There was a bit of controversy this week when the ESRI published a report (since withdrawn) about the Costs of Working In Ireland . The media picked out the best bits for their headlines – and announced that 44% of working families with children would be financially better off unemployed. The fact that the ESRI withdrew the report has made some people think it must be true and they are trying to cover it up.
We have seen the report and it is probably closer to the truth that it was withdrawn because the figures used and the conclusions are wrong.
The ESRI report uses spending figures from 2004 on meals away from home and clothes as if these are valid “costs of working” . The report tries to say that people who work have these extra costs – such as clothes, transport and food consumed away from home . What the figures probably mean – is that people who work spend more on eating out and on new clothes that the unemployed – because they have more disposable income and they want to treat themselves.
The ESRI report suggests that an employed person without children has additional costs of working of €140 per week, or almost €7000. (Compared to a similar person on the dole).
This extra “cost” they say is made up of €20 a week on clothes, €40 a week on meals out or take aways and €80 a week on transport.
Where the report seems to be flawed – is the way it assumes that this extra spending is not optional and is only spent because people are working.
It is more likely that the extra spending is a choice – : if people have more money they are more likely to spend it on going out for meals and new clothes.
NB: It might be a coincidence that the government are soon due to decide on plans for a Single Social Assistance Payment for People of Working Age . The changes – according to Joan Burton “must ensure that work pays”