The €2 Billion Start

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Today, Unite has published its 2016 pre-budget submission.  You can read the full submission here and the summary here.  In short, it calls for a €4.8 billion budget package comprising a €1.9 billion increase in expenditure on public services and social protection, a €550 million increase in public investment and focused tax reductions on the low paid (e.g. reform of the PRSI step-effect, refundable tax credits and indexation) worth €220 million.  This is to be paid for by tax increases on wealth and capital, along with increases in the social wage (employers’ PRSI) and the fiscal space allowed under the EU fiscal rules.

However, I want to focus on one particular proposal in the submission:  the temporary, once-off investment programme of €2 billion for social housing; in particular, focusing on the homeless and households with special needs.

This has been discussed previously on this blog.  Back in April 2014 I suggested that instead of the Government spending €7.1 billion on paying down debt, it should invest half of this into a special once-off investment programme in social housing.  The actual turnout for 2014 was €5 billion used to pay down debt.  At that time I wrote:

‘Let’s start with the conclusion: if by this time next year if there are people still homeless, it’s because the Government made a policy choice.  And the policy choice was to tolerate homelessness.’

Back in May 2014 Fr. Peter McVerry warned of a ‘tsunami of homelessness’:

‘In all the years I have been working with homeless people; it has never been so bad. We are, even I would say, beyond crisis at this stage.’

16 months later the situation has become worse. 

A comprehensive housing programme, one that addresses the myriad of issues such as homelessness, local authority waiting lists, rising rents and limited supply, house prices, planning, land prices – this is a big, big subject and is not amenable to sound-bite policies.  It will require joined-up strategies, long-term thinking and the intellectual courage to go beyond the ‘housing as just another market good’ thinking that dominates policy-making.

However, with winter coming on and more people becoming homeless, sleeping rough and / or living in wholly inadequate accommodation, we need short-term stop-gap remedies.  That’s the thinking behind Unite’s proposal for a €2 billion once-off investment programme – to address this immediate crisis. 

There are any number of options open to the Government in using this €2 billion:  fast-tracking refurbishment, acquisitions of short-term tenancies, conversion of idle buildings, extensions of current emergency accommodation, etc.  The key is that accommodation can be brought on stream quickly and efficiently.  One hopes that it is not too late.

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No Country for Young People

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So you’re young, ready to take up work, make a bit of money and, most of all, make the social contribution that is expected of all members of the homo economicus species.  There’s only one problem.  You live in Ireland.

Following on from my previous blog on the weakness of our market economy to produce jobs – except in the construction sector – let’s look at employment growth by age.  Overall employment is rising, even if it is patchy.  But not for young people.   For young people, the jobs recession continues apace.


Employment grew by 2.2 percent overall.  But for young people – between 20 and 34 years – it fell by 1.5 percent.  Among older groups – over 50s – employment grew by 5 percent.

When we drill down further, we find that those aged between 30 and 34 years saw employment fell by 3.1 percent.

This is part of a longer trend.employment_growth2jpg

Since the crisis began, employment has fallen by 10 percent.  However, for those aged 20-34, employment fell by a third.  For other age groups, employment has recovered and increased – with employment among 50s and over increasing by 14 percent.

There has been some discussion about bringing Irish people back from abroad.  It has been suggested that a main obstacle is our ‘high’ tax regime (sigh).  As we see above, the problem remains what it has been some time ago – lack of jobs (though there will be some sectors that are undergoing growth).

Young people face more problems than just falling employment.  Since 2008, nearly 475,000 people have emigrated.  Unsurprisingly, the majority who left were young people.  Over 300,000 men and women aged between 20 and 34 years have left the country – or 65 percent of all those emigrating.


For those who stayed behind it’s still tough out there in the labour market.  The unemployment rate for those aged between 20 and 24 years the unemployment rate is 19.6 percent – twice the national average.  No wonder Eurostat estimates that 40 percent of young people are at risk of poverty or social exclusion (for the age group 18 – 24 years).

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Ireland’s Lean Mean Job Creating Machine is Looking a Bit Flabby

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You’d think, listening to Ministers reeling off employment numbers and media reports of new job announcements, that Ireland was some lean, mean job creation machine. Well, in comparison with other EU-15 countries we are neither mean nor lean. Indeed, we fall well behind in key sectors.

