Business, Employment, and COVID-19
CONOR MCCABE
Drogheda, Ireland 12/05/2020
ABSTRACT
If the Irish government wants businesses to bounce back after the coronavirus pandemic, it needs to address the involuntary costs incurred by the public policy directives that have been imposed to mitigate the present crisis. In this respect, it is vitally important that the upwards of 224,000 firms and 1.5 million people they altogether employ are given the supports that they need at this time. This includes a structured debt write-down for businesses and workers on commercial rents, loans, insurance, and utility bills. Unfortunately, the present administration has shown a clear bias in favour of private finance and commercial landlords over the real economy. As a result, businesses have been forced to cut employment, working hours, and wage levels in order to meet those debts. Unless measures are taken now to protect workers’ incomes and working conditions, Ireland is headed towards an unprecedented depression. There is a clear choice here between protecting the livelihood of workers or the interests of financial institutions and commercial landlords. If the country hopes to enable the non-export, service-based firms most affected by the pandemic to operate once again when this is over, it must save the jobs that keep them in operation.
BACKGROUND
On 6 May 2020 Bewley’s Ireland announced the permanent closure of its historic café on Dublin’s Grafton Street with the loss of 110 jobs. The company said it was suffering because of the impact Covid-19 has had on its revenue but also because of the €1.5 million annual rent owed on the building.1 The company had missed its payment for the second quarter of this year, resulting in a 21-day statutory demand from its landlord, RGRE Grafton Ltd, who threatened to wind up Bewley’s for non-payment. The decision to close was a direct result of this action.
This is not an isolated case. A number of commercial landlords have issued legal threats to tenants who are unable to pay their rent.2 Retail Excellence Ireland recently warned the Irish Minister for Finance, Paschal Donoghue, that by 1 April 2020 just 20pc of commercial rent had been received.3 In response, the company has called for a state-funded rent subsidy scheme that would consist of a 60pc government grant, 20pc tenant rent payment, and a 20pc landlord rent discount.4 Whatever the merits or otherwise of this proposal – which will be discussed further on – it certainly seems to suggest that a write-down estimated upwards of 80pc is needed to keep businesses in operation post-lockdown.
But the issue of commercial rents is not one that lies solely between landlord and tenant. The Covid-19 pandemic has had a devastating effect on employment across the state as tens of thousands of companies have shut their doors to comply with the government’s quarantine measures. As of 30 April 2020 there were 1.24 million people in receipt of one of the four main unemployment and Covid-19 emergency income supports.5 This equates to roughly 50pc of Ireland’s entire workforce (of 2.47 million6). And because they make up the majority of minimum wage and part-time workers, women have been disproportionately impacted. Indeed, findings from the Department of Employment Affairs and Social Protection indicate ‘that those who have lost their job due to the COVID-19 pandemic, or who have been temporarily laid-off, are more likely to be young, low-skilled, female and part-time than the population average.’7
It is also worth noting that the current crisis has unfolded in the wake of a general election that was dominated by the legacy of severe cuts in health, housing, transport, and childcare support as well as issues surrounding the pension age, the overall cost of living, climate action, and the need for greater social cohesion.8 Ireland suffered a devastating financial crash in 2008, made worse by a disastrous bank guarantee that led to an international bailout in 2010 and years of austerity budgets.9 Yet in November 2019 The Taoiseach and leader of Fine Gael, Leo Varadkar, wrote that Ireland had finally turned the corner and had achieved ‘record levels of employment, rising incomes, falling poverty and deprivation, and a budget in surplus despite a difficult and unpredictable global economic environment.’10 In reality, the state’s social infrastructure has been at its breaking point. The cumulative effect of years of cuts and underinvestment is still being felt, hidden beneath the headline figures of a booming economy.
