The Pandemic Unemployment Payment (“PUP”) was a wholly necessary and socially just intervention by the State to help the most economically vulnerable survive the calamitous effects of the lockdowns.
Some may argue that it was unfair at the edges, insofar as deserving cases between jobs and other similar exclusions were harsh. Others claimed that PUPs were overly generous and sapped the will to participate. Improper claims have been identified in a minority of cases.
But I think most people would accept that PUPs were socially and economically just, if imperfect. The question that arises now is whether PUPs are having some form of economic and social after-life which is contributing to what are termed “labour shortages” or what might be called “reduced incentive for economic participation”.
I don’t think that all the post-pandemic disruptions can be or should be laid at the door of PUPs. The causes of those disruptions are more complex and varied. An interesting point for consideration and research is the effect of such widespread payments on motivation to participate in the paid sectors of the economy.
For years, Social Justice Ireland (previously operating under the aegis of the Conference of Major Religious Superiors and, later, the Conference of Religious in Ireland) has advocated payment of a universal Basic Income. Its best known champion, Seán Healy, has consistently argued for a model which would marry welfare and taxation systems in the provision of Basic Income.
For years too, others, including myself, have challenged that idea on the basis that the inevitable consequence of a universal basic income would be a significantly higher tax rate on earnings and that the scheme would result in a much higher rate of opt-out from the paid economic sector.
While it would be unfair to judge the Basic Income concept by the outcome of PUP, there still is some room for reflection here. Would it provide a disincentive to work in an employment market where higher taxation was imposed on earnings? Put another way, is economic participation partly or mainly motivated by necessity? And if you subsidise non-participation and increase taxes on participation, what would the social and economic consequences be?
We have to be alert to the possibility of unintended consequences for well-motivated, simple-sounding policy changes.
Take for example the demise of the urban bed-sit. Threshold, the homeless charity, lobbied successive governments for the introduction of rented accommodation standards that would prohibit the letting of bed-sit type accommodation where the tenants shared common bathroom or cooking facilities. Such a prohibition, they argued, would persuade private landlords to improve the living conditions and dignity of tenants at the lowest end of the property market. That sounded plausible and good.
And so Minister John Gormley with the best of motives made such regulations with a delayed implementation period of four years to allow landlords to re-configure their premises to comply.
The problem was that many older buildings with, say eight or ten bed-sits, simply couldn’t – physically or economically – be transformed into anything like that number of individual dwellings. The easier option for the landlord was to sell the building with vacant possession when the four-year implementation period was over.
The well-intentioned reform probably had the effect of ending the letting of between ten and twenty thousand bed-sits in urban Ireland. This effectively extinguished the lowest rung of the private rented accommodation ladder for many vulnerable people.
Having seen the very poor standards of many bed-sits in my time as a TD, I understood what Threshold and John Gormley were trying to achieve. But a curious side-effect of the policy has been the wholesale gentrification of bed-sit land as trophy homes for the wealthier bourgeoisie in inner-city areas. Older houses that had accommodated 12 or fifteen or more people in bed-sits or flat-lets with shared facilities have been transformed into opulent, now fashionable, and spacious homes for families of four.
It became perfectly legal and commonplace to let out an entire house to a number of people who had an individual bedroom but shared the bathroom and the kitchen. House-sharing was legal but bed-sits were illegal. The difference, (with Yale locks on bedroom doors) was minimal. It even became possible to change from bed-sit tenancies to joint tenancies of entire buildings including the common areas without altering the building at all! And now we have the dubious return of the “shared living” market.
But for many very vulnerable tenants who were content with their bed-sit or flat-let homes, the result was eviction, dislocation, and joining the queue for social housing far away from their communities.
Who gained from all of this? The wealthy bourgeoisie who gentrified the vacated houses? The landlords who were forced to sell out? The tenants who were forced to clear out? The homeless who faced even longer queues? Students who could not live in bed-sits? Single, elderly and sometimes separated people who were up-rooted?
My point is that we should think carefully before making some variant of PUP a permanent part of the system.