Let’s leave aside the arguments over the 2013 employment numbers.  I suggested that they were inflated due to a statistical re-alignment between the Quarter National Household Survey and the Census (you can read those arguments here andhere).  If people want to believe that job growth in 2013 (when domestic demand fell) was higher than in 2014 (when domestic demand rose by nearly 4 percent) – well, sure, go ahead.  I prefer to take on board the CSO’s warning about interpreting job creation trends in 2013.

Robust comparisons can only start with the last quarter of 2013.  That’s when the CSO finished its statistical re-alignment.  Therefore, we have two year-on-year periods to compare.  We should be cautious interpreting this data; it would be preferable to have a longer time-series.  Therefore, any conclusions are tentative and subject to revision.

The following looks at the market, or business, economy.  This is essentially the private sector, excluding the public sector dominated sectors (public administration, education and health) and the farming sector.  Here are the year-on-year figures for 2014 to 2015 Quarter 1.


This doesn’t look so bad.  Ireland’s employment growth is above the EU-15 average and ranks 4th in the table.  However, something interesting happens when we exclude the construction sector which is non-traded and which in the past the Irish economy overly-relied on for job creation.


Ireland falls well down the job creation table when construction is excluded  – below the EU-15 average.

In the last year, the Irish market economy generated 29,700 jobs.  Of this, 19,500 jobs were in the construction sector – or 66 percent.

When we look at the previous quarter – the 4th quarter of 2014 – we find a similar pattern.

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The Minister’s Problems with the Unemployed and Statistics

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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.

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Returning to the Business of Bonuses

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When everything came crashing down there was considerable discussion of the ‘bonus culture’; primarily but not exclusively in the finance sector.  Bonuses were tied to outputs that, while rewarding the individual (usually a senior management figure), played mayhem in the economy –as if the dispensing of loans for property speculation is a measure of commercial success.

Bonuses, in general, have been with us for a long time.  It actually started among workers and was paid out as ‘piece-meal’ work – the more you shovelled, the more you harvested, the higher the pay This benefited only a few, especially as the total pot of remuneration rarely grew – it was just redistributed (but it did get workers to produce more for their employers).  But as economies industrialised, bonuses became a phenomenon of management and those with special skills; and as the financial sector was deregulated, bonuses became associated with bankers – senior bankers.

Bonuses are justified on the basis of ‘rewarding performance’ or ‘attracting the talented’.  That’s the justification – a hypothesis rarely tested.  It can reward some aspects of work but it ignores others; they can attract some talent but demotivates other talent.  Employees rely on the fixed income of their wage – either the direct or social wage; bonuses can have a distorting effect and can leave employees reliant on HR whim no matter how dressed up it might be with metrics that aspire to measure productivity.

Whatever the justification, there is one thing we can be sure of:  bonuses benefit higher income employees; namely, managers and professionals.  Very little trickles down to workers on the shop and office floor, production line or building site.   The CSO used to measure bonuses by type of employee – not so anymore.  But we can reasonably assume that the share-out is much the same today.

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We Are All Dunnes Stores Workers

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This Thursday, April 2nd, workers in Dunnes Stores throughout the country are coming out on a one-day strike.  In essence, the dispute boils down to two urgent issues.

The first is zero/low hour contracts.  Such contracts require employees to be available for work but do not guarantee hours of work.  Therefore, workers cannot be assured of their income from one week to the next.  And because hours and shifts change, workers cannot plan childcare, eldercare, family time or leisure.

The Dunnes Stores Workers are seeking what is called ‘banded hours’.  This means people are rostered in such a manner that they are guaranteed a minimum and maximum number of working hours and, so, income.

While Dunnes Stores management might claim (if they ever went public to defend their position) they require roster flexibility, banded hours are widespread throughout the industry (e.g. Tesco, Marks & Spencer, Arnotts, Pennys, to name a few).  This is from Jennifer who has worked for eight years with Tesco:

‘Unlike my Dunnes colleagues, I am much more fortunate in that I have the stability and security of a banded contract. This allows me the guarantee of 30-35 hours every week but also, it does not restrict me to 35 hours. In the event that extra hours become available, I am able to work up to and including 39 hours weekly.’

