Income Inequality
Measuring Inequality in Ireland and the EU
Gini Co-efficient
The Statistics on Income and Living Conditions (SILC) is an EU-wide survey conducted in Ireland by the Central Statistics Office, as part of an EU-wide programme to obtain information on the income and living conditions of different types of households. It collects data on income, poverty, social exclusion and living conditions. One measurement which can be found in the EU SILC data is the Gini Coefficient. This is the most commonly used measure of income inequality. The coefficient varies between 0, which reflects complete equality and 100, which indicates complete inequality (one person has all the income or consumption, all others have none). In the EU-SILC 2009, the Gini Coefficient for Ireland was 29.9. This compares to a Gini Coefficient for Slovenia of 23.4 and 23.7 for Slovakia, while Romania had the most unequal income distribution with a Gini Coefficient of 36. The average for the EU27 countries was 30.6. It is not surprising that the countries high on the ‘at risk of poverty’ scale also have a high Gini Coefficient.
S80/S20
Another helpful indicator which also shows the levels of inequality in a country is the ‘inequality of income distribution – income quintile share ratio’. The S80/S20 ratio is the ratio of the total income received by the 20% of the country’s population with the highest income to that received by the 20% of the country’s population with the lowest income. The higher the ratio, the greater the inequality. The S80/S20 2010 ratio for Ireland was 4.2, while in Slovenia it was 3.2, in Slovakia and Norway it was 3.4 and in Latvia it was 7.3. The average for EU 27 was 4.9.
At Risk of Poverty Rate
People or households are considered to be at risk of poverty when their income is less than a particular threshold. In the EU, the threshold has been set at 60% of the median income (mid-point in the scale of the highest to the lowest of all incomes). In Ireland the latest figures from Eurostat show that, in 2008, 16% of the population were at risk of poverty, while in the Czech Republic this was 9% and on the other end of the scale was Latvia with 26% at risk of poverty. The average for the EU27 countries was 17%.
To view graphs of the above data click here.
The HEAP (Hierarchy of Earnings, Attributes and Privilege Analysis) Chart
In 2009, the H.E.A.P. Chart was published by ICTU (Irish Congress of Trade Unions), TASC (a think tank for action on social change) and SSRC (Social Sciences Research Centre, NUI Galway). The purpose of this chart is to provide some of the basic facts relating to income distribution in Ireland, together with an analysis of Ireland’s socio-economic structure. The Chart transforms the statistics into graphic images which enable the reader to easily locate household types and occupations within the income distribution. The information from the chart sheds light on various inequalities in Ireland. The data for the Chart comes from the Irish version of the EU Survey of Income and Living Conditions (EU-SILC). The conclusions drawn from the chart show that Ireland did not use the benefits of our economic boom to reduce levels of inequality. On the contrary, the distance between those at the top and those at the bottom actually widened. The report concludes that we should set about building the type of society we want. This society will have a much higher level of income equality, and the social solidarity that goes with it, as one of its essential foundation stones.
Wealth and Inequality
Wealth, and the distribution of wealth, are topics which have been the subject of very little discussion over time, but the available figures show that gathering statistics on the distribution of wealth is extremely helpful in highlighting how equal or unequal a society is. Even during the “Celtic Tiger” years, the number of people experiencing poverty remained persistent. At the same time, the number of millionaires increased steadily and was only momentarily halted due to the current financial crisis. In an EAPN Document on wealth distribution it shown that the top 1% of the Irish population hold 20% of the wealth, the top 2% control 30% and the top 5% disposes of 40% of private assets.
These figures emphasise the damaging effects of a growing gap between poor and rich which have been repeatedly expressed by the delegates of the European Meetings of People Experiencing Poverty, who have criticised “that the matter of fair distribution plays a marginal role on the political agenda.”
More recently, our parent network, the European Anti-Poverty Network, has produced an “explainer” which aims to break down what wealth is and illustrate how social polarization is currently growing in the EU and worldwide. The document provides an extensive range of statistics on these issues.
To view the latest wealth explainer, click here.
