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Archive for August 2nd, 2012

Unemployment is not a subject that is central to this blog, but each month the unemployment figures are monitored and it seems there is a demand for one blogpost to discuss the issues. This is it.

The Central Statistics Office publishes monthly statistics for unemployment, and yesterday it published the statistics for July 2012. There are an estimated 310,000 people unemployed in (the Republic of) Ireland today equating to 14.8% of the workforce. Every three months the CSO publishes more reliable estimates of unemployment in its so-called Quarterly National Household Survey. The last survey was published in June 2012 and related to the first three months of 2012 and showed 309,000 unemployed or an unemployment rate of 14.7%.

Unemployment versus the Live Register
There are different ways of measuring unemployment – remember people who have retired from the workforce, or otherwise aren’t available to work aren’t unemployed, nor are people in education and training. There are international standards for measuring unemployment and the 14.8% unemployment rate is the International Labour Organisation (ILO) measure. The 14.8% unemployment rate means there are approximately 310,000 people unemployed in the State. When you hear statistics from the UK, the US and most other countries, this is generally the number to which they are referring.

In Ireland, we also monitor total claimants for all unemployment-related benefits and this is what we call the Live Register. This is accurately monitored by the CSO based on the total of real claims at job centres around the country. Yesterday’s statistics showed that there are 460,323 on the Live Register. Because the number of claimants rises or falls during particular months every year, eg in July when universities are closed, the figures increase, in September when universities re-open they reduce, the CSO produce seasonally-adjusted Live Register statistics each month as well, and yesterday’s figures showed 437,600 on the Live Register on a seasonally adjusted basis.

Emigration and labour force participation
It is a matter of considerable shame that in a country historically scourged with forced emigration that we do not have any systems in place to monitor emigration.

Shame on you public administrators and the Central Statistics Office.

What we do have are quarterly surveys from the CSO which look at emigration trends in a sample of households, and every five years we have a census and because we accurately monitor births and deaths, net migration is a balancing figure in the census. But the latest census for 2011 showed that these quarterly surveys are woefully inadequate with Census 2011 showing the net inward migration for 2006-2011 was 231,269 whereas the quarterly surveys indicated it was 120,000 (five years of an average of 24,000).

A routine criticism of the unemployment statistics, particularly since the onset of the financial crisis in 2008 is that the figures are flattered by emigration, and were it not for forced emigration then we would have far more than 310,000 unemployed.

Anecdotally that criticism seems valid, in that we can see in our communities the disappearance of people we know or at least would recognise. GAA clubs complain that emigration of young men means they can’t field teams anymore, and our media has featured stories of emigration. But absent hard data from the CSO, it’s just anecdote.

Northern Ireland and the UK
The unemployment rate in the Republic of Ireland at the end of July 2012 was 14.8% equating to about 310,000 people. This rate compares with 6.9% in Northern Ireland and 8.1% in the UK overall.

The UK is our neighbouring jurisdiction and we share a great deal socially, culturally, economically and legally. Yes they have their own currency and a real central bank, and there are differences. But it is perfectly valid to compare unemployment rates in the two jurisdictions and if there are big differences, to ask why.

It is routinely pointed out that Northern Ireland is a special case because of the effect of state spending, particularly from Westminster and the fact that 31% of employment is in the public sector compared with 16% in the Republic. Though on the other hand, Northern Ireland shares the uniform UK corporate tax rate, so if Derry is competing with Letterkenny for Foreign Direct Investment and accompanying jobs, then Letterkenny with a 12.5% corporate tax rate has a head start on Derry with its 24% rate. It should be noted that the UK main corporate tax rate will drop to 23% in 2013, and there are ongoing talks of lowering the Northern Ireland rate to a level similar to the Republic’s but such a move would require Northern Ireland to reduce it dependence on Westminster funding under the EU Azores Principle.

Overall the UK is not in the healthiest of economic states with a deficit of 8%, more or less equal to our own. Their debt is about 80% of GDP whereas ours will shortly be 120%. Their economy is growing at a similarly anaemic level to our own.

So, with an unemployment rate of double our neighbouring jurisdiction, it seems valid to demand answers from leaders, particularly leaders who promised to place jobs at the centre of their attention.

Unemployment benefits
Firstly there is no suggestion here that the standard unemployment/job seekers assistance of €188 per week in this State is sufficient for anything other than the most basic of life’s needs, and sometimes not even those. In many jurisdictions, unemployment benefit is higher than ours following the loss of a job, though as far as I can see, our long term unemployment benefit is higher than most.

So, loaded words like “excessive”, “generous” or “Polish charity” don’t come into it.

But the fact remains that in our neighbouring jurisdiction, the UK, the standard weekly jobseekers allowance is GBP 56.25 (€70) for under 25s and GBP 71 (€90) for over 25s. Housing benefit is also payable in the UK, though in Ireland we have rent assistance payments. There are price differences between the two jurisdictions for consumer goods and services, and the UK is often cheaper. There are differences in the end-user cost of state services, with the UK often free for medical treatment for example.

Just as it is valid to challenge politicians on their policies and (in)actions, it is also valid to question if we can afford these levels of unemployment benefit and if so-called “activation measures” like training, mentoring with CVs, interviews, job clubs, starting businesses can help reduce the number of unemployed.

Is unemployment stabilising or reducing
The number of people unemployed stands at 310,000 today equating to 14.8%. This compares with 4.4% at the start of 2007, 14.1% in February 2011 at the time of the last General Election and at 14.8%, is today at its highest level since the crisis unfolded in 2008. At the start of 2005, unemployment stood at 95,800 people and was 300,000 at the start of 2011. So unemployment today of 310,000 and 14.8% is in fact still increasing by reference to the unemployment rate and the number unemployed.

The Live Register has stabilised and in fact declined slightly. The seasonally adjusted Live Register peaked in August 2010 at 449,400 and today stands at 437,300. For political fans, the seasonally adjusted Live Register has declined from 442,300 in February 2011 when we had the last General Election, to 437,300 today. However there are 7,629 extra people on training courses and community employment schemes today, compared with June 2011. Hard data on emigration is not available. So I think it is fair to say the Live Register is stabilising, though not appreciably reducing.

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