Unleashing the Safety Valve: How Many People will be Left in Ireland at this Time Next Year?

This week’s Trinity News*, the student newspaper at Trinity College Dublin, carries a stark headline: MOST STUDENTS WILL EMIGRATE. It is followed by three bullet points detailing the results of an online poll of TCD students by the newspaper:

  • 85% of TCD students plan to emigrate
  • Lecturers advising students to leave
  • Unemployment rate has tripled

The old familiar spectre of emigration has been ever more present in Ireland in the past year, as the country continues to reel from the fall-out of the economic crisis. This week’s draconian budget won’t offer much incentive for those with itchy feet to stay put. So news of impending emigration is in some ways hardly news, although I was frankly surprised at TCD’s 85% figure.

The article also contained some provocative quotes from current and former TCD students. TCD economics graduate Robert Quinn, now studying at Princeton University in the US, said:

Being Irish definitely gives you celebrity status over here, but not in a good way. Everyone wants to know how we messed it up so badly. As an economics student it’s especially difficult to have my opinion taken seriously. We really are the laughing stock of the world.

The Trinity News unfortunately doesn’t include any information about the methodology of its poll. My guess is that it was either an open online survey or that the paper emailed TCD students directly and requested their participation. If either of these options are the case, it is possible that those most likely to emigrate were the most motivated to take the poll – they would feel more exercised about the issue and have more to say.

There also is no information about the sample size, i.e. how many students actually took the poll. The larger the sample size, of course, the more likely the results are to be an accurate representation of sentiment on the Dublin campus.

But similarly, last week an Irish Examiner/Lansdowne Millward Brown poll revealed that 33% of people between 18-24 plan to leave Ireland in the next year. That figure was 10% across all age groups, including 12% of all men.

Those statistics are not quite as shocking as the TCD figure, but they are still alarmingly high. As the Examiner’s editorial opines,

It is also a terrible blow to the country’s confidence when so many of our brightest young people vote with their feet. Unemployment is usually the reason but this time around the air of pessimism hanging over the country has been the deciding factor for some.

The news has been so relentlessly depressing that people have opted out and decided not to listen any more. Though utterly understandable this detachment, this kind of denial contributed to getting us into this mess. As we try to remake this misused country, that denial is not an option. We will have to uncover the layers of privilege, the self-centred hypocrisy that have contributed to our downfall. We cannot do that without involvement that can sometimes be depressing.

On the other hand, the article in the Trinity News reported that 28% of those who said they were planning to emigrate were not doing so for economic reasons. These respondents were also the most likely to say that they would go away to gain skills and then come back to Ireland.

That is perhaps not a million miles away from what Mary Couglan claimed back in February – that young people were only leaving Ireland to enjoy themselves:

“The type of people who have left, some of them find they want to enjoy themselves and that’s what young people are entitled to do. Moreover, they are coming with a different talent, they are coming with degrees, PhDs, they have a greater acumen academically and have found work in other parts of the world and that’s not a bad thing.”

But Couglan undercut her assertion by saying the Irish ‘feel good about ourselves’ and comparing Ireland to the poorest countries in the world. This was to counter claims that the Government was not offering ‘hope’:

“We do feel good about ourselves. In comparison to others who are much less well off in the world, we are doing relatively well.”

Not so long ago, Irish people thought that their leaders had gotten beyond comparing the country to third world economies and would no longer consider emigration as a legitimate safety valve for failed economic policies. It looks like this is no longer the case.

*  This article has not been posted in the online edition of Trinity News

  • John East Belfast

    Long term rates of Income tax will start to play a major factor here.

    If you are young, bright, well educated and computer literate then top rates of Income Tax of 16% in Hong Kong or even 28% in the US are going to be a lot more attractive than what the ROI state is going to have to extract from you to pay for the mistakes of your parent’s generation.

    That is the problem with Low Corporate v High Income Tax – you might get corporates in the front door but you will lose your best and brightest out the back door.

