Unemployment challenge must be addressed

7 May 2010

What is very striking from today's press release from the Central Statistics Office is that the Live Register graph is beginning to look like a badly drawn straight line. It's only a few years back, at the height of the Celtic Tiger that the graph looked very similar. However, the big difference is that in the past it levelled out between 150,000 and 160,000 people, now it's over 430,000 people.

A very big challenge facing Ireland is how to find and maintain sufficient employment to get people back to work. The INOU has called for a Jobs Strategy to spell out where these jobs are likely to come from and to ensure that we are running the right education and training programmes for unemployed people so that they will get these jobs when they come on stream.

Last night on Primetime, the Taoiseach was asked where is Ireland's Jobs policy. In reply he talked about the three pillars in addressing this problem as: sorting out the public finances; sorting out the banking system; and making Ireland more competitive.

Is this a jobs policy? The INOU fears it is not for the following reasons. Firstly, the steps taken to address the deficit in the public finances is having a negative impact on jobs maintenance and creation both directly in sectors reliant on the public purse to undertake their work; and through the deflationary effect of reduced disposable income including the cut to social welfare payments. Secondly, there is no guarantee that the banks will loan out to small and indigenous businesses as the economy would require to stimulate job creation as lending policies have tightened up considerably. Thirdly, the competitiveness argument is a double edge sword as a key aspect to it is reducing wage costs which in turn will reduce the level of disposable income available to stimulate the Irish economy.

Commentators are now forecasting a return to modest economic growth for Ireland, with much of this growth export lead which is the preferred option of both Government and of many media commentators. However, the employment impact of this will be limited as export lead growth does not have the same employment kick-back as was evident from the Celtic Tiger.

Therefore, a domestic driver is required to have any real impact on the Live Register and to provide unemployed people with decent job prospects. And to ensure that this happens, Ireland needs a well thought out and detailed Jobs Strategy now!