After decades of bloody turmoil between Protestants and Catholics in Northern Ireland, on March 26, 2007, Ian Paisley and Gerry Adams, sitting side-by-side at Stormont confirmed that power-sharing will return to Northern Ireland on May 8th of that same year. It was supposed to be a “new era.” Unfortunately, in order for Ireland to recover from decades of a very complicated history it needs a growing economy. Northern Ireland’s economy is in steep decline because it remains such a high-taxed welfare state.
For example, jobless remains at extremely high levels. The BBC reports that between June and August of 2011 8.1% of the population were unemployed. In fact,
Over the year, the number of people claiming unemployment benefit has increased by 4.8%, to 63,400, while in the UK as a whole the figure has fallen by 1.4%. A large proportion of the unemployed are young people, with 21.1% of those between aged between 18 and 24 now unemployed, up 3.0% over the year.
Northern Ireland also has high minimum wage rates—about $7.87/hr for workers 18-20 years-old—and a ridiculous corporate tax rate of 24%. This “one-two punch” does nothing but discourage the starting of new businesses, foreign direct investment, and provide incentives for companies not to hire young people. The Central Bank of Ireland, in a moment of common sense, now believes that maybe, just maybe, high corporate taxes stifle job creation. According to the BBC,
The CBI in Northern Ireland said the latest figures were disappointing and that it should be made easier for business to create jobs. In a statement it said lowering corporation tax would be a way to help. “Furthermore, we need to tackle the burden of employment regulation – and we would encourage businesses to support the Youth Employment Scheme, which provides support for any business who hires a young person between the ages of 18-24,” it said.
As a result, Northern Ireland is hemorrhaging young adults. Even worse, according to recent data about 1,000 per week are leaving all of Ireland in search of jobs. Young people are moving to Australia, Canada, and the United States. Can you blame them? In New York City, it’s rare to go an “Irish Pub” that does not have bona fide bartenders native to Ireland.
Americans should pay attention to what is happening across the pond so that when politicians speak about increasing the minimum wage and raising corporate tax rates, so businesses can pay their “fair share,” we raises questions because there is real hard data in other parts of the developed world demonstrating the deleterious long-term consequences welfare states and planned economies. Super-sized government is not working in Europe so why do we think it will work for the United States?