The fact is that flexibility is a diversion.  Management uses the roster as an instrument of control, punishment and reward to create a compliant and submissive workforce.  If you try to organise a union in the workplace or make a health and safety complaint – don’t expect too many hours next week.

It is also an instrument of payroll cleansing.  This from a Dunne Stores worker:

‘I tell them I can’t work between 2pm and 5pm because of child care issues . . . but they keep putting me on the 2-6pm shift.  They are trying to push me out after 9 years because I’m on an old contract with higher wages.  They want to replace me with cheaper staff on new contracts.’

No wonder that in a survey of Dunnes Stores workers, 85 percent stated that insecurity of hours is used as a method of control.

It is, however, the second issue that cuts to the heart of the matter.  Quite simply, Dunnes Stores management treat their employees as nothing more than a factor of production.  What the Dunnes Stores workers are seeking is terribly simple and far-reaching:

‘You will acknowledge us.’

You will acknowledge us when we want to discuss our contracts, our pay, our working conditions.  We are not mere instruments in the value-added creating process.

Again, management will divert the issue by claiming it is about a union demanding recognition.  It is not.  It is not about Mandate or any trade union.  It is about what the workers want.  Do you or don’t you want to be a member of a union?  Do you or don’t you want to negotiate with your employer collectively?  Do you or don’t you want to appoint a trade union as your negotiating agent?  Do you or don’t you want to take industrial action?  It all starts, proceeds apace and ends with the individual worker and what she or he wants.

The Dunnes Stores workers have made their decision.  They have joined a trade union, sought to negotiate with management, were ignored, and have voted by an overwhelming majority to take this
one-day action.  Now they are paying a considerable price. Management is putting pressure on workers with threats of redundancies and layoffs (in a letter that wasn’t even signed) and especially key activists and workplace representatives whose working hours and income is under threat.

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Not a Vintage Year

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This is a post by Michael Burke originally posted on Notes on the FrontMichael works as an economic consultant. He was previously senior international economist with Citibank in London. He blogs regularly at Socialist Economic Bulletin.  You can follow Michael at @menburke

The publication of the ESRI’s latest Quarterly Economic Commentary follows the recent publication of the national accounts for 2014. But they were both strangely muted affairs given that the headlines were GDP growth of 4.8% in 2014 and GNP growth of 5.2%. The ESRI is forecasting 4.4% and 4.1% respectively for 2015- although it does not have a very good forecasting track record.

Not only are these the strongest actual and projected growth rates since the recession began but they are also the strongest growth rates in both the EU and in the OECD. So why the long face? Why are people still taking to the streets to protest water charges and the government parties getting no bounce in the opinion polls?

One factor is that despite all the talk of recovery, even on the distorted GDP measure of activity the patient is still convalescing. The economy has not returned to its pre-recession peak, as shown in Chart 1 below. GDP contracted by 12% from the end of 2007 to the end of 2009. In the 5 following years about 70% of that shortfall has been recovered.  On that trend it will be 2016 before the economy is finally in recovery.

Chart 1. Real GDP


On most indicators including GDP the level of activity is now back to around the level last seen in 2010, which was hardly a vintage year. Following a deep recession, industrialised economies much more usually bounce back equally sharply. But this is a slow, painful and incomplete recovery from a deep recession.

Stagnation apart from exports

There is another factor in the subdued mood. GDP is a measure of activity. But it is not designed to be a measure of prosperity. It is widely accepted that recorded export activity is hugely distorted by the activities of multinational company operations in Ireland. Yet since the economy stopped contracting at the end of 2009 these highly distorted net exports (exports after imports are deducted) have risen by an annualised €16bn, almost exactly equal to the rise in GDP.  Net exports, many of them purely fictitious, account for the entirety of the partial recovery.

Chart 2 below shows that the key components of domestic activity are either still falling or are stagnating after a sharp fall. Personal consumption is over €7bn below its peak on an annualised basis and is stagnating. Government spending is €5.6bn below its peak and continues to contract. Popular anger is actually inclined to grow the more there is talk of ‘recovery’.

But the most dramatic contraction is in fixed investment which is now €23.6bn below its peak at the beginning of 2007. The decline in investment led the recession and continues to act as the main brake on recovery. The fall in investment now far outstrips the total decline in GDP since the recession began.

