In the first of three articles, Caitriona Murphy explores a treasure trove of data from Amárach Research on how the Irish public coped during the recession.
Using data from Amárach Research we have analysed the pulse of the nation over the past seven years.
Amárach Research have tracked the mood of the Irish consumer since April 2009. Each month, 1,000 people were surveyed on saving, borrowing and their spending intentions, as well as their emotions during the the recession.
Our findings are based on what is called the Economic Recovery Index (ERI) as you can see in the graph below. The ERI is based on weighting responses to a single question: “Which of the following statements best describes the economic situation in Ireland right now?”
Each of the answers is then given a weighting from 0-4 (negative to positive feelings) and we took the results from each year to show the fluctuation of people’s feelings towards the economic situation over the seven years.
What we are interested in is the highs and lows, what caused these fluctuations and what has affected the people of Ireland the most over the past seven years. What is it that has made them tick or given them hope?
In this next graph we have broken down the ERI a little bit more.
As you can see above, the people who were surveyed had five possible answers that they could choose from ranging from extremely pessimistic, ‘Ireland is getting worse’, to extremely optimistic, ‘good and almost fully recovered’. Of course the ‘Ireland is getting worse’ line is the most prominent in 2009 and 2010 when the recession really began to affect people. But after that it is the ‘bad but has stabilised’ and ‘bad but showing a few signs of improvement’ that are most prominent and stable over the seven years.
We analysed this data further and looked at why there were these huge spikes and drops in optimism. We used the results to the question “Ireland will be through the worst of the recession in 12 months time” to gauge how optimistic people were during the economic downturn which is displayed in the graph below
Although Ireland was considered to be in a recession from 2008 onwards people really did not seem to feel the effects emotionally until 2010. And it is here that we see the bubble burst financially and emotionally as we see people’s optimism plummet. The housing market came crashing down and people’s pockets started feeling the effects of the emergency budget that was announced in 2009.
The Economic Recovery Index reaches the lowest point that it ever reached (since Amárach began tracking it) in 2010 when the IMF came to Ireland. Ireland was plunged into billions of euros of debt to save the banks, and with that all hope fades as you can see in the graph below.
The dip at the end of 2011 occurred after the announcement of the budget in December, and when the Central Statistics Office published figures that showed Ireland had fallen back into recession in the final quarter of 2011.
The next two slight drops in optimism occur right around the time the budgets were announced in December 2012 and October 2013 for the following years. But following this there was a significant change at the end of 2013 after it was announced that Ireland would exit the bailout programme. And finally at the end of 2013, Ireland became the first country to exit the eurozone bailout programme and optimism took the biggest boost since the recession began.
After this there are brief drops in optimism around the time each budget for the next year is announced but people of Ireland seem to recover quickly once Christmas comes around and the Economic Recovery Index has more or less leveled out as the Irish economy begins to improve.
When we look at who specifically felt the strain of the recession Amárach’s data shows that it was people between the ages of 35-55 and working class people, and of course those who are unemployed.
As we can see here when they were asked in the Amárach survey what they thought of the economic situation, it is the 35-44 year olds who were most pessimistic, closely followed by 45-54 year olds. So, those who may have young or teenage children, an unstable job or none at all, or those with Celtic Tiger-era mortgages who seem to have been the most pessimistic.
As with the level of optimism, when looking at age and emotion we can see here again that it is 35-54 year olds who seem to have suffered the most emotionally as shown in the graph below.
35-44 year olds appear to have been the most stressed over the past seven years as they possibly felt the economic strain the most. The added pressures of kids, a mortgage and an unstable jobs market is evident.
However even though stress, anxiety and worry are higher than pre-2009 in all of the age groups, enjoyment and happiness are still experienced more by everyone, which illustrates that regardless of the economic and political situation people have generally stayed happy despite it all.
The people at Amárach conclude from this data that it displays the resilience of the Irish people which we agree is evident after a turbulent economic decade. What we also think this shows is simply the concept that money doesn’t buy happiness and that people will always find time to enjoy themselves with family and friends. It’s not the first time Ireland has been in such turmoil and it won’t be the last and Irish people are also aware of that.
In the graph below we see the extent of the gap between how upper and lower social classes have felt throughout the recession.
Members of the working class and the unemployed have, it seems, been far less optimistic than middle class people with an average of 23 percent of middle class people who thought the situation was continually worsening over the seven years, and an average of 32 percent of working class and unemployed people who felt that the situation was worsening.
This gap of around ten percentage points can be seen throughout the years when you look at the Amárach data. And no different to the age gap, working class people and the unemployed felt the mental strain more, with their worry, stress and anxiety levels seemingly a lot higher than those of the upper and lower middle classes.
We also see stark contrasts in how people manage from month to month. Amárach asked each group how much they had left at the end of the month, before their next wage or salary payment, and we calculated the average amount that they had over the seven years.
When looking at age, the differences may not seem that significant but if you look at 35-45 year olds, they do seem to be suffering again. The fact that 35-44 year olds only have 20 euros more than the average 20 year old, and 10 euro more than someone in their late 50’s could well explain why their stress levels are the highest as we can assume that they have the added pressures mentioned before.
And the difference between the classes is again no surprise but would certainly help explain why there was that widening gap between them. The pessimism of the working class does seem to be explained by these numbers here as they had nearly 90 euros less than the middle class which demonstrates how much they were feeling the strain on a monthly basis.
As you can see below Amárach also asked people whether or not they would say they had less money left now than a few months ago and we calculated the average percentage over the years.
Once again we see that a slightly older demographic and members of the working class are feeling the strain economically. Again this is likely due to the pressures of childminding, increased college fees for their children, high mortgage rates, decreases in their salary and perhaps dramatic cuts in their pensions.
And once again the wide gap between the classes is reflected here as far more members of the working class felt that they continually had less money than a few months before. This may explain why older people and the working class were more stressed because they were feeling the effects of the recession on a monthly basis and constantly felt the strain.
And it is this constant strain that has led to the Irish people’s discontent with the situation in Ireland and discontent with the government, which has led to various protests and demonstrations over the years, which we will outline in Part 2 of Feeling the Pulse of the Nation which will be available on TheCity.ie tomorrow.