Unemployment figures for the month of January should ring alarm bells for the social partners and for the Coalition Government.
The number of persons out of work increased by 4,559, to a total of 170,701, and the figure represented the highest jobless total for three years. There has been a steady deterioration in the unemployment situation, with thousands of jobs being lost every month through factory closures, and economists predict the situation is likely to worsen.
Ireland has been insulated from the worst effects of the global downturn. But that situation is changing rapidly, as is clear from a range of measurements produced by the Central Statistics Office. Medical and pharmaceutical exports grew last year, but elsewhere in the industrial sector there was a general decline. That trend was particularly marked for the telecommunications and electrical machinery industries.
With the highest inflation rate in the European Union, Ireland has been losing competitiveness. And the rising value of the euro against sterling and the US dollar will make matters worse. In that context, the Government's commitment to bring forward a range of anti-inflationary measures as part of a new national wage agreement should be given priority. Action on its long-promised decentralisation programme, as part of a national spatial strategy, would also help to generate economic activity in the regions and bolster public morale.
Political and economic instability on a global scale is likely to impact on tourism, particularly where US visitors are concerned. Because of that, the services and hospitality sectors will have to provide very good value for money if they are to attract a compensatory number of European and British tourists. The days of free-wheeling growth are gone and recovery will require hard work, careful planning and attractive holiday packages.
The number of people gainfully employed is still touching record levels. In spite of that, employment black spots continue to exist in certain regions. And the number of long-term unemployed is edging up again. The jobless rate rose to 4.5 per cent last month and it is expected to pass the 5 per cent mark by the end of the year. In historic terms, those figures are still quite benign. But the trend is extremely worrying. And if the international economy remains weak, a recovery in the labour market could be delayed for years. If society wishes to avoid the threat of high unemployment at some future date, it must begin to make difficult choices and accept unpalatable disciplines.