Irish dole claims end 2015 at 410,000, Broad jobless rate at 19%

The number of Irish unemployment benefit claims at the end of 2015 amounted to 410,000 comprising 329,000 on the Live Register and 81,000 in publicly funded activation schemes, according to CSO data published Thursday. The broad jobless rate based on a workforce size of 2.186m last September, gives a rate of 19%.

Net emigration by Irish nationals in the period May 2009 - April 2015 amounted to 147,000.

The narrow or headline rate based on the International Labour Organisation (ILO) definition of employment being at least 1 hour of paid work per week, was 8.8% in December and the official level of unemployment fell 29,000 in 2015.

Jobs in the economy at September 2015 were 165,000 below the level in March 2008. We have estimated that about 30,000 of this shortfall are jobs in the exporting sectors (tradeable goods + services, tourism and transport) of the economy.

The reason why the Government cannot credibly say that full-employment will be restored during the 2016-2021 period of the 32nd Dáil, is that Department of Finance economists will not forecast a jobless rate of 4.5% by 2021. The Oct 2015 Budget 2016 forecast is a rate of 6.4% in 2020 and 6.2% in 2021 (see below).

The challenge for the economy is that despite the focus of ministers and economists on tradeable exports from foreign and Irish-owned firms, this sector ceased being a significant jobs engine 15 years ago.

From end 2000 to 2015, the workforce grew by 404,000 but jobs in exporting firms according to surveys of enterprise agency client firms grew by 28,000 in the 15 year period.

However, the data from the surveys are at variance with Central Statistics Office data.

After statements this week from Enterprise Ireland and IDA Ireland on performances in 2015, Fine Gael is economical with the truth when it claims the creation of 60,000 export jobs in 4 years — never mind the questionable data, have there been any job losses? According to CSO data, jobs in Industry and Information + Communications (Apple, Microsoft, Google etc.) expanded by 17,000 from end 2011 to Sept 2015 while there has been a growth of about 3,000 in financial services jobs — the total jobs added was at 129,000.

Europe's export stars: Ireland and UK as laggards Part 2

Can Ireland reduce its reliance on FDI by boosting Irish firms?

Broad rate of unemployment

The US Bureau of Labor Statistics publishes two rates of unemployment. The broad rate includes the standard headline rate plus part time workers seeking full-time work and others in the workforce but not available for work e.g. people claiming benefits other than under disability schemes.

In Ireland the 81,000 in publicly funded activation schemes should not be excluded from data on unemployment while casual workers on the Live Register are by definition unemployed for periods during a year. There are about 100,000 part-time workers seeking full-time work.

Full employment

We explained here last week how Enda Kenny's Department used bogus data in Jan 2015 to bring forward a full-employment target to 2018 and in recent days, quietly restored 2020 as the target date — but 6.4% as forecast would not reflect full employment:

Kenny's full-employment flip-flop fools Irish media again

In Ireland in December 2007, there were 104,000 officially unemployed; 170,000 on the Live Register and 52,000 in activation schemes — a 4.6% narrow jobless rate (based on International Labour Organisation definition) and a broad rate of 10%.

Eurostat reported Thursday that in the EU the lowest unemployment rates in November 2015 were recorded in Germany (4.5%), the Czech Republic (4.6%), Malta (5.1%) and the United Kingdom (5.2%), and the highest in Greece (24.6% in September 2015) and Spain (21.4%).

EU headline unemployment rates Nov 2015

Last September the OECD in its survey of Ireland highlighted that with the exception of graduates, the employment skills of the Irish workforce are low:

The OECD Survey of Adult Skills (PIAAC) signals that despite improvements in recent years, Irish adults’ skill level is significantly below the OECD average , and in the bottom quintile, both in numeracy and literacy skills. This relatively poor performance is partly explained by those aged 45 to 65, who on average have relatively low levels of educational attainment. However, according to PIAAC, younger people in Ireland also compared unfavourably with their peers in other OECD countries (Figure 1.9). The percentage of younger adults scoring at higher proficiency levels is low in Ireland in international comparison.

The activity rates of the low-skilled are particularly low in Ireland. Only 50% of the individuals in the 20-30 age group are employed or are seeking work, 20 percentage points lower than in other advanced economies in the European Union. Ireland has a markedly higher percentage of younger cohorts (25-34 years old) with tertiary qualifications than both OECD and EU averages. However, there remains a large cohort of unemployed with insufficient skills. Raising skill levels is especially important for reducing inequality at market incomes given the mentioned evidence that the reward for education and the penalty for a lack of skills are very high. These high skill premiums and penalties result from the wide gap between the skills of the workforce and the needs of employers (Figure 1.8): employers are willing to pay a premium for hard-to-find talents, but are unwilling to do so for the many with low skills.

Enda Kenny wants skilled Irish emigrants to return home. He says nothing about the skills deficit at home.

Do we really have one the best education systems in the world?

The Irish apprenticeship system is both outdated, geared towards males, and has the lowest participation in Western Europe. The business sector does not wish to pay for a modern system that keeps youth employment low in Germany, Austria, Denmark and Switzerland.

A report published this week based on 2014 data says Ireland is not an easy place to get a job.

Using key indicators including jobless rates and the numbers in temporary or part-time roles, Ireland is ranked 12th out of 16 countries, making it one of the most difficult job markets in Europe.

Pic on top: Enda Kenny, taoiseach (2nd from left), and Simon Harris, flooding minister (right of group), back after the holidays and the flooding, attend a meeting of the National Coordination group on response to flooding, Monday 4 Jan, 2016.

Irish environmental vandalism and Bandon flooding

Irish standard of living below EU28, Euro Area and Italian averages