UNEMPLOYMENT HAS increased to an estimated rate of 7.8 per cent as the number of jobless people claiming benefits surged in November by the highest amount on record.
As job losses spill beyond the collapsed construction sector into all parts of the economy, the rate of unemployment will breach 10 per cent by the end of 2009, economists agreed yesterday.
The Live Register of jobseekers benefit and allowance claimants surged by an unprecedented 16,900 people last month, according to seasonally adjusted numbers from the Central Statistics Office (CSO).
Over the past year, the number of claimants has soared by 66 per cent, with 106,864 people joining the register, while job cuts have now spread to the retail, manufacturing, transport and financial service sectors.
Retail Ireland, the Ibec-affiliated group that represents retailers, said job losses were inevitable as a result of increasingly difficult trading conditions.
Consumers' reluctance to spend money due to the rise in unemployment and stagnant property market has been aggravated by a loss of business to Northern Ireland, according to Retail Ireland director Torlach Denihan.
Labour Party employment spokesman Willie Penrose said the economic turmoil was hitting local businesses and small-to-medium companies particularly hard.
"What we are now facing is the prospect of businesses closing, not because they are unprofitable, but because they cannot get access to credit," he said.
The Labour Party has proposed the establishment of a fund to ensure credit streams remain open to small businesses which are suffering as a result of the downturn in consumer spending. Fine Gael employment spokesman Leo Varadkar has suggested that employers should be exempt from PRSI on any additional staff they take on in 2009.
"This isn't just a crisis; it's an emergency," Mr Varadkar said.
The Irish Small and Medium Enterprises Association (Isme) said the Government's response to date in tackling the jobs crisis had been "non-existent".
The standardised unemployment rate of 7.8 per cent, which is an estimate based on the number of claimants, compares with an official seasonally adjusted rate of 6.3 per cent in the third quarter of 2008.
Unemployment is now at its highest rate since April 1998. But it is the pace of change that is worrying economists. The monthly rise in claimants was the highest on record in absolute terms and the largest percentage spike since January 1975.
The number of jobseekers benefit claimants stands at 277,200, although not all of these people are unemployed as some part-time and casual workers are also entitled to payments. The last official measure of unemployment, the CSO's Quarterly National Household Survey, suggested 143,500 people were unemployed in July.
Some 37,300 official redundancies have been notified to the Department of Enterprise, Trade and Employment so far in 2008, up 57 per cent on an annual basis.
