Low pay - A merry christmas for the gombeen man


Christmas has increasingly become a matter of spending money on presents, rather than spending time with your loved ones. Where this might be hard for some, it can be financially unbearable for others. In order to meet the expectations from the society and avoid humiliation, we take up loans to get through family events such as Christmas.
In 2005 half of the Irish population earned 337,48E or less per week. When we combine this with the massive price of accommodation and general high cost of living in Ireland, it isn’t hard to imagine that at the end of the day, most of us won’t have much to save up after general expenses have been paid.

For these reasons many people find it necessary take up a loan to get by Christmas, birthdays, holidays, Halloween, Communion etc. Taking up a loan can be a very expensive experience, and the easiest loans to get are often the ones charging the highest interest rates. Moneylenders have a reputation for being a very convenient way of getting a loan, but they charge an Annual Percentage Rate of on average 129,29%, which makes them a Christmas experience likely to last you until next year. It is a lot cheaper to take up a loan with for instance a Credit Union, who are not allowed to charge more than 1% per month in interests. However, not everyone have access to such loans due to a bad credit history. The need for loans during Christmas is reflected in the Credit Unions services, which includes “Christmas loans” and in the Money Advice and Budgeting service who found, that 33% of loans taken up with moneylenders was for family events such as Christmas.

Despite all the rhetoric about the “Celtic Tiger”, Irish wages are still too low to live up to the consumption expected by to days consumer society. This is one of capitalisms many paradoxes; earnings have to be kept low to maintain comparative advantage on the world market while the creation of a high need for consumption is necessary to increase revenue. This is not something that can be reformed out of capitalism, it’s intrinsic to the way it works. Replacing a system built on profit with one built on human need and happiness is the only real solution to this problem, but until then we have to continue the fight for higher wages - and avoid the expensive loans peddled out by dodgy lenders.

This article is from
Workers Solidarity 101, January - February 2008