The Irish health system, for instance, has ‘the worst waiting time situation in Europe’ with hospitals ‘working near full capacity.’11 The first full week of 2020 was the ‘worst-ever week for overcrowding’ with 3,143 patients without beds, according to the Irish Nurses and Midwifes Organisation (INMO).12
In terms of housing – a sector that has been severely constrained across the state – there were 68,693 households on local authority social housing waiting lists in 2019,13 with another 45,915 households in receipt of the Housing Assistance Payment (HAP), and 18,697 households in receipt of the Rental Accommodation Scheme (RAS).14 There were 10,148 people in emergency accommodation in February 2020.15 Rents are at an all-time high, with the average monthly rent nationwide at ‘€1,402 in the last three months of 2019, some €659 higher than the low point of the rental market, which was recorded in late 2011.’16
And the state looks no better when it comes to income. According to Social Justice Ireland, ‘the median disposable income per adult in Ireland during 2018 was €22,872 per annum or €438.33 per week’ – the most recent figures available.17 In addition, at least fourteen percent of all adults in Ireland were living below the poverty line.18 For those employed and with small children, the average cost of full-time childcare is €184 per week, while the average part-time fee is €110 per week.19
Even before Covid-19 – at a time of ‘full employment’ – an estimated 1.83 million people were living in households that were unable to face an unexpected financial expense.20 It is little surprise then that a recent pre-lockdown survey found approximately 40pc of Irish workers said that they were living from pay day to pay day.21
This is the backdrop against which the Covid-19 pandemic is being played out. Thus, any solutions proposed to help businesses and workers must speak to these issues as well. This paper will attempt to provide just that. It will look at the government measures taken to address the needs of businesses and workers in the early months of the coronavirus pandemic; the conceptual framework and ideological apparatus that underpins these supports; and possible solutions going forward.
BUSINESS AND EMPLOYMENT SUPPORTS
In its response to the challenges faced by businesses – particularly micro and small to medium-sized businesses (SMEs)22 – the government has been quite weak. In this regard, the schemes that have been put forward reveal a state that is biased towards the interests of private finance and corporate landlords over the health, safety, and livelihood of workers. This is worrying given the enormous challenges that lie ahead as the country plans to re-emerge from the shutdown.
Broadly speaking, the government’s proposed Covid-19 business supports fall under three broad headings: wages, taxation, and loan guarantees.
WAGES
By far the most widespread intervention has been in relation to wages, specifically the Temporary Wage Subsidy Scheme (TWSS) which was initially advocated by the Irish Congress of Trade Unions (ICTU). This payment ‘is available to employers who keep employees on payroll throughout the Covid-19 pandemic, meaning employers can retain links with their employees for when the business picks up after the crisis.’23
Administered under the Revenue Commissioner, the scheme pays up to 70pc of the net weekly pay of employees. Those who earn less than €586 per week will receive up to €410 and those earning greater than €586 but less than €960 will receive €350. The lower rate for the higher wage is intended to reflect the ability of higher-earning firms to pay more of a percentage of the weekly wage to their staff.
As of 30 April 2020, over 50,900 employers were registered with Revenue for the TWSS. According to these figures, over 427,400 employees are in receipt of at least one payment under the scheme at a cost of €712 million to date.24 This equates to 17pc of the workforce and 18pc of all firms in the state.25
TAXATION
In terms of taxation, the government introduced a three-month commercial rates waiver for impacted businesses and the ‘warehousing of tax liabilities for a period of twelve months after recommencement of trading during which time there will be no debt enforcement action taken by Revenue and no interest charge accruing in respect of the warehoused debt’.26
LOAN GUARANTEES
In the main, however, the government has put forward loan schemes and consultancy support as the principal avenues through which businesses may alleviate the pressures they now face in the wake of Covid-19. This has increased already-existing funds with the barest of criteria modifications in an attempt to fit in the issues that the pandemic has now raised.
While it is too early to conclude whether these adaptations will be successful or not, the emerging trends are worrying nonetheless. For one, the thought process behind them is a cause for concern. As will be discussed, the loan schemes appear to have been designed with the profit-seeking interests of banks in mind, and not the nation’s workers. The primary emphasis, therefore, is on ‘gaps’ in the credit market and not the systemic liquidity and solvency crises affecting hundreds of thousands of firms (and their workers) across the state.
At the moment, there are five government-funded loan schemes, three of which are presently in operation (as of 10 May 2020). These include:
- SBCI Covid-19 working Capital Scheme
- Micro-enterprise Covid-19 Loan Fund Scheme
- Sustaining Enterprise Fund
- ISIF Pandemic Stabilisation and Recovery fund (pending legislation)
- Covid-19 Credit Guarantee Scheme (pending legislation)
A further two have been announced but will require new legislation (and a new government) before they can be implemented. In addition, a Restart Fund for Micro and Small Businesses was recently announced, but the details have yet to be finalised.
The SBCI Covid-19 Working Capital Scheme
The Covid-19 Working Capital Scheme is administered by the Strategic Banking Corporation of Ireland (SBCI). It aims to service SMEs with loans between €25,000 and €1.5m. These are provided by AIB, Bank of Ireland, and Ulster Bank. Loan approval is subject to each bank’s own credit policies and procedures. In other words, the banks make the decisions as to whether or not loans will be issued. Hence, these decisions will be based on their own (for-profit) criteria and not in the interests of keeping companies afloat. Shareholder value for private banks – and not the broader economy – thereby becomes the overarching criteria for selection.