  • John Ó Néill

    Some of this needs to be contextualised against the emigration rates during the ‘boom’ years – see figure 1 in this paper. While it is obviously a reality, superficially, people in that age group (particularly a typical TCD or UCD student) left for a year or two (to travel, work in Australia etc) up to 2008 or so and no-one commented on it (other than the parents who bank-rolled it). I’ve no link to any specific stats regarding students (TCD and UCD probably hold them as alumni data, or they may be on their websites somewhere). The headline grabbing figures should really explore the net migration statistics (they could have requested the alumni data from TCD after all – it may be in that article but isn’t available on the web yet).
    Broadly speaking, year-on-year emigration was about 25,0000-35,0000. The difference in the next few years may be that more families emigrate (if they aren’t captive to the property market). It will be interesting to see how far emigrant stories (of the Irish abroad rather than immigrants in Ireland) feature as zeitgeist among the general Christmas tv fair.

  • fitzjameshorse1745

    If ALL economic graduates left Ireland…..would we really notice? And should we care?
    After all the Banks were run by economics graduates.
    So rounding all economists up and deporting them to the rest of the world is not a prospect that annoys me. On the other hand leaving teaching and nursing vacancies in Irish hospitals while teachers and nurses trained at Irish taxpayers expense go abroad is a national scandal.

    To some extent Mary Couglan is right that over the past 20 years young Irish people have gne abroad to “enjoy themselves” . Indeed having an Irish accent in some parts of the world is a guarantee of enjoyment.
    But of course Deputy Coughlans words ring rather hollow now.

  • John East Belfast

    FJH1745

    “On the other hand leaving teaching and nursing vacancies in Irish hospitals while teachers and nurses trained at Irish taxpayers expense go abroad is a national scandal.”

    I agree and it is the same with all the protests going on at the minute in the UK as these fee increases go through Westminster

    Universal Free Third Level Education was possibly affordable when I went through it in the mid eighties when only about 5% of the population did so – but after Tony Blair decided half the population go through at tax payers expense it no longer adds up.

    Hence if the state is going to pay for Third Level Education then three major hurdles should be set

    1. Not all degrees are treated the same for state funding – we should concentrate on vocational degrees for a start and not generalist. The private sector should be encouraged to offer scholarships for the best o the latter.

    2. Not all graduates are treated the same for state funding – ie the quality of their minds becomes more important than the income of their parents

    3. and your point – they need to commit post graduation – to stay in the country and work for a number of years and pay taxes there

    That the Tax payer should pay for every degree – no matter what its quality or worth for half the population – and be guaranteed nothing in return is just daft

  • fitzjameshorse1745

    JohnEastBelfast,
    I no longer have a direct interest in Education. Its odd because a few years ago as it was my #1 priority.
    Its odd that we spend a lot of our adult years discovering a new area of self interest (tax rates, mortgage rates, kids education) and then spend our declining years losing areas of self-interest.
    Its surprisingly empowering.
    Of course as we lose graduates abroad…..we get graduates FROM abroad.
    Its a revolving door. Some we clearly need. Some we dont need.

  • Cynic

    This article all total utter hysterical bollox but typical of what happens at a time like this

    Let me make a forecast for you.In five years time the Irish Economy will be on the up again with growth at steady rates and most of the financial pain a sad but distant memory.

    There will still be an overhang of supply of housing – but when were cheap houses ever a major problem – and for most people who buy a home to live in it, they will be happy to stay put and in the long term inflation will wipe out their paper losses and put them back into profit. Cheap housing will also help contain wage inflation and with low corporation tax unemployment will be lower – the real key to growth.

  • John East Belfast

    Cynic

    That is pretty wishful thinking.

    However the reality is that ROI State Net Debt is going from healthy 20% of GDP to over 100% and interest paymentsalone thereon are going to consume at least a third of Annual Govt Income at current levels.

    House prices have further to fall to revert to mean levels governed by Income Levels and Rental yields and will take 20 years to get back to the abnormal levels of 2007.

  • Mack

    1. MNC sector is booming
    2. Best paid jobs in Europe outside of London
    3. Income tax rates roughly comparable with UK
    4. 10 holidays per anum in USA, poor social protection etc
    5. Family ties
    6. Rental yields pitiful in 2007

  • slug

    What is the marginal tax rate in ROI for someone on say £70k?