Chart 2 Personal Consumption, Government Consumption and Investment


There might be grounds for increased optimism if the ESRI were plausibly making the case for higher consumption, government spendign and investment. But that is not the case. Private consumption and government consumption are projectedf to rise by just 2% and 0.5% respectively in 2015. Investment is forecast to rise by 12.5% following a double-digit increase in 2014. Even if the ESRI’s optimism is borne out, the fall in investment is now 60% from its peak. So it would take another 4 years of growth at that pace to begin a full recovery.

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Trailing Behind Europe in Employment Growth

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Here’s a quick post:  Had an interesting and informative twitter exchange with Tom Healy, Director of the Nevin Economic Research Institute and Dan O’Brien from the Sunday Independent on foot of the CSO’s release of new job numbers.

Jobs growth in the third quarter was 10,400 seasonally adjusted.  For the same period last year it was nearly 18,000 but we know there are serious flaws in 2013 employment figures given the CSO’s warnings about the impact of their revision of their sampling base.

So, 10,000 jobs growth; for the year it is 15,400.  This is better than a loss and going in the right direction.  But is it going fast enough?  It it well balanced across all sectors?  Is the glass half-full or half-empty.

What was interesting in the twitter exchange was how we compared to EU jobs growth.   The fact is that our jobs growth this year fares poorly with the rest of the EU. The data we have goes up to the 2nd quarter of this year.

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Dismal Job Numbers Expose Government Spin

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Question: why has employment growth collapsed in the first half of the year after recent claims by the Government that 60,000 jobs per year were being created?

The answer lies in statistical misunderstanding, Government spin and the failure of many commentators to read the numbers correctly. For the fact is that the 60,000 job-creation number was never real and the recovery in the labour market is sluggish at best. This post may get a bit involved but stay with me – for this is as much a story about how the recovery is being contrived as it is about bald numbers.

Last year, employment growth suddenly took off. In 2012 employment actually fell by 11,000 – and this was after a loss of nearly 300,000 since the start of the crisis. However, in 2013 everything changed. Employment grew on a full-year basis by 43,000 (this is consistent with claims by the Government who were using quarter-to-quarter figures).

This was quite a turnaround. The Government claimed their policies were working. For many commentators this was proof that recovery had returned. But there were a couple of problems.

  • First, this employment growth took place while the economy remained in a domestic demand recession. Given that employment is sensitive to domestic demand, this didn’t make sense.
  • Second, the usual pattern of an economy coming out of a recession is that employment growth lags. This is because if there increases in business output, the first beneficiaries are those already in employment; they get an increase in hours which had previously been cut.
  • Third, the actual job numbers were throwing up some strange happenings. Self-employment (own-account workers) grew by over 10 percent and made up over half of the total employment growth. At one stage, self-employment was growing by nearly four times the rate of growth during the boom. This didn’t make sense – not with domestic demand stagnation. Agriculture employment showed a similar pattern.

These concerns were dismissed. Government policies were working and critics were just nit-picking. However, the CSO published warnings throughout all last year – warning people against interpreting growth trends. Why? Because they were re-aligning their sample base with the recent Census (don’t forget, the Quarterly National Household Survey is not a comprehensive head-count, just a sample; like a poll). This happens after every Census.

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What 5 Cents on a Big Mac Would Mean for Hospitality Workers

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Yesterday was International Fast Food Day.  It started in the US where workers in the fast-food industry are staging protests nationwide, seeking a $15 per hour wage (the Federal minimum wage is $7.25 but President Obama is seeking an increase to $10.10 per hour while states and local governments have a higher minimum levels).

The protest has spread internationally and is expected to take place in 80 cities in more than 30 countries, from Dublin to Venice to Casablanca to Seoul to Panama City.

Fast-food workers are some of the lowest paid workers in the Irish economy with poor working conditions.  Average weekly earnings in the Accommodation and Food sector (we don’t have official data for the fast-food sector) were a mere €321 per week in the final quarter of last year.

Unite, using EU data, showed that our hospitality workers are some of the worst paid in the advanced European economies (see Table on Page 18 here).

Their conditions have deteriorated since the start of the recession.  Average weekly earnings in the whole economy fell by 4.6 percent since 2008; in the Accommodation and Food sector, they fell by 7.7 percent.  The low-paid are even more so.