Interest is also charged on the loans, capped at 4pc, meaning that the banks will profit from the scheme. Loans can only be used to fund future working capital requirements or ‘to fund innovation, change or adaptation of the business to mitigate the impact of Covid-19’.27 To date (7 May 2020), 156 loans have been approved to the value of €16.4m.28
The Micro-Enterprise Covid-19 Loan Fund Scheme
The Micro-enterprise Covid-19 Loan Fund Scheme provides loans of up to €50,000 for enterprises with fewer than 10 full-time employees; less than €2m annual turnover; and a balance sheet that does not exceed €2m. Originally, the interest rate was 6.8% if submitted through Local Enterprise Office or referred by your Bank, or 7.8% if you apply to the Dept. of Business and Enterprise directly. However, due to pressures put on the government by opposition and business groups, these were reduced to 4.5% and 5.5%, respectively. Micro-enterprises can only apply if they are having difficulty in accessing finance from Banks and/or other commercial lending providers – reflecting its pre-Covid-19 criteria. As of 7 May 2020, 321 applications have been made with 245 loans approved to the value of €5.2m.29
The Sustaining Enterprise Fund
The Sustaining Enterprise Fund has a total budget of €180m. It allows for advances of up to €800,000 for businesses for specific projects. It is open to all companies with more than ten employees. All applicants must submit a business project plan which will enable the company to be financially viable. Applicants must also present evidence of additional funding sources, which are required outside of the fund itself. These advances carry a three-year repayment grace, but are subject to a 4pc administration fee.
In this light, it is hard to see how the scheme will play out at a structural level in terms of the actually existing recession that has been caused by Covid-19. But it is predicted that we will be facing a global recession of 3pc and a fall in Irish GDP of around 10.5pc. And because the Sustaining Enterprise Fund requires businesses to submit a credible future plan for sustainability and/or growth, only five applications had been received as of 7 May 2020, none of which have been approved.30
The Irish Strategic Investment Fund (ISIF) Pandemic Stabilisation and Recovery Fund
On 2 May 2020, the government announced another two loan schemes, the first of which was the Irish Strategic Investment Fund (ISIF) Pandemic Stabilisation and Recovery fund. With a seemingly impressive €2 billion behind it, the fund was rolled out as an investment vehicle that would operate ‘on a commercial basis in medium and large scale enterprises [original emphasis], which are significant employers, and which have been negatively and materially impacted by the pandemic’.31 Under this scheme, all ‘investments will need to yield a commercial and economic impact return in line with ISIF’s statutory requirements’ and the ‘ISIF will only invest on a commercial basis, in enterprises that present viable business models in the medium to long term’.32
The stringent commercial investment terms – by which only enterprises with more than 250 employees and a turnover in excess of €50m can apply – are such that very few businesses will qualify for and/or partake in the scheme. What’s more is that there is no mention of Covid-19 at all. So, while the announcement of a €2bn fund certainly sounds impressive and presents the government as taking the situation very seriously, the implicit acknowledgement outlaid in the fine print – that it will unlikely be fully (or even partially) drawn upon for Covid-19 reasons – ultimately amounts to presenting the scheme as no more than a cynical political exercise.
The Covid-19 Credit Guarantee Scheme
The second loan scheme awaiting legislation is the Covid-19 Credit Guarantee Scheme. This will be an extension of the existing 80pc credit guarantee scheme administered by the Strategic Banking Corporation of Ireland, with an added €2bn made available. It aims to support loans to SMES in amounts up to €1 million and for up to 7 years. Applications will be made to AIB, Bank of Ireland and Ulster Bank directly.
The interest rates will be calculated in accordance with the normal business loan rates of each respective bank, plus an additional 0.5% charge because of the government guarantee. According to the legislative proposal, the scheme ‘does not substitute for conventional lending that would otherwise have taken place [my emphasis]’.33 As follows, the Department of Business, Enterprise and Innovation (which funds the scheme through the guarantee) will play ‘no role in the application or decision-making process, which, is fully delegated to the participating lenders’.34
In other words, the loans will be issued at the respective bank’s market interest rates. As with the other schemes, the private banks will have final say in issuing loans and therefore which businesses will be supported and how each will be charged. There will be no input from the government in terms of directing the course of strategic lending to, say, the most affected sectors and regions of the state.
