Jobs crisis spreads to high-skilled workers and women

ANALYSIS: Nothing over the history of the Live Register compares to the present disaster, writes DAN O'BRIEN Economics Editor…

ANALYSIS:Nothing over the history of the Live Register compares to the present disaster, writes DAN O'BRIENEconomics Editor

YESTERDAY’S JOBLESS claimant count was grim. In a dense 15-page sheaf of data on the composition of the country’s dole queues, there was not a single point of light. More people are signing on; claimants are spending more time on benefits; the jobs crisis is spreading to white-collar workers and women; and every single region of the country is experiencing more unemployment. Utterly grim.

The sheer scale of what has happened in the jobs market, and what continues to happen, is illustrated in Chart 1. The Live Register, measuring the number of people claiming unemployment benefits, goes back to January 1967. Nothing over that 43-year history compares to the jobs disaster that has taken place in the past 36 months. The claimant count has rise threefold in just three years. It took seven years to triple