With the minimum wage frozen since 2007, the revamped Joint Labour Committees having less powers than previous (e.g. they can’t negotiate Sunday premiums) and the cost of living, especially rents, rising, hospitality workers are under increasing pressure.

It is often said that since the hospitality sector is so labour-intense, wage increases would have a major impact on costs but this is over-stated.  It is true that wages (and for the purposes of this post I will use Accommodation and Food sector data unless stated otherwise) make up a high proportion of turnover.  They make up approximately a third of total turnover which is high.

However, a wage increase for the lowest paid in this sector would have only a minimal impact on prices but would have a major benefit to the workers, to businesses reliant upon their spending, the economy as a whole and the Exchequer.  Let’s do out some numbers – and this is a very approximate estimation based on one sector.

The CSO data suggests that if every hospitality employee (and this would include managers and professionals in the sector) were to receive a €1 per hour pay increase, it would cost the sector €160 million in personnel costs.  Sounds like a lot but it makes up only 2 percent of turnover.

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Another Crisis? Blame the Workers!


We have a housing crisis.  90,000 on the social housing waiting list of which 60 percent have been waiting for two years or longer.  The private rental sector is not fit for purpose for many household types (and, in any event, is a highly fragmented, mom-and-pop operation).  There are over 100,000 in arrears and that doesn’t count buy-to-let mortgages.  The planning system is unreformed and we are stuck with inefficient and costly suburban sprawl.  And there is a major supply problem in the main urban areas, especially Dublin, where rents are experiencing double-digit inflation.

So what’s the answer?  Blame the workers, of course.

Prime Time had a feature on the housing crisis followed by a panel discussion.  And what comes up?  The alleged high cost of labour in the construction sector.  There were two parts of these assertions.

Hubert Fitzpatrick of the CIF claimed:

House prices today are approximately 50 percent of where they were seven years ago but the cost of actually building those houses has not fallen by the same extent.  

Economist Ronan Lyons stated:

The Government needs to be very forensic in saying if we have labour costs in construction that are 25 percent higher than in West Germany, why?  Is there a reason for that?  Can we get our labour costs in line with Eurozone partners? 

We have had a spectacular roller-coaster ride in the property market, fuelled by speculation, non-regulation, massive capital inflows and, then, outflows – and we come back to ‘wages are too high’.  You really would weep.

How valid are these assertions?  Not very when you look up some basic facts.

First, it is true that property prices have fallen substantially.  It is also true that building costs haven’t fallen by the same extent.  But during the boom period house prices rose at an exponential rate compared to building costs.


Between 1994 and 2007, new house prices more than quadrupled.  Construction costs didn’t even double.  If house prices were to fall back in line with the cost of building a house, they’d have to fall even further, by more than a third.   If there are problems in investment returns or margins, it’s not coming from the cost of building a house – of which wages are a significant component.

What about the claim that construction labour costs are 25 percent higher than West Germany?  Here is the latest data from the European Labour Force Survey which measures labour costs per hour.

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The Case of the Elusive Paid Job

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I’ve heard a great deal recently about economic recovery and job creation. Ireland’s unemployed should be optimistic, and if we’re not, well, who’d want to hire us with that attitude? All we need to do is ride it out, keep a positive outlook and before we know it we’ll all be upstanding citizens again, able to pay our bills without the weekly humiliation of social welfare. I’d like to believe that, but I don’t see any evidence of it: all I see in the jobs pages are some high-tech, highly specific positions in large multinational companies, jobs that require qualifications and languages that very few Irish people possess, and an enormous, unshakable, mass of Job Bridge Internships.

Yesterday I looked up one of the main recruitment sites and put “Cork” and “admin/PA/secretarial” into the search engine. I got five results for paid jobs (not Jobs Bridge), four of which were: “Finnish Customer Service Associate”, “Polish Accounts Assistant”, “Logistics Administrator with Turkish or Hebrew” and “German SAP Rep”. The outlook is similar whenever I search for vacancies. I’m under no illusion, I fully understand the requirements of EU free movement of workers, and I don’t deny the right of any person to take up work in another EU member state, but I cannot see how these jobs are going to filter through to the vast majority of unemployed people.

The system implies it’s our own fault; Irish people didn’t learn the right skills, we should have been able to predict the future. We’re told that we’re living in a globalised world now, and it’s up to us to stay “relevant” to ever-evolving labour market requirements, requirements that now, seemingly, we are surplus to. We are in over-supply: cheap, expendable and easily substitutable.