The Restart Fund for Micro and Small Businesses
The final scheme requiring new legislation – and the only direct grant aid support to businesses – is the Restart Fund for Micro and Small Businesses. This will make available a €10,000 restart grant to SMEs that paid commercial rates in 2019. The total funding that will be made available is €250m, which is enough for 25,000 SMEs. Crucially, it is the only scheme that directly speaks to the costs incurred as a result of the lock-down.
However, the Central Bank of Ireland (CBI) estimates that with 95,968 firms in “highly affected sectors” and 128,505 in “moderately affected sectors,” there are 224,47335 firms in total in need of these supports. But this figure is almost ten times more than the number provided in the Restart Fund.
Additionally, Chambers Ireland estimates that the overhead cost for a covid-19-affected business is around €2,000 a week. Restocking costs are expected to fall between €2,000 and €8,000.36 With a twelve-week lockdown, that gives an average overhead cost of around €26,000 to €32,000 per firm. Overall, the CBI calculates liquidity needs for all affected firms across the state will figure between €2.4 billion and €5.7 billion37, which is significantly higher than the funds that will be made available under this scheme.
THE DEBT CYCLE
Taken together, these schemes bring into question the logics by which the government has attempted to mitigate the coronavirus pandemic. Although a significant percentage of Irish firms cannot generate income at this time, they are still being held to account for rent and debt repayments in addition to utilities charges as though nothing has happened at all.
Indeed, the government response so far has been to defer payments, not to get rid of them. As a result, businesses are now faced with a mounting debt – one which has been incurred during the months they were told to shut down their operations. At the same time, the government is offering loan supports, which will presumably be used to make repayments on these debts, even though businesses are not in a position to take on additional financial burdens for non-productive purposes. It is no surprise then that the take-up of these loans has been weak thus far.
But the consequences of the government’s continued inaction on this growing business debt and rent burden cannot be understated. Left unabated, there will certainly be non-openings nationwide and continued mass unemployment. On this note, I turn to a study of the employment and regional imprint of affected sectors to illustrate the scale of these potential outcomes.
COVID-19 AFFECTED BUSINESSES AND EMPLOYMENT
According to a study commissioned by the Regional Assemblies of Ireland, by September 2019 there were 160,438 occupied commercial units with an allocated NACE code classification.38 Of these, 46pc or 73,735 commercial units were operating in the worst affected sectors. Virtually all of these commercial units were predicted to be severely impacted by the outbreak of Covid-19.39
In Kerry, 53.8pc of all commercial units operate in these sectors, followed by Westmeath (51pc), Donegal (50.6pc), Cavan (50.5pc), Clare (50.4pc), Wexford (50.4pc), Meath (50.3pc) and Longford (50pc).40 Dublin has the highest number of affected units (14,360) but the lowest number as a percentage of overall commercial units in the county (39.4pc).41
In its Commercial Property Report Q4 2019, GeoDirectory highlighted a number of notable trends in commercial lets across main urban areas since 2010.42 These have led to 1) an increasing café and bar culture; 2) a greater number of beauty salons and personal grooming establishments; and 3) a growing preoccupation with health, fitness and well-being’.43 It was noted that
“… a very strong increase in the number of cafés in the main urban areas, with an additional 733 cafés opened over the past decade, resulting in a population of 1,990 cafés at the end of 2019… a preoccupation with health, fitness and well-being has seen 520 new gyms added to the GeoDirectory database between 2010 and 2019, generating a substantial increase of 167pc to 831 outlets… There has been strong growth also in the number of beauty/grooming services, with 4,721 premises counted in 2019, and increase of 22pc or 854 units since 2010.”44
It also noted that ‘services occupy 48.4pc of the total commercial units at a national level with 79,009 address points in Q4 2019’.45
Given this level of commercial lets in services and growth since 2010, it is clear that commercial rents and public liability insurances will be core issues for a great number of businesses in coming months – altogether dictating whether or not they reopen. And the matter will only be compounded by the expected drop in demand for services.
It also shows that with 46pc of all commercial premises in the state having been directly affected by Covid-19, the Irish state must treat this as a systemic issue that cannot be dismissed as an individual concern on a case-by-case basis between particular firms and their respective landlords and insurers.
BANK DEBT AND TRADE CREDIT
In terms of commercial debt, there are two principal elements to consider: bank debt and trade credit.
