Top 10% own over half of Irish wealth

More than half of the country’s net household wealth rests in the hands of just 10% of the population, while people in less well-off sectors of society owe more than they own.

                                                                  Fr Sean Healey

CSO research shows the top 10% of the country’s richest households own 53.8% of net wealth — defined as real and financial assets minus debt.

The top 5% of households can lay claim to almost 38% of net wealth while 15% of the wealth lies in the pockets of the richest 1%

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At the opposite end of the scale, the data paints a darker picture as the poorest 20% of households owe more than they own.

The figures illustrate the two-tier society that has developed across the country, partly as a result of government policy, according to Fr Sean Healy of Social Justice Ireland.

“These figures emphasise that it was profoundly wrong of the Government to prioritise the better-off in society in the last four budgets,” said Fr Healy. “As resources become available in Budget 2016 and beyond, priority should be given to those hit hardest during the recession — Ireland’s poorest.”

With some of the country’s richest individuals experiencing large-scale losses in the past seven or so years, the level of inequality has not risen to a major degree. However, low- and middle-income families have been badly affected.

“Some people on exorbitantly high incomes have lost out despite recent budgets favouring them and, consequently, inequality has not risen dramatically,” said Fr Healy.

“However, those already struggling to survive have been stretched even further. This was not an accident, this was the result of Government decisions.”

With the Government flagging an equal split of additional funding between spending increases and tax cuts when it announced the budget in October, a much fairer manner of distributing the benefits of recovery would be to put twice the amount into restoration of services, Fr Healy said.

Recent research by the Central Bank points to a higher level of wealth inequality in Ireland than the eurozone average. However, it is less than that in the US.

Research indicates that countries with higher economic inequality suffer from greater unemployment, social instability, and reduced investment, although other academics dispute these effects.

Although open to a degree of statistical error due to the challenges in accessing relevant data, the Irish wealth gap appears to have widened over time, according to Tom Healy, a director of the Nevin Economic Research Institute.

Since the 1980s, a range of factors, including taxation policy, changing demographics, and house price fluctuations may have driven the changes.

Research carried out by Brian Nolan of the ESRI in 1987 showed that the top 10% of the population then owned 42% of net household wealth as opposed to 53% in current times. The top 1% then owned 10% of net wealth.

Mr Healy said wealth distribution has not tended to feature in public discourse here to the same degree as in some other European countries.

“While comprehensive data are hard to come by, Thomas Piketty in his book, Capital in the Twenty-First Century, managed to track the main trends and composition of wealth in a number of large countries such as Britain, France, and Germany,” Mr Healy said.

“Here in Ireland, discussion of wealth has been an under-researched and under-reported area until comparatively recent times.”

Mr Piketty’s best-selling book put the distribution of income and wealth back in the public consciousness last year.

Peter O Dwyer