The Inexorable Rise of Long-Term Unemployment
Long-term unemployment is the worst part of any jobless figures. We can deal with frictional unemployment (a temporary period during which people change jobs). Even short-term unemployment can be dealt with - through re-training, back-to-education, temporary employment measures. But long-term unemployment (LTU) represents a terrible drain on the households who experience it, on the economy that shoulders it. The literature is vast on the economic, social, physical, and psychological impact of LTU. And the longer someone remains on the dole, the harder it is to get back into the workforce.
Working with the CSO’s Live Register figures, however, is difficult. The Live Register is not the same as ‘unemployment’; for actual jobless figures one has to wait for the quarterly Household Survey reports. Another problem is the ‘leaky’ character of the Irish labour market; that is, the extra-ordinary high levels of emigration (and these figures only come out annually).
For instance, during the first two months of this year, 82,000 ‘signed on’ to both Jobseekers’ Benefit and Assistance, while 76,000 ‘signed off’. Of the latter, how many got jobs (and there are vacancies in the market), how many returned to education / training, how many emigrated, how many found their benefit used up but were refused Assistance (this happens when a partner/spouse is still in work)? We can only estimate.
We do know that Ireland has the second highest rate of unemployment in the EU-15: 13.5 percent, exceeding even poor Greece with only Spain recording a higher figure. But even this hides the true scale of the jobs crisis in Ireland. While employment (those actually in work) will fall by -1.2 percent in the EU-15 between 2007 and 2011, in Ireland it will fall by -14.1 percent. It is hard to grasp the magnitude of that comparison.
The CSO’s Quarterly Household Survey throws up another desultory statistic. While their measurement of unemployment showed 13.9 percent, when they combine the unemployed, the underemployed (part-time workers who want to work full-time), those in education who want to work, and those marginally attached to the labour force, the figure rises to a worrying 22.6 percent. More than one in five are being denied a meaningful opportunity to work.
The CSO’s Live Register figures released today show a fractional fall in seasonable unemployment. However, they show a continuing rise in LTU. Over the last 12 months the Live Register has increased by 7,300; LTU has, however, increased by over 56,000.
Over a third of the unemployed are long-term, compared to less than a quarter a year ago. For males, the situation is even worse. Over 41 percent are long-term unemployed while the rise in female LTU is just as stark. More and more are stagnating on the dole queues. This will wreak a terrible cost in the future - at a personal and social level. For any new government this would be a major challenge. Now throw in the fiscal crisis, the banking crisis, the growth (or lack of) crisis and we have a perfect storm.
The most desultory response to this crisis would be ‘well, unemployment lags growth and what we need to is get the fundamentals right.’ First, there is little growth for unemployment to lag. Secondly, even if employment generation returns to any significant level, those on LTU will likely see their skills redundant (e.g. construction) or have few skills to participate in the new job creation. Third, relying on dubious propositions such as ‘export-led job growth‘ or ‘restore competitiveness’ will have little if any impact on LTU.
What is needed is a more profound programme - one that understands that the normal operation of the supply / demand functions of the labour market have broken down for huge swathes of unemployed. This understanding should lead us to a substantial set of policy proposals that includes a significant role for the public realm and public intervention.
Otherwise, we should just be honest and say to those on long-term unemployment - tough, try your luck in some other country or just get used to it.
Which has been pretty much the response to date.
Discussion
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Comment by: Pope Epopt
Mar 3rd 2011 at 10:03
Sin é.
Comment by: Pope Epopt
Mar 3rd 2011 at 11:03
Add to that, the ’self-unemployed’ are not included in the figures.
Comment by: Mick Ahern
Mar 3rd 2011 at 11:03
Excellent if frightening piece for those of us at the margins.
Can we see the strutting Blueshirts rushing to provide a “substantial set of policy proposals that includes a significant role for the public realm and public intervention”.
To Fine Gael, public support for the lower middle class is all right. But the working and unemployed poor can swivel.
And meanwhile what will Labour do?
Keep up the good work, Michael. It is needed more now than ever!