In 2017, 50pc of SMEs in Ireland were beholden to some form of bank debt, which indicated a 100% increase from 2013 when 25pc of SMEs were in debt.46 But by September 2019, roughly 60pc of SMEs were recorded as not holding any bank debt.47 This reflected a 10pc decrease from 2017.
The figures, however, were not merely the result of prudent planning on part of Irish small and medium-sized enterprises. In 2019, the OECD found that loans to SMEs ‘are more often turned down than in the EU 28 average, both for bank loans and for overdraft or credit lines’ and that there was ‘a sharp uptick in credit refusals in Q2 2018, rising from 24pc to 36pc’.48
Irish banks reject outright 46pc of all bank loan applications, whereas the EU average is 27pc. On top of this, the ‘demand for guarantees, especially personal guarantees… also discourages Irish enterprises, especially smaller ones, from taking a bank loan’.49 The OECD also found that interest rates ‘remain well above the euro zone average’ with Irish banks charging an average of 4pc as opposed to the euro zone average of 2.07pc.50
Given this history, the Irish government’s decision to leave allocation of Covid-19 loans purely in the hands of banks is the wrong one. It also shows the folly of charging interest and demanding guarantees as central conditions for these loans. Such an approach almost guarantees that uptake will be much lower than what is actually needed.
The reluctance of banks over the years to lend, and of SMEs to borrow on such terms, has led to a spike in trade credit, which is a loan extended by one trader to another when the goods and services are bought on credit. According to the OECD, ‘trade credit is used a lot more by Irish SMEs than by their counterparts in other European countries (up to 35pc more)’.51 This gives rise to a possible Covid-19 ‘domino effect’ as SMEs are exposed to business-to-business credit chains that begin to unravel as soon as invoice payments are missed.
The CBI estimates that ‘purchases by customer firms affected by Covid-19 are likely to have been €35-€40bn in 2019’.52 It notes that in Q3 2019, ‘trade credit liabilities stood at €250bn in aggregate outstanding amounts. This constituted 13pc of all Irish NFC [non-financial company] liabilities, and was equivalent to 38pc of the size of outstanding NFC loan liabilities’.53 These figures are dominated by the multinational sector in Ireland, but if ‘even a relatively small percentage of the aggregate stock of trade credit is compromised due to Covid-19, the cascading effects could be large’.54 Chambers Ireland , in its April 2020 business survey, found that 68pc of businesses are awaiting invoice payments, and that the median amount due was €40,000.55
On account of these figures and exposures, the CBI concludes, quite rightly, that those ‘designing policy interventions to support enterprise liquidity, whether they be through loan supports, loan guarantees or direct grants, should consider the importance of outstanding trade credit liabilities as of March 2020 being met’.56 The consequences of non-action or a weak, half-hearted approach would be horrendous.
SOLUTIONS
The main issues facing SMEs most directly affected by Covid-19 are the (1) collapse in consumer demand; (2) commercial rents and public liability; (3) trade credit; and (4) financial debt. The need for continued social distancing after the lockdown is lifted, along with significant levels of unemployment, will have a substantial impact on SME income in both the short and medium terms. As these measures cannot be avoided – until a vaccine is developed at the very least – it means we must look at other areas for movement in order to keep as many affected SMEs operational and people employed as possible.
Although businesses are shut, they still have expenses to meet such as rent, rates, tax, insurance, trade credit, debt repayments and utility bills. The combined costs for affected businesses in the Republic has been estimated by the Central Bank of Ireland at between €2.4bn and €5.7bn for each twelve-week shutdown period. With no income generating during this time, it is clear that many will not be in a position to meet these costs, leaving them in serious debt and possible bankruptcy or facing a permanent shutdown. This has to be avoided if we are to lower unemployment and get the economy going again. In other words, some form of debt and rent write-down has to be part of the overall post-lockdown strategy.
A large-scale debt write-down of this kind would have a significant effect on the balance sheets of banks and property management companies. However, the European Central Bank recognises this and has already relaxed banking rules to give banks more flexibility, enabling them to absorb losses on loans and still operate as banks. It has also unleashed a set of liquidity mechanisms to ensure that both banks and corporations have a continued cash flow even where they have increased levels of non-functioning loans and assets on their books. Additionally, it should be noted that the ECB can deal directly with banks and bond-issuing corporates but not individual SMEs. This is why SME debt should be channelled where possible through the books of banks in order to come under the purview of the ECB and feel its effects.
The ECB has even started discussing a possible European-wide “bad bank” that will take non-performing loans off the books. There will be great resistance to this in more fiscally conservative states but the fact that the discussion is happening is an indication of where the ECB’s thinking is these days.
