Monday, October 01, 2007

A Critique of McWilliam's Generation Game

Its rather unfortunate that after years of excellent
commentary and quality predictions - which took many
years to take root, but now turning out to be
uncannily correct, David McWilliam's proposed
solutions for Ireland imminent economic collapse are
so utterly and dangerously wrong.

McWilliams has for a long time warned against the
unique situation in Ireland where low interest rates
have fuelled a massive lending boom and
consequentially, a massive housing value explosion.
With considerable immigration, as much as 50% of it
returning emigrants who left these shores years
ago, housing values (and private sector rents)
rocketed due to high demand and an almost comatose
public housing sector which almost deliberately
failed to house any but the most desperate and
pathetic cases, leaving many public housing estates
an economic disaster zone, packing together the most
deprived and marginalised. In the last couple of
years, subsidy programmes such as the very limited
SOS housing scheme and more widely adopted
Affordable housing initiative have largely catered
to wealthy middle class lower grade professionals -
quite frequently mid 20s recent vocational graduates
who themselves would have been well able to afford
housing at cost price within 3-5, while excluding
the growing mass of average paid workers squeezed
out of the housing market, but also barely able to
keep pace with rapidly rising rents in a very poorly
regulated sector of largely poor quality housing
into which they are forced to live.

While McWilliams has quite correctly identified that
there are issues with the high level of net
migration Ireland has experienced over recent years,
the fact remains which nobody seems able to
accurately gauge - firstly the real levels of
migration into Ireland - which may or may not
understate real levels, and secondly, the "exit"
rate - the numbers leaving the country.

The reasons for this are historical - embarrassed by
the waves of mass em migration which swept Ireland,
there was political expedience in not measuring the
true levels of emigration as it was inevitably seem
as political failure on a mass level - the failure
of the new self-determining Ireland to cater
adequately for her own citizens. The fact that a
huge percentage, if not a majority of that
emigration went to the old enemy England only added
vinegar to the already sore and weeping wounds. By
the 1980s one of the most powerful arguments in
favour of maintaining Ulster's even then sectarian
and divided state was its better ability (albeit
generous subsidized by the UK taxpayer) to provide
for her subjects as republican Ireland simply
exported its people, particularly its youth and
womenfolk, in vast numbers.

In his latest book McWilliams is not incorrectly
critical of the disproportionate level of migration
from Eastern European succession states to Ireland:
the main destinations for the vast majority of these
migrants have been the UK and Ireland, quite simply
because of critically unfair bans that prevented
them from entering other European states such as
Germany and France, though in all honesty, Germany
and the central states along former Warsaw Pact
borders have probably already taken far more than
their fair share of escapees from Communism over the
last 50 years than Ireland ever will. However this
created an environment where the only realistic
simple option for migration for many Eastern
Europeans was to the UK or Ireland, and the UK, with
high living costs and disproportionately low minimum
wages, may not be attractive to the less skilled
worker. This perhaps, is why one of the features of
Accession country migrant to Ireland is broad
geographic dispersal, with rural locations highly
attractive to newly arrived migrants, an indeed,
some towns with large populations of migrants from
the same region or indeed, even from a single

It is McWilliams solution however, that is so deeply
flawed. He suggests going out of our way to reverse
the "brain drain" - by deliberately trying to
attract back high achieving children of emigrants
with automatic citizenship rights etc. However this
is highly flawed since Ireland's already generous
citizenship entitlements already effectively grants
equality of citizenship (and an Irish and hence EU
passport) to the grandchildren of previous
emigrants, which by now could include those who left
in the 1980s. So they already have what McWilliams

Secondly, the emphasis on the diaspora buys into the
"brain drain" mythology highly purported in the 80s
in particular - that most Irish emigrants of the
time were highly skilled and highly educated. This
could not have been more incorrect: in fact a
disproportionate level of migration in Ireland was
right up until the early 1990s, poverty driven, and
much of the poverty was not driven by the lack of
opportunity for highly educated (which incidentally,
despite the mythology of the Celtic Tiger, remains
the case - the illiterate builder who left school at
14 is more likely to be a high earner than an
eloquent PhD with a degree in a non-vocational
subject), but by a massive lack of entry level
positions for low skilled workers which existed at
the time, alongside a very low tolerance which
existed as a result for anybody who was less than
100% committed.

As well put in Janet Nolan's excellent study of
Irish women emigrants in the post famile years,
emigration was disproportionate amongst those who
found themselves outside of the established
post-independence power blocs - women, protestants,
the poor and those who were politically outside of
the mainstream. While poverty was a huge driver, it
was not accompanied by McWilliams mythology of
high-powered graduates with elite skills - nor, as a
visit to the Camden Irish centre will teach you -
does it necessarily mean that the children will
suddenly blossom into successful high-achievers
either. Ireland's sad history of emigration is all
too often reflected in the relative level of
deprivation that the post-emigration community as a
whole has experienced - and nowhere is this more
obvious than in the UK, where while there is a
significant level of success, there was and is a
corresponding level of failure - much of it due to
the poor level of education and skills that
emigrants had in the past, which contrasts with
McWilliams (and indeed "official" Ireland's
propaganda of the high skilled brain drain of the

In fact even now, many returning emigrants are not
high skilled achievers, but simply ordinary, not
especially successful people coming home. Those who
left because they were marginalised - the sexually
liberated woman, the atheist, the political radical,
the eccentric - have come back to find themselves
still marginalised. I have anecdotally discovered a
large number of returned emigrants in their 40s who
returned to a career of social welfare dependence
for many years after returning - often quite simply
due to the fact that they left with no skills and
limited education and came back with few more than
they left with. While changes to welfare policy has
made such returns more difficult, its a picture I
have seen a lot of at grassroots level.
No wonder then, the socially conservative and
catholic Poles have been more able to integrate into
rural Ireland. McWilliam's "diaspora" will come
home to find discrimination and shut doors as rife
as they were when they left, especially outside

Not having read the full book I would be surprised if McWilliams has addressed the issue which I see as creating the greatest threat to future economic prosperity - disproportionate incentives to economic inactivity created by disproportionately generous social welfare increases as against rises in the minimum wage, which created a scenario from 2002 onwards where even a single person on welfare living in the private rented sector is financially better off and probably will have a better quality of life than a working person on the minimum wage in the same kind of housing tenure. Welfare dependency has slowed but steadily increased since 2002 and is expected to continue to increase, but much of it is not reflected in unemployment statistics since much of it falls under disability benefit and lone parent allowances. An increasing number of native Irish are "opting" out into a world of welfare dependency and their places are being taken by migrant workers who are excluded from receipt of such benefits until they've 2 years of PRSI payments.

I would expect this figure to rise massively as the economy starts to stall, and unless efforts are made to limit entitlement or the length of time on welfare, this will massively increase and create not only massive drains on the economy, but also drain (as it currently does) badly needed entry level workers in the economy. The end to this dangerous situation is the real solution to Ireland's faltering economy, and NOT increased repatriation as McWilliams suggests.

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