Working Abroad Expo RDS

This post originally appeared on Richard’s personal blog: Public Engineering

Far from the rosy picture painted by Enda Kenny and other ministers last week, employment has not stabilised and young people see no future for themselves in Ireland. Sky-high youth unemployment and casualisation of existing employment have led to young people voting on government policy with their feet by leaving the country. The purpose of this article is not further depress, but to cut through the government doublespeak with facts and analysis and to highlight an alternative. 

Last Monday, Enda Kenny wrote in The Irish Times: “Together we have started to turn the tide to recovery […] it is clear Ireland is headed in the right direction,” he continued: “At the core of the Government’s strategy is the creation of jobs for our people […] together we will get Ireland working again.” The previous day a ‘Working Abroad Expo’ was held in Dublin and was attended by 12,000 people (photo above). On Wednesday, a second ‘expo’ was held in Cork, again attended by thousands. The next day, Eamon Gilmore took to TheJournal.ie. In the space of four days, Kenny’s and Gilmore’s doublespeak was revealed – in the place of employment, we have unemployment; in the place of recovery, we have deterioration. Kenny claims that “the unemployment problem has stabilised,” however, any crumb of truth in this statement is based on emigration and the casualisation of existing employment, as this article will show.

The queues for the Working Abroad Expos could easily be mistaken for dole queues or flight check-in queues, and in essence, they are a bridge between the two. Emigration is a clear consequence of unemployment, which itself is a consequence of disastrous government policy. “We have seen the first annual increase in employment since 2008” said Kenny on Monday. Government ministers have made much of this development since the release of the Q4 2012 CSO QNHS which showed that employment increased by 1,200 people and unemployment decreased by 19,200 last year. Unfortunately, this can be explained by emigration and the casualisation of employment. Let us look into the figures – the table below is adapted from Table 1a of the report.

Table 1

As the table above shows, although there was an overall increase of 1,200 people in employment, numbers with full-time work dropped by 12,700 and numbers with part-time jobs rose by 14,000. Firstly, this is a clear shift from full-time to part-time work, an indication of casualusation of labour. Secondly, the labour force fell by 18,000 (despite population growth), most likely due to a combination of emigration, returning to education, and retirements. Thirdly, those not in the labour force increased by 19,800, most likely due to returning to education and retirements. These comments should, at the very least, illustrate how manipulable the figures are. More broadly, they illustrate that there are complex processes taking place, which at first glance may give the impression of recovery but actually have the opposite effect.

 Let us briefly examine each of these processes with a particular focus on young people. To do this, I will look at the CSO figures for employment and emigration in the 15-19 and 20-24 age brackets. These age brackets have been used for convenience and comparability – anyone over the age of 24 shouldn’t take offence!

Unemployment

Let us for a moment assume that Enda Kenny is right and unemployment had stabilised, it remains at a very high level:  294,600 unemployed and 428,800 on the live register. Youth unemployment, in particular, has devastating social consequences for those affected, and the National Youth Council of Ireland has spoken to some of them here. The Troika, in its most recent quarterly review, stated: “Unemployment remains stubbornly high, and is increasingly long-term in nature. Reducing it must remain an urgent policy priority.” Government policy to reduce unemployment has been nothing short of tragic.

The Joint Oireachtas Committee on Jobs, Enterprise and Innovation published a report last month entitled ‘Creating Policies that Work: Actions to address youth and long-term unemployment’, based on the government ‘Action Plan for Jobs’. This report recommends 35 “initiatives that will have a direct and measurable impact on job creation in Ireland”, including: seven different types of training, expansion of JobBridge, reducing regulations on business, more subsidies for business (Jobs Plus) and encouraging summer work among school students. Paul Murphy MEP has looked at these actions in more detail here.

Employment graphs

These two charts illustrate the manipulability of the figures. Although the unemployment rate of 26% for 20-24 year olds has remained steady (top), the labour force has fallen by 34,000 or 17% (bottom). The bottom graph also shows that both the employed and unemployed are leaving

In emphasising training and education, the plan misses both the cause and the extent of the unemployment crisis. In the absence of job creation, further education and training is meaningless, unless it is preparation for emigration. The reason for this: there are 31 unemployed workers for every available job in Ireland, according to the EU Vacancy Monitor, up from 27 the year before. This is the fourth highest ratio in the EU and the average for the EU27 is 7.4. This means that if all available jobs were filled, unemployment would reduce by just 3%. More education or training for the unemployed will not solve the unemployment crisis, as economist Michael Taft comments: it simply “changes the names for the lucky ones to get a job”. Lack of education or training (or willingness to work for that matter) is not the determinant of unemployment – the lack of job creation is.

