The Minister’s Problems with the Unemployed and Statistics

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1‘We all know there will be people who will never work. They’re allergic to work.  So we’re not including those in the statistics. But everybody who wants a job will have a job in the next couple of years.’

There were a lot of criticisms of the Finance Minister’s comments, rightly describing them as a slur on people who cannot find a job.  What I also find illuminating is the innovative approach to statistical representation.

Imagine saying ‘We all know people who are allergic to obeying the law.  So we’re not including those in the statistics.’ Or ‘We all know people who are allergic to paying taxes.  So we’re not including those in the statistics.’  See – we just eliminated crime and tax evasion.  There’s no end of progress we can make on the outstanding issues of the day if we just employ the ‘Noonan Manoeuvre.’

But there are some statistics that the Minister is not including as well – statistics that his own government gathers and sends on to the EU.  Like this one:

  • There are 20 unemployed for every job vacancy.

This comes from the Eurostat Vacancy Rate as reported by the Nevin Economic Research Institute.  We’re not as bad as Greece where there are 74.3 unemployed for every job vacancy but we have a long ways to before we reach Belgium (5) never mind Germany (2.1).

To put that 20:1 ratio in perspective, imagine someone dropping five €10 notes from the roof of a building on to 100 people in the street.  There’s a mad scramble and eventually five people walk away with the notes.  But 95 people don’t.  What do we say about those empty-handed 95?  They’re allergic to €10 notes?  The mind reels.

But the Minister’s capacity to not include statistics does not end there.  Take this one.

There are, according to the last Quarterly National Household Survey, 2.153 million people in the labour force.  There are 1.939 million in work.  When you subtract those at work from the labour force you come up with 213,000.  That’s the number of unemployed.  The number of unemployed doesn’t determine the number of jobs in the market.  There are still only so many jobs to go around for a larger number of people looking for them (there are niche exceptions where an employer has a vacancy but can’t find someone with the matching skills necessary – a phenomenon in the ICT sector and foreign language skills; maybe we should teach all the unemployed Dutch?).

Of course, there are ways to manipulate this equation which, also, rarely gets included.

Em1

Emigration is a great way to understate a significant negative statistical representation.  Prior to the crisis, there was an annual average emigration rate of 29,000.  Since the crisis, the average annual rate rose to 70,000.

Imagine if the emigration rate of the last seven years stayed at the pre-crisis level.  There would be 287,000 more people here; potentially all unemployed.  That would mean 500,000 unemployed, or an unemployment rate of over 20 percent.  Of course, some of them may have returned to education or dropped out of the labour force, having tired of chasing after the €10 notes.  But you get the point.  Emigration has massively cut the unemployment rate.

But what about the statistical physiognomy of this ‘allergy’?  Is there a strong allergic strain within the Irish workforce?  If so, we should be able to identify it by looking at the long-term unemployed for this is where the most allergic would be located.

LTU

Prior to the crisis, Irish long-term unemployment averaged 1.4 percent – less than half the EU-15 average.  But then it skyrocketed to over 9 percent by 2012 before falling off again (became employed?  Emigrated?  Dropped out of the labour force?  Returned to education?  Went on a labour scheme?  Your guess).

The question here is what happened between 2008 and 2012 to cause this exponential rise and continuing above EU-15 average?  Oh, yeah.  That little matter of a recession.  So let’s get this straight.

When there was work available, Ireland had one of the lowest long-term unemployment rates in the EU-15.  When there wasn’t work available, that rate increased dramatically.  Hmmm.  So the illness is not congenital to Irish workers but rather is directly and causatively linked to the availability of work.

But let’s step into the real world for a moment.  Every once in a while an employer comes on a current affairs programme and complains that they can’t get people to work for them.  They blame the ‘allergic’ unemployed, social protection payments, government regulation, whatever.

Now labour markets are regional and even local and there may be a mismatch of skills in some areas.  But there’s another issue.  Many employers – especially in the low-paid sectors – offer only zero/low hour contracts.  Someone is supposed to take up work without any guarantee of working hours or pay?  Rely on uncertain social protection supports for part-time work?  And given that many of these employers are demanding the minimum wage be cut or even abolished – well, you can see the problem.  Maybe the Finance Minister will eventually say that he knows people who are allergic to precarious incomes and uncertain pay.

The Minister’s defenders will say he was only speaking the truth.  Yes, there are some unemployed who are not motivated to return to work:  people with low market skills, literacy and numeracy deficits, and the inertia of chronic joblessness.   But the Minister wasn’t speaking to this.  He employed an age-old rhetorical device.  While I joked at the beginning – about taxpayers and drivers – these references wouldn’t have made any sense because these are majority categories.  The point of the Minister’s reference, like all such references, is to target a minority.  To get a sense of this let’s look at the comment again.

‘We all know there will be people who will never work. They’re allergic to work.’

Now substitute’ people’ with a religious minority or a national minority.  Get the effect?

That’s what the Minister was about – smearing a minority; in this case, the minority who are unemployed.  And then he goes on to say they won’t be included in the statistics; that is, they don’t count, they don’t matter.

That is all very disturbing.

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