THE REPUBLIC’S unemployment rate was higher in the final three months of 2009 than initially estimated, according to new figures from the Central Statistics Office (CSO).
The latest Quarterly National Household Survey from the CSO showed a jump in long-term unemployment, increased part-time working and a contraction in the size of the labour force.
The seasonally adjusted rate of unemployment in the final quarter of last year was 13.1 per cent, the CSO said, which was higher than the 12.4 per cent rate it had earlier estimated based on the Live Register of unemployment benefit claimants.
More than 267,000 people were unemployed at the end of the year, up almost 98,000 on an annual basis.
Fine Gael deputy leader Richard Bruton said the new generation of workers on which Ireland’s recovery depends was being “hollowed out” by the “scourge of emigration”. He added that the Government’s policy of cutting investment and raising taxes would only drive more people out of work.
Labour Party deputy leader Joan Burton said a “scorched-earth budget” was taking its toll on the Irish economy.
“We need to focus like a laser on the jobs crisis, which shows no sign of abating,” Ms Burton said.
A third of people who are unemployed are now categorised as being “long-term unemployed”, which means they have been out of work for more than a year. Ireland’s long-term unemployment rate in the final quarter of 2009 was 4.1 per cent, up from 1.7 per cent a year earlier.
Compared to the previous quarter, there was a fall in short-term unemployment – the first such fall in two years.
“The continued rise in the long-term unemployment rate and the fall in those classified as short-term unemployed suggests an emerging structural unemployment problem,” said Fergal O’Brien, economist at business group Ibec.
When people who are not actively seeking work but indicated that they would like to be in employment are included, the percentage of people who are unemployed increased to 16.5 per cent, up from 10.8 per cent a year earlier, the CSO said.
Meanwhile, the number of people in full-time employment fell by 193,200 over the year, a decline of 11.6 per cent. However, there was an increase of 26,400 in the numbers employed part-time, with the diverging trends suggesting that employees are taking any work they can find in the fragile labour market.
The figures also show that the drop in full-time employment has been concentrated in three main sectors: construction, manufacturing and the retail and wholesale sector.
Economists pointed to an easing in the rate at which people are losing their jobs, but there were few other positives to be found in the CSO’s data.
Alan McQuaid, economist at stockbroking firm Bloxham, said the survey was “a sobering reminder to the Government of the current weak state of the labour market”, while Goodbody Stockbrokers’ analysts Dermot O’Leary and Deirdre Ryan said they were still waiting for “the turn” in the labour market.
The QNHS, which gives a more comprehensive picture of the jobs market, suggested that “the progress that was made was pretty minor”, they said.
Not Participating: Unemployed By Another Name?
THE “TWIN factors” of rising emigration and declining participation in the labour force “flatter to deceive” when it comes to calculating Ireland’s unemployment rate, says Labour Party finance spokeswoman Joan Burton.
How does this work exactly? The effect of emigration is clear enough: instead of joining the dole queues, people who lose their jobs leave the State instead. This keeps the number of claimants down, but should also lead to a contraction in the size of the available labour force.
In the final quarter of 2009, net migration contributed 15,400 to a 69,100 decline in the size of the labour force. But the majority of the decline is accounted for by a fall in what’s called the participation rate. In other words, a bigger proportion of the working age population are “choosing” to avoid the jobs market.
The participation rate, which exceeded 64 per cent in early 2008, has now fallen back to 61.2 per cent. The other 38.8 per cent is neither employed, nor counted as unemployed, because they are not actively seeking work. They may have chosen to look after children full-time or, as is clearly the case among younger age groups – where the sharpest falls in participation have occurred – they may have chosen education or training. But, as with most work choices, the choice not to participate is not made in isolation from economic forces. There is no evidence that today’s youth are inherently any less fond of earning a wage than their Celtic Tiger counterparts – the third-level students who worked near-full- time hours on top of their courses and the second-level students who ditched homework for shelf-stacking. The percentage of 20-24-year-olds who participate in the workforce has fallen from 77.4 per cent in mid-2008 to 69.5 per cent in the final quarter of 2009.
Many of those who are classed as not participating would, in more buoyant times, prefer to be working, which is why economists and Ms Burton believe falling participation in the labour force “flatters” the unemployment rate.