The Irish unemployed, it has transpired, must be happy to do Job Bridge Internships. After all, we are the great unemployable, why wouldn’t we be satisfied to work a full week for our dole? We deserve it for not learning obscure languages or qualifying in high-tech areas that didn’t exist five years ago. Every second job advertised, that doesn’t require unreachable and prohibitive levels of experience – from cleaner and meat-counter assistant to teacher, solicitor and scientist – is a Job Bridge Internship.

When I was in university it was common for students to work in retail or as waiters or waitresses part-time to fund their studies. Now almost every low-paid casual job is a Job-Bridge that requires the lucky participants to be on the Live Register for three months, so I can’t see how students could possibly hope to work. It’s not just students: so many people I know in their late twenties and early thirties, people with post-graduate qualifications and years of work experience, have not only done Job Bridges but have had to compete with other similarly qualified people to get them. When I hear of a friend getting an actual, paid job, it’s like a miracle, and even then it usually comes down to personal contacts.

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In Ireland, the Jobs River Flows Uphill

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There’s a lot of confusion out there.  IBEC found the recent fall in consumer spending ‘puzzling ‘ – what with all the increase in employment.  Others have found it strange, too – strong employment growth but falling consumer demand.  Shouldn’t the big increase in employment translate into higher consumer spending and domestic demand?  What’s going on here?

Well, it’s only puzzling if you accept that employment grew by 60,000 over the last year.  However, once you lift the lid on the numbers and find that the 60,000-growth number in the CSO’s Quarterly National Household Survey (QNHS) is a statistical quirk, then it starts to make sense.

First, let’s note the CSO’s warning about interpreting trends in employment growth during the period they are realigning their sampling base with the 2011 census.  This realignment ensures that their Quarterly National Household survey sample is aligned with the population.  They do this after each census.

‘After each Census of Population the sample of households for the QNHS is updated to ensure the sample remains representative. The new sample based on the 2011 Census of Population has been introduced incrementally from Q4 2012 to Q4 2013. This change in sample can lead to some level of variability in estimates, particularly at more detailed levels and some caution is warranted in the interpretation of trends over the period of its introduction.’

Now let’s look at the employment numbers.  Between the 4th quarter in 2012 and 2013, employment grew by 60,900 – or 3.3 percent (not seasonally adjusted).  However, self-employment grew by 33,400, or 11.5 percent.  So, self-employment made up 55 percent of all employment growth.  Is this realistic?  No.

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From Youth Guarantee to Mandatory Labour

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The Youth Guarantee programme is potentially a positive development.  To prevent long-term youth unemployment, the Government launched a programme that would guarantee young people either a place in education, training or a job.

However, a couple of developments put in question the operation and effect of this guarantee – and both revolve around our old friend, JobBridge.  First, as part of the Youth Guarantee Implementation Plan, JobBridge will now become mandatory:

In the case of young people, failures to engage that will give rise to sanctions will include:

  • Failure to apply for or accept an opportunity on the national internship scheme (JobBridge)

This suggests two things:  first, young unemployment must now pro-actively apply for JobBridge – something that wasn’t required before.  Second, it seems the Department will pro-actively create new JobBridge opportunities (that is, contacting employers to participate in the scheme) and then offering them to young unemployed; previously, JobBridge opportunities were generated by businesses alone.  This indicates a substantial increase in the scheme.

And the sanctions will be pretty harsh.  Young people could see their Jobseeker payment cut by up to 25 percent.

The second development is the news that one company – Advance Pitstop – has taken on 28 interns.  This company employs 200 people nationwide so the interns, whose labour is essentially free, make up 14 percent of their payroll.  Unsurprisingly, this made national news and not a little bit of criticism (this company is not the only one that has been featured in the media).

Should a scheme that provides labour to employers for free be mandatory?  Clearly, there are areas of social protection which are already mandatory.  For instance, a Jobseekers’ recipient must show they are available for, and actively seeking, work.  Past practice also requires recipients to meet with Department officials as part of the evaluation process, take up a ‘legitimate’ offer of training / job or attend an accepted training / education course (of course, there’s a number of issues with ‘legitimate’).

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