Last week, Young Fine Gael made an excellent attempt to outdo their daddy party in the contempt for the commoners race when their proposal of an “Earned income Tax Credit” surfaced on Broadsheet.ie.
In a recommendation full of political buzzwords that comes right out of an essay by a 3rd year Law and Economics student, this proposed ‘twofold strategy’ would see a ‘restructure’ of how minimum wage is paid by employers which would take €2 off what businesses had to pay minimum wage employees. So instead of the 8.65 employers would normally pay an experienced employee, they would pay only 6.65. For workers under the age of 18, this new pay rate would see them be paid only 4.06 by employers. But don’t worry folks, that two euro that your boss isn’t paying you will be given back to you in the form of a tax credit by the government (read taxpayers/yourself) so it all works out even in the end right?
According to YFG, this policy is a ‘third way’ insofar as it seemingly is both a pro-business policy aimed at “job growth and thus economic growth” but also a pro-worker because it “maintains standards of living for low paid workers and it will create jobs for those seeking work”. Somehow I don’t see someone on minimum wage maintaining an already precarious standard of living when under this new scheme; a worker on a forty hour week will see a decrease in their wages from 346 per week to 266. But what about the tax breaks?
While tax breaks are all good and well, the immediate reality of such a reduction of a minimum wage on an earner supporting a family as well as paying the constant increase in charges and ghost taxes as your public services are being privatized piecemeal is indicative of the race to the bottom we’re seeing under Ireland’s austerity program. While you won’t be paying that little extra in tax, you sure as hell will be paying more for something else be it a water charge or an increase on your bus or rail fare as you commute to your now lower paying place of employment.
But who does this benefit and will we see the job creation this government has been claiming to be succeeding at with their economic policies of youth emigration and slave internships? Not likely in my opinion. While I’m sure this measure would be some small rest bite to small businesses and employers who are struggling to keep open and pay staff, it will do little for them to take on new staff when all they are doing is trying to stay open. Who it benefits are ultimately the companies who can afford to pay the minimum wage we already have and who already are doing quite well in austerity Ireland and our low corporate tax rate. While they might have a way to go yet, the Young Fine Gael padawans are certainly coming on in their neo-liberal hate for everyone except the rich.