Ireland in 19th rank for disposable income: 22% below OECD average
Ireland is in the 19th rank for disposable income and 22% below the OECD average in one measure of individual standard of living — the Organisation of Economic Cooperation and Development comprises 25 of the world's rich countries and 10 emerging economies.
As GDP (gross domestic product) per capita data also include activities of the business and government sectors, the OECD says a preferred measure of people’s material well-being is household disposable income per capita, which represents the maximum amount a household can consume without having to reduce its assets or to increase its liabilities.
The measure corresponds to the sum of wages and salaries, mixed income, net property income, net current transfers and social benefits other than social transfers in kind, less taxes on income and wealth and social security contributions paid by employees, the self-employed and the unemployed.
The data are adjusted for price differences using what are called purchasing power parities (PPP).
Last month Eurostat, the EU's statistics office, published a related measure of material standard of living known as actual individual consumption (AIC) which tracks consumption of public and private goods and services, again adjusted for price differences.
With the EU-28 at 100 and the EA-19 (Euro Area) at 105, Ireland had a ranking of 11 behind Italy despite the latter's near stagnation over a decade.
The EU member state with the second highest AIC per capita is Germany at 23% above the average (Luxembourg is an anomaly as some of its workforce live outside its borders) followed by Austria with the level at 19% above that average. Ireland, having the second highest level of GDP per capita in the EU-28, has AIC per capita at 4% below the EU-28 average.
Eurostat says that data for Greece, Ireland and Iceland, show a healthy increase between 1995 and 2005, but a significant drop between 2005 and 2015.
Ireland had a 10th ranking in the EU-28 in 1995 (there were 15 members in 1995) and 20 years later it has a lower ranking.
During the property boom, a rising tide lifted all boats but it was lopsided: average weekly industrial earnings rose 60% in 1997-2007 compared with a 120% rise in the standard TD' s salary — consumer inflation was about 30%.
Despite the huge artificial boost to Irish credit, profits and pay, AIC in for example 2005 was 100 in the EU27; 101 in Italy; 110 in Ireland and Denmark; 112 in Sweden; 114 in France; 116 in Germany, Netherlands and Austria. Spain was at 99.
OECD data
In 2016 the OECD published the following data in its Better Life Index series.
The data is in respect of 2013 but recent data on annual rises show that Ireland added 1.9% in 2014; Denmark added 1.6% and 5.3% in respect of 2014 and 2015; Germany added 1.4% and 2.54%; the UK added 1.52% and 3.21% and Italy added 0.39% and 0.79%.
In Ireland, the average household net-adjusted disposable income per capita was $22,969 a year, less than the OECD average of $29,016 a year. The top 20% of the population earn almost five times as much as the bottom 20%.
In Spain, the average household net-adjusted disposable income per capita was $22,007 a year. The top 20% of the population earn close to seven times as much as the bottom 20%.
In the UK, the average household net-adjusted disposable income per capita was $26,687 a year. The top 20% of the population earn nearly six times as much as the bottom 20%.
In Italy, the average household net-adjusted disposable income per capita was $25,004. The top 20% of the population earn close to six times as much as the bottom 20%.
In Denmark, the average household net-adjusted disposable income per capita was $26,945 a year. The top 20% of the population nearly four times as much as the bottom 20%.
In Sweden, the average household net-adjusted disposable income per capita was $28,859 a year. The top 20% of the population earn four times as much as the bottom 20%.
In the United States, the average household net-adjusted disposable income per capita was $41,071 a year, more than the OECD average of $29 016 a year, and the highest figure in the OECD. The top 20% of the population earn about eight times as much as the bottom 20%.
Across the OECD, the average household net financial wealth per capita was estimated at $84,547.
In Ireland, the average household net financial wealth per capita was estimated at $31,861. The OECD said: "While the ideal measure of household wealth should also include non-financial assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries, and is not included here."
In Italy the average household net financial wealth per capita was estimated at $56,833.
The levels were $50,000 in Germany, $70,000 in UK and $Sweden; $71,000 Netherlands.
The general pay level in Ireland is too low for some of the workforce; last July the OECD said Ireland at 25% had the highest percentage of low pay in the OECD area [low pay is than 66% of a country's median income (mid point of population/ sample where half are above & half below.]
Tax on labour income
The OECD says that the tax wedge is a measure of the tax on labour income, which includes the tax paid by both the employee and the employer.
The think-tank said in 2016 that Ireland has the 7th lowest tax wedge among the 34 OECD member countries in 2015. The country had the 8th lowest position in 2014. The average single worker in Ireland faced a tax wedge of 27.5% in 2015 compared with the OECD average of 35.9%.
It said Ireland has the 3rd lowest tax wedge in the OECD for an average married worker with two children at 9.5% in 2015, which compares with the OECD average of 26.7%. The country occupied the same position in 2014.