Conference highlights Ireland’s Unemployment Crisis

Posted on November 13, 2012 by Micheál Collins

On November 12th the NERI hosted a conference focused on Ireland's unemployment crisis. Over a series of papers the nature of the current crisis and the possible solutions to the problem were examined. The papers and presentations for the conference are now available on the NERI website.

In my own paper, the following were the key points:

Overall Summary

  • The dominance of policy responses to Ireland's banking, economic, fiscal and reputational crisis has resulted in limited focus to date on the nature, scale and long-term implications of Ireland's unemployment crisis.
  • The unemployment crisis is likely to be with us for a long-time, at least to the end of this decade.
  • Projections suggest there will still be in well in excess of 200,000 unemployed by 2017 - more than double the number and rate of unemployed in 2008 or 2009.
  • Government needs to be more proactive in addressing this crisis.
  • Policy should be focused on assisting those furthest from the labour market, in particular the long-term unemployed.
  • Community Employment schemes should be restructured and supported as a key part of this response.

On Employment and Unemployment

  • There has been a 21% drop in full-time employment (-359,000) and a 15% increase in part-time employment (+56,500) since the beginning of 2007.
  • The ratio of full-time workers to part-time workers has shifted from 80%:20% at the start of 2007 to 75%:25% in 2012.
  • There are now 135,200 people who are underemployed - that is working part-time but doing so with less hours than they would wish to work.
  • Of the 309,000 who are unemployed, over 60% are long-term unemployed.
  • The skill and education profile of the long-term unemployed suggests a significant role for active labour market policies targeted at this group if they are to avoid remaining unemployed or cycling through unemployment, labour market schemes, occasional employment and unemployment in the years to come.
  • Projections suggest that there will be in excess of 200,000 people unemployed by 2017.

On Jobless growth

  • When economic growth returns some of the first beneficiaries of additional labour demand will be those already at work and seeking additional hours (both full-time hours and part-time hours).
  • The scale of underemployment will have an inevitable impact on slackening the transfer of renewed economic growth to job creation.
  • This suggests any employment recovery will lag economic recovery by a noticeable period.
  • Going from jobless stagnation to jobless growth is a real possibility with echos of the experience of the early 1990s.

On Community Employment Schemes

  • Government should refocus Community Employment, its largest active labour market policy and the one most focused on the long-term unemployed.
  • Community Employment should retain its dual role, of helping the long-term unemployed return to the active labour market and the provision of local services, but should be formally structured across two streams.
  • The first focused on specific skill (re)training for the long-term unemployed and the second on the provision of local services.
  • Overall Community Employment places should be retained at its current level, re-focussed and complemented by additional training measures in other schemes.
  • Government should more formally support Community Employment providers with some assistance on their overhead and administration costs.
  • Government should adopt a more comprehensive evaluation process for Community Employment which recognised the dual nature of this programme and its focus on those most distant from the active labour market.

The paper, entitled 'Responding to the Unemployment Crisis: what role for active labour market policies' is available with the rest of the conference papers and presentations here.

Posted in: Government SpendingIncomeInvestmentJobsMacroeconomics

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