  • Mack

    41% income tax
    11% USC & PRSI

    52% all in.

    Still relatively high tax credits, married couple tax incentives etc.

  • Mack

    For singles

    Net wage =
    £47,610.40
    €50,973

    Married =
    £47,610.40
    €54,500

  • slug

    At what income does that 52% start?

  • fitzjameshorse1745

    I think things WILL get better but five years does seem wishful thinking.
    But the nation has been thru worse.
    Ten years, fifteen years will be better but many wont live to see it. For many people who are already elderly, they have I am afraid got little to look forward to.
    Fifteen years time….economically Ireland might well be a better place.
    But politically.?
    And crucially the relationship between the People and the State?

  • slug

    This breaking story in WSJ is pertinent regarding tax competition and the “race to the competition”

    http://online.wsj.com/article/BT-CO-20101209-707915.html

    It seems the UK is to exempt tax from offshore earnings from CT , which makes it more competitive with Ireland presumably. (And of course CT rates on domestic UK profits is falling down over the next 4 years in UK.)

  • Mack

    After yesterday €32 or so. The tax system operates differently there are more Milton Friedman style tax credits in the south (which is why until yesterday almost half of all workers didn’t pay income tax)..

  • Cynic

    John

    I disagree on the wishful thinking. That’s what will happen. It may take 7 years rather than 5 but it is almost inevitable. Market fears always overhand political and economic changes so the turn around may well already have started – we just cant see it yet

  • slug

    One thing that I didn’t like about the south tax system is that artists didni’t pay tax. Has that gone , Mack?

    Generally, in public economics, one is taught that tax should be spread evenly. Its distortionary if you don’t pay tax in “occupation x” but do in “occupation y”.

  • 21stcentury fenian

    Have to agree with Cynic and barring an external i.e. global / international economic shock, would even say the turnaround will come a lot sooner than 5 years. Value investors who seek out distressed assets about to turn are beginning to look at Irish equities / property / debt. You won’t read this in the MSM until it’s well underway though.

    It’s a little amusing to see that after spending the last 3 months trying and largely failing to stir up anger in Irish society, the British media are belatedly waking up to violent discontent a lot closer to home. That Bentley will need a new paint job 😉

  • Greagoir O Frainclin

    “How Many People will be Left in Ireland at this Time Next Year?”

    There will be 3 people left in Ireland this time next year!

  • barnshee

    “Unleashing the Safety Valve: How Many People will be Left in Ireland at this Time Next Year?”

    Too many– for a rain soaked hole with zero natural resources other than peat

  • George

    Slug,
    it isn’t that artists don’t pay tax, it’s that they don’t pay tax on their creative earnings. Most artists have to work part-time to actually make a living at all and couldn’t survive on what they get on commission and sales alone.

    The situation now is that the first 40k on artists’ earnings is tax free.

  • Mack

    I would guess the argument for it is that artists may earn money at infrequent intervals and taxing that income in the same way as earnings from more regular income would be unfair. So if one year an artist earns €100k (70k of it taxed @ 52%) but the next two years the artist earns nothing, the artist would be paying a lot more tax than a PAYE worker earning €33k per year..

  • Greenflag

    Back in the mid 1980’s when Ireland was very nearly put upon by the IMF for their decade long tardiness in not taking timely action against much higher oil prices and inflation our Tanaiste Mr Lenihan (father of the present Finance Minister) at the time made the point as 250,000 young people left Ireland that we were after all only a small island and couldn’t expect to find jobs for all those people . At the time the population was about 3,4 million or a million less than today .

    I expect strong recovery will come sooner than later and that there will be a default and that some of the German , French and British bankers /investors will be made to take a haircut but it will be post 2013 or whenever the ‘new order’ in the ECB is established .

  • Esteban

    At the height of the boom, economists were warning that the demographic problem was going to have to be faced or things could go awry. Unless you slaughter your pensioners and/or force your young people to stay in Ireland, you are facing bigger trouble than has been admitted so far.