Normal Euro zone Countries Don’t Export Their People

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The Live Register has fallen below 400,000 – the first time since May 2009.  While the Live Register is not an official measurement, the Seasonally Adjusted Standardised Unemployment Rate shows unemployment at 11.9 percent.  Our unemployment rate is now down to the Euro zone average.  This led the Minister for Social Protection to state:

‘Minister for Social Protection Joan Burton said the figures were encouraging and signalled Ireland’s return to being a “normal euro zone country”’.

Yes, when it comes to a straight unemployment rate we may well be a ‘normal euro zone country’.  But there’s something that has been not so normal and which has impacted directly on the Irish unemployment rate.  Yes, I’m talking about emigration.

Let’s compare the increase in Irish emigration since 2008 with that of other EU-15 countries.   We’ll do this by taking the annual average number of emigrants between 2008 and 2011 (the last year Eurostat has data for) and comparing it with the annual average number of emigrants between 1998 and 2007.

E1

Spain has been particularly hard hit – with over 400,000 emigrating in 2011.  Ireland comes second followed by Portugal.  After these three countries, the next hardest hit by emigration was Italy.

Irish emigration has been more than five times the average of other EU-15 countries.  In terms of emigration, Ireland is hardly normal.

The number of unemployed has been falling.  The Government would have us believe that this is due to rising employment and the success of their ‘jobs’ policies (we will address the issue of the rising employment numbers next week).  Here, let’s look at what might be contributing to falling jobless numbers.

E2

This measures numbers between the 3rd quarter of 2011 (when unemployment in absolute numbers was at its highest) and the 4th quarter in 2013.  The numbers in unemployment fell by 75,000.  However, the number of working age people emigratingwas 116,000 while the numbers on labour activation schemes (training, education, etc.) increased by 29,000.

The total number emigrating or additional labour activation participants increased at nearly twice the level of the fall in unemployment.

There are some notes to this table:

  • Not all emigration can be put down to recession-related factors.  Even during the boom times, there was emigration.  So the number in the table above represents the level of emigration above the average annual emigration figures for 1995 – 2007 (the average during this period was an annual 26,000).  Also, the estimated emigration data only goes up to April; the above assumes a year-to-year flow.  The difference would be small.
  • Some of the increase in labour activation participants can be a positive – especially when it represents a return to education, retraining, or maintaining contact with the labour market.  Of course, some is not very positive:  Jobsbridge which is a subsidy to employers and Gateway which constitutes coerced labour.

Even if there was no additional recession-related recession or an increase in labour activation participants, this wouldn’t necessarily equal a corresponding rise in unemployment.  Some would be dependents, some would be ‘discouraged’ (i.e. leave the labour force), some might be in education.  However, it is reasonable to assume that unemployment would have increased substantially, even if we can’t put an exact figure on it.  In all probability, the number of unemployed would have remained broadly the same, if not rise.

No, Ireland is not a normal Eurozone country.  It’s just that Ireland has returned to form, exporting its excess labour.  If not for that, we would be exposed for what we are – a truly abnormal Euro zone country.

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