The number of people on the Live Register has this week dropped below 200,000 for the first time in two decades. Over the past five years the numbers on the register have fallen sharply. At 201,234 in March, the number of people registered as unemployed was at its lowest level since 1983. It was 3,000 lower than in February and down 33,500 over the past year on a seasonally adjusted basis. The unemployment rate has fallen to 6.7 per cent of the workforce from more than 12 per cent four years ago and is now well below the EU average rate of 9.8 per cent.
Six years ago in April 1993, just under 300,000 people were registered as unemployed. The numbers had risen rapidly from 241,522 five years previously to reach the April 1993 peak of 297,958. But exactly how has the reduction in the numbers unemployed been achieved? Has the fall of more than 95,000 in the number of people on the Live Register over the last five years been because people have found suitable jobs?
Strong economic growth is the main reason for the fall in unemployment with job creation helping to boost the numbers employed. But it is not the only one. Controls put in place to discourage fraudulent claims for unemployment benefit or assistance and special schemes to help unemployed people back into the workforce through training and work experience have helped to reduce numbers on the register.
It is very important to note two key points about the Live Register. First, it is not a fixed set of people - people come on and go off the register as their employment status changes. For those who come off the register when they find employment, others come on to the register as factories close. It is made up of inflows and outflows.
For example, in March 1998 there were 234,782 people on the Live Register compared with 201,234 in March 1999, a fall of 33,548. But this fall was made up of some 296,970 people joining the register and some 330,518 leaving it to go to jobs, training schemes or for other reasons.
Second, the Live Register is not designed to measure unemployment. It is a measure of monthly flows taken on the last Friday of every month of people who receive a benefit payment because they are not in work and people who sign for "credits" - people who do not qualify for a payment but want to retain other benefits. It includes part-time workers (working up to three days per week) and seasonal and casual workers. Unemployment is more properly measured by the Quarterly National Household Survey (formerly the Labour Force Survey). The QNHS survey does not count casual, part-time or seasonal workers as unemployed, but it includes married women who are not on the Live Register but who tell surveyors they are available for work. Thus the LR and QNHS figures are different. The latest QNHS has the number unemployed at May 1988 at 126,600, down from 198,500 in April 1991.
Whichever measure is used the figures are falling rapidly. Calculating the fall in the number on the Live Register attributable to people finding jobs could loosely start with the net new jobs figures - new jobs created less jobs lost.
Between 1994 and 1999 IDA figures indicate that 65,643 new jobs were created in IDA-assisted companies. However, over the same period factory closures and business failures resulted in 21,009 job losses.
Therefore the net increase in the numbers employed over the period was 44,454. But these figures do not include jobs created and lost in operations not aided by the IDA which include many small operations. And more importantly they do not include people who have found jobs in the booming building sector.
The quarterly national household survey indicates that employment in the building and construction sector increased by 25,000 in 1997 alone while there were 60,000 more people employed in services and 10,000 more in industry. This survey shows that the number of people in employment increased from 1,183,000 in April 1993 to 1,495,000 by May 1998, an increase of 312,000.
While the increase in the numbers at work would more than explain the fall in the numbers on the Live Register, the facts are not that simple. Many of those included in the increase in the number at work were never on the Live register - mainly Irish people who have returned to work in the booming economy, school leavers who have gone straight into jobs and people who have come to the Republic to work.
An analysis of the outflow of 23,716 from the Live Register in January showed that 53 per cent found work - the figure included people helped back into the workforce with back-to-work allowances, 6 per cent took up educational, training and employment scheme places and 7 per cent transferred to other social welfare schemes.
Some 13 per cent were no longer entitled to unemployment payment for a number of reasons including means testing which applies on the transfer from unemployment benefit to unemployment assistance after 15 months and actions to stamp out fraudulent claims. No reason was given for 16 per cent of those who left the register and 5 per cent left for "other reasons". This is a regular pattern found in analysis carried out by the Department of Social Community and Family Affairs. Just more than half the people who leave the Live Register each month leave to take up employment. This is then a reasonable approximate measure of the numbers who have come off the Live Register because of the strong economy. An analysis of the numbers receiving unemployment benefit and unemployment assistance shows where the strongest outflows from the register are. Unemployment benefit (UB) figures - the payment made for 15 months to people who lose their jobs and are available for, willing to and capable of work - reflect people who move in and out of work, people changing jobs and contract workers. After 15 months on UB and a means test, an unemployed person moves onto unemployment assistance (UA). It therefore represents the core of unemployment, including long-term unemployment. It is where downwards movement in the numbers is really crucial.
Figures for April 1997-March 1999 show the number of people receiving UA fell steadily from 175,370 to 119,800, while the number of UB recipients rose from 62,587 to 66,400.
Actions aimed at removing people who should not have been on the register in the first place such as those working in the black economy, and, special training and work experience and employment schemes have taken people off the register.
Prosecutions for dole offences in 1998 increased by 50 per cent to 150 cases of which 108 related to individuals claiming unemployment benefit or assistance with the remainder involving employers knowingly employing staff who were signing on the Live Register illegally. Punishment has ranged from imprisonment to fines ranging from £10 to £1,000.
The Minister for Social, Community and Family Affairs, Mr Ahern, believes the "carrot and stick" approach is important. "We want to help genuine people to get off the register and get back to work, but at the control end we have to ensure that people are not defrauding the State."
Among the pro-active approaches to helping unemployed people to get into jobs is the Employment Action Plan introduced last September and aimed initially at people under 25 years unemployed for six months. The plan involves calling people for interviews to establish their needs and to see if suitable training/education would improve their chances of employment.
Of the first group of interviewees in September 1998, 78 per cent had left the Live Register by February 1999. Of those no longer on the Live Register, 43 per cent went to jobs, 18 per cent to FAS courses, 6 per cent to further education and 3 per cent to other benefits.
But more than one third of those called for interview did not attend. About 38 per cent had found jobs before the interview, but others may not have been entitled to be on the register - 21 per cent did not sign on again after the call for interview. An important finding of the interview process is that many of the interviewees required help to develop basic literary skills.
This scheme is to be extended to take in those under 25 who have been unemployed for 18 months or more and to people between the age of 25 and 34 who have been unemployed for more than a year. Other schemes to help people back into work include the Fasttrack to IT (FIT) programme designed to prepare people for jobs in the information technology sector. The Back to Work Allowance programme is aimed at helping people who have been unemployed for a long time to return to employment or self employment.
The benefits of reducing the numbers unemployed are wide ranging, from the positive financial and mental impact on those who get jobs to the savings for the State on unemployment and social welfare payments. However, some economists consider that many of those remaining on the register while there is a shortage of workers in some sectors are "hard core" unemployed - people who may never work because of social, addiction or other problems.
