Live Register Breaches 400,000 Mark

One Response to “Live Register Breaches 400,000 Mark”

1. # Comment by Veronica Jun 5th, 2009 17:06

   Cian,

   Great that you have raised this issue – there’s lots of talk about jobs, but precious little analysis of what we can actually do to stem the disastrous tide of rising unemployment.

   The register is significantly inflated by the very large increases in the numbers in short time working plus those on job seekers allowance and other categories of casual workers. The important figure is not the Live Register headcount of 400,000 +, irrespective of its dramatic appeal, but the underlying rate of unemployment, up 0.4% on the previous month. If that trend were to continue, then unemployment will reach about 16-17% by year end.

   Politically, it’s a huge headache for the Government. Not so much for the Opposition, since they can propose anything they like that carries the emotional appeal of ‘job creation’ without their proposals being subjected to too much scrutiny. Over on irisheconomy.ie, there’s been a very interesting analysis going on of some of the ‘job creation’ ideas put forward by FG and Labour – mainly about how they won’t work – which is worth a read. (Deadweight Loss and Job Creation Plans by Karl Whelan – 43 comments.)

   As in the early 1990s, it is, unfortunately, a basic fact of life that high rates of unemployment will only begin to disappear when the economy returns to sustainable growth levels. And even when it does, the pick up in employment is likely to lag behind by several months. Meanwhile, sticking plaster solutions in the shape of ill-considered government interventions to ‘protect’ jobs or ‘create employment’ through make-work schemes are likely to do more harm than good, particularly if they are generally applied throughout the economy and directed at the private sector in a non-discriminatory way rather than targeted at specific unemployment sectors, such as the under 25s or new labour market entrants, who should be the priority for any temporary labour market interventions for obvious reasons. In any case, the Government can’t afford to waste borrowed funds on 1980s type schemes that didn’t work then and definitely won’t work now, but that eat up scarce resources that might be better utilised elsewhere. For example, maintaining jobs that in the order of supply and demand for goods and services are no longer sustainable, by artificially subsidising them through exemptions in employers’ taxes or redirection of social welfare payments to employers, may keep the jobs alive for a while, but only until the subsidy runs out.

   Good ideas for sustainable job creation are as scarce as hen’s teeth. Even in relatively novel areas, like the so-called ‘green economy,’ or it’s father-in -law, the ‘smart economy’, even a cursory examination of the politicians’ promises of the creation of tens of thousands or even hundreds of thousands of jobs show that they are based more on hot air than anything more substantial.

   To get back on track, this government – any government – will have to do any number of unpalatable things. Actions that will accelerate restoring competitiveness to the Irish economy is a pre-requisite. Instead of job protection/creation schemes per se, might we be better off concentrating on things like energy costs, or (dare I say it) reducing the minimum wage, or investment in education opportunities/skills upgrading for certain sectors of the unemployed? All job related initiatives should be thoroughly scrutinised, including long term ‘green economy’ proposals and subjected to public debate. And after the kick in the teeth that FF are receiving today in the local and European election polls, hopefully there will be a major Cabinet reshuffle as well. We might all want a change of government, but if we’re going to be stuck with this lot for the next three years then the least we’re entitled to is Ministers who can do the job, not the bunch of jaded idiots that we currently have on board.

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