Emigration

Due to the prevalence of emigration in Irish history, it is difficult to avoid cliché when discussing the topic. Human migration is, of course, perfectly natural. Travelling, experiencing new cultures and learning new languages can help the development of an international consciousness, cut across discrimination etc. But this is not the character of migration in question. The emigration in question is economically forced emigration caused by high levels of unemployment and facilitated by the Irish emigrant tradition and English language ability. It certainly is not a “free choice of lifestyle” as suggested by Michael Noonan last year. Young people, although they do not have any direct experience of this tradition, have been the hardest hit by emigration. As the chart below shows, emigration by 15-24 year olds has doubled since 2006 to 35,800 in 2012.

Youth emigration and unemployment

It should be noted that emigration figures alone are not sufficient and it would be dishonest of us to use emigration figures to give political points more gravitas; net migration is a stronger indicator, calculated by simply subtracting the numbers emigrating from the numbers immigrating. As the chart below shows for 15-24 year olds, and as everyone in Ireland knows, there has been a shift from net immigration to net emigration since the crisis and the trend is for increasing net emigration.

Net youth migration

Looking at reductions in labour force numbers, it is possible that some of this can be explained by a return to education and not necessarily emigration. However, if we look at population statistics for 15-24 year olds we see that the overall number has declined, despite overall population growth – a decline which can be best explained by emigration. There were 75,554 babies born in 2009, the highest number since 1891, although this has fallen marginally since 2011. This birth rate has manifested itself in a large population increase in recent years; however, the 2011 showed that the numbers in the 19-24 year old category fell by 12% on 2006, see graph below. This can be attributed to emigration – young people not seeing a future for themselves in this country. One year ago, 41% of people did not see a future for themselves in this country, evidently this has not changed. According to the IMF, without emigration the employment rate would be around 20% – over 100,000 people more.

Population change

Casualisation of labour

The fact that, in Ireland in the last year, numbers with full-time work dropped by 12,700 and numbers with part-time work rose by 14,000 shows how an increase in employment figures can actually signify a decrease in overall employment. In fact, while employment has plummeted since 2007, part-time employment has risen by almost 15%. This shift from full-time to part-time work is an indication of the casualisation of labour. Casualisation is the replacement of full-time workers (who have pensions, sick pay and holiday rights) with part-time workers (who have significantly fewer rights and shorter contracts) and eventually with as-needed or casual workers. Workers at the end of this process face lower wages, forced flexibility, little to no notice of working hours, no job security and generally precarious working conditions. Some commentators refer to these workers as the precariat, the precarious proletariat. Casualisation is also an indication of a shift in employment from manufacturing to the service industry, another worrying trend.

Conclusion

Following the announcement of the ‘stabilisation’ of employment, government ministers and TDs took to the newspapers, TV and radio to brag of their success. After Kenny’s dab at journalism in The Irish Times on Monday, Gilmore wrote an article for TheJournal.ie on Thursday entitled ‘Labour has brought Ireland from chaos to stability in two years’  – the arrogance! Although at first glance the recent employment figures may appear more stable, by cutting through the spin and taking a better look at those figures (as this article has hopefully done), it should be very clear that this stability is a thin veneer and that structural problems in the Irish economy have not been resolved. One such structural problem is the collapse in investment for production, a key determinant of job creation.

Ireland has seen a frightening collapse in investment since 2007, which can be seen in figures for Gross fixed capital formation (GFCF). The CSO, which uses GFCF as an indicator of economic progress, defines GFCF as “investment in assets such as building and construction, and machinery and equipment. Such investment is generally regarded as leading to higher productivity and an improved living infrastructure”. Basically, GFCF is investment in the equipment and materials needed for production and therefore job creation. This investment has fallen from a high of 25.5% GDP in 2007 to just 10.1% in 2011 – the lowest in the EU27. Given the drop in GDP, it may be more appropriate to look at absolute figures where the fall represents a reduction of €34 billion – see graph below.

GFCF

Gross fixed capital formation (at constant market prices)

A lack of private investment means that the state must step in to create jobs, particularly in construction. Almost 100,000 workers on the live register are part of the ‘craft and related’ occupational group – by far the largest grouping on the register. There are countless potential construction and maintenance projects that would create employment, stimulate the economy and deliver socially-necessary infrastructure, including: road maintenance, active travel infrastructure, public transport, schools, hospitals, and social housing. There are, of course, countless other areas of socially-necessary employment with potential for job creation. To avoid deflation, funding for such public investment must come from those in society who can afford to pay through income and wealth taxes. The repudiation of onerous socialised banking debt must also be considered. Sustainable fundraising mechanisms for public engineering will be discussed at length in further entries on my blog.