuilding and work on public transport, but still huge affordability, planning and development challenges. While the plans also aim to develop rural towns and rural Ireland, the challenge here is significant , with the data pointing to low levels of economic activity, notably in many of the towns dotted around the countryside.
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