Although the situation is constantly evolving, the measures that have already been announced have altogether shown that the ECB (and indeed the BOE) have learnt from the 2008 crisis and will do what it takes to keep financial flows operating so as to accommodate large-scale debt restructuring — if the political will is there to facilitate the process.
The other alternative is for the government to give companies grants to help them meet their non-wage expenses. This will run to tens of billions of euro and will ultimately benefit banks and corporate landlords – even though the ECB is putting in measures to facilitate large-scale debt write-down. For example, Retail Excellence Ireland has suggested that the government give SMEs a grant to cover 60pc of their quarterly rent, with the firms paying 20pc and the landlords giving a 20pc write-down.
Such a move, however, is not a bailout of firms but of landlords. The grant goes through the books of the company, but ends up in the account of the landlord. And for what purpose? Were the Irish government to go down this road, banks and landlords would be effectively bailed out with little left over for the type of stimulus needed to reactivate the economy. This has to be avoided.
Indeed, we must do whatever we can to avoid businesses shutting down permanently. A structured debt write-down for workers and businesses is essential to help the economy reboot itself. It is the role of the ECB — not hairdressers, restaurants, and gyms — to ensure that otherwise healthy banks and companies remain solvent. The ECB, for its part, has made clear that it is willing to honour its responsibilities.
Financial debt is a creature of accountancy and the law. It has no physical presence but has a coercive power, due to state enforcement of its mechanisms. Rent, for its part, is essentially parasitic. Both are tolerated in normal economic times, but in times of crisis it is folly for the state to privilege profits over the survival of the real economy.
In terms of trade credit, it will be necessary for SMEs to borrow to meet those commitments. It is vital that those invoices are paid in order to avoid a systemic crisis. And in order to facilitate that process, all Covid-19 loans should be at the very least interest-free and backed with a full government guarantee. On this account, there is even a case for Covid-19 loans to be issued at a negative-interest rate, given that the ECB has announced such a scheme for financial institutions.57
In this regard, it is worth clarifying that ”state supports” include any grants, loans, or tax breaks that may be availed of – regardless of their size – as well as any public procurement contracts. But state supports to SMEs must also come in tandem with supports for employees – including raising the minimum wage to a living wage, granting trade unions right to access in the workplace, and full trade union recognition by employers.
Finally, it is important that the issues that dominated the recent general election be addressed. There is an absolute need for a major nationwide public housing building programme. Housing must be made an essential public service, as well as a constitutional right, so that the needs of the community are not superseded by the profit-seeking rights of land-hoarders. This will tackle both the rent crisis and housing lists, and act as a stimulus to work creation and community re-development. No public land should be sold off to private developers – indeed, there should only be public housing on public land. All ‘co-living’ units should be banned on the grounds of public health and safety.
The move towards a single-tier health system must also be continued. It cannot be reversed. Covid-19 has shown that despite decades of blockage and bluster it was entirely within the powers of government to create a single-tier system if it had the desire to do so. The current hold-out of 600 consultants cannot be used to stifle and thwart this change.
As part of this process, all Section 39 workers should be reclassified as public sector workers. They provide healthcare, elderly, substance abuse, suicide prevention, and social inclusion supports, as well as education, community development and many other services in communities across the state. We cannot continue the current two-tier system of rights and conditions that exist for workers in these sectors. Childcare also needs to be seen as a community service, based on a public service, not for-profit, model. All childcare workers should be reclassified as public sector workers.
Ireland post-lockdown can be, and must be, a place of hope. We need to protect SMEs and the best way to do this while protecting public investment is to have a co-ordinated commercial rent and financial debt write-down with liquidity made available to help SMEs meet any outstanding invoices. But there is no point in protecting the Irish economy simply to have it return to the way it was before. There is a palpable need for investment in health, housing, and childcare; a rewriting of our labour laws to help our trade unions grow; a mandatory living wage for all workers; and the development of an ambitious climate action plan in order to meet our international targets by 2030.
None of this can be done with the thinking of old. Treating the Covid-19 pandemic as a ‘market’ event that can be addressed with ‘market’ measures will prove disastrous. While much of what we have been dealing with in this present moment of crisis may appear to be unprecedented by all accounts, the truth is that we have in many ways been here before. We cannot do the same again. On this note, this paper is presented as a small contribution towards challenging the old way of thinking, showing not only why it needs to be challenged but also the possibilities of changing the course of what may come as we go forward together.