Consensus on tax may be failing the jobless

A recent conference on employment advocated forgoing tax reductions - or even increasing taxes, if necessary to create jobs in…

A recent conference on employment advocated forgoing tax reductions - or even increasing taxes, if necessary to create jobs in the public sector.

The organisers were the Irish National Organisation of the Unemployed, perhaps? Or Mr Joe Higgins's Socialist Party, flushed with its recent election victory?

No, this conference was organised jointly by the Council for Social Welfare of the Catholic Bishops' Conference and the department of social issues of the Irish Inter-Church Meeting, a grouping of all the churches. It discussed a report which had already proved controversial in Britain when it was published shortly before the general election.

This was the Enquiry into Unemployment and the Future of Work, the result of a study carried out by working party drawn from all the Christian churches. It advocated no only increasing taxes to create jobs, but a statutory minimum wage and trade union rights to secure adequate pay and conditions for workers.

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The document also pointed out that, while the Irish economy was one of the fastest-growing in the world, its long-term unemployment rate was exceptionally high.

Numerous studies link unemployment, especially long-term unemployment, to a range of costly social problems. Drug abuse and crime are closely linked to areas of high unemployment and they impose a high financial and social cost on the community. Being jobless has proven negative effects on both mental and physical health, further burdening the public health system. Yet in the recent election campaign, as Cliff Taylor, Finance Editor, pointed out in The Irish Times, jobs were not a major issue.

In so far as they featured at all, there was a consensus between the parties, with the exception of the Greens and the smallest groups. They all wanted to reduce taxes, to beef up a national employment service, streamline back-to-work schemes, offer training to school- leavers and reduce corporation tax.

In addition to the aspirations they shared with their Fianna Fail partners, the PDs wanted to cut public service jobs and to withdraw social welfare benefits from those who would not accept training or work experience. This consensus was broken only by the Greens, who wanted to introduce a basic income and to tax energy rather than employment.

The politicians were not asked to quantify, even in ball-park figures, how many jobs would accrue from the reduction of taxes, either on corporations or on individuals.

It was assumed that, if people kept more of their earnings, they would take lower-paid jobs; and, if corporations had more profits to invest, they would invest them in jobs - not an inevitable outcome.

All parties referred to "retraining" as an answer to the problems of the unemployed. None of them was asked how many of the 160,000 long-term unemployed could be trained to a sufficient level to work in the new high- tech industries where most new jobs are to be found.

Would it be as many as 16,000? That is only 10 per cent of the long- term unemployed and there is nothing like that number receiving such training. And how many more of, these jobs do we expect to be created?

One speaker at the conference, economist and Jesuit priest Father John Sweeney, of the Centre for Economics and Ethics in Louvain, Belgium, poured very cold water on the retraining mantra as an answer to long-term unemployment.

"The earning power of some groups in the competitive market- place it so far behind what they need to earn a decent income that the scale in their human capital is simply enormous, and a questionable use of resources," he said.

In the context of the US economy, studies had shown that this would cost 1995.

"We need to accept that the threshold of personal productivity that makes people attractive to employers in the competitive sector is steadily rising and that the number of people unable to attain this threshold is rising too."

He called for a more pro-active approach. "We are being called, as societies, to show more independence of the criteria of the market-place and to ensure that people not attaining that threshold can still make contributions in the sheltered economy, contributions in the social, cultural and caring spheres that are.

The other response to unemployment where there is broad political consensus is the development of the "social economy" through schemes such as the Social Employment Scheme. While not opposing this, Father Sweeney is concerned that it might become a low-paid, low-skilled, self-contained ghetto for people who could not compete in the "real" economy.

If it was not also intended as an employment source for graduates, it would he come "a pretext for either the private or the public sectors to continue developing as enclaves for the high-skilled", he said.

Amid the competition in promises to reduce personal tax during the election campaign, nobody could be found to argue that some things might be more important - like quality public services and quality jobs.

YET there is evidence that, when this proposition is put to people, many of them will agree. During the recent British general election, the Liberal Democrats proposed increasing taxation to improve education, and they doubled their vote.

It is likely that the PDs' proposal to cut 25,000 public service jobs in the name of reducing tax was one of the things which led to their large losses. Only this week, an opinion poll in Britain found that almost

60 per cent of respondents wanted the Labour government to break its pledge not to raise taxes, and to do so to improve public services.

Father Sweeney asked why we were not debating more vigorously the case for extra tax to fund an expansion of the public sector to take in some of the less-skilled. "I think a straw poll of county managers and health boards would produce in Ireland a long list of real services to the community - genuine increments in our social wealth - that lie within the capacity of many of our unemployed to provide.

"Extra taxation, or forgone tax reductions, translated into a specific number of decent job opportunities for the long-term unemployed, is surely a proposition many Irish would have accepted If it had been put to them," he said. But it wasn't.

He also advocated subsidies to encourage the private sector to offer employment to the less-skilled and long- term unemployed so that they would be trained on the job rather than in a series of training schemes with no necessary job outcome.

The Labour Party and Democratic Left, both committed to reducing unemployment, will be looking for distinct policies to recast their identities in the next Dail. Perhaps a look at the churches' Enquiry into Unemployment and the Future of Work, or a chat with Father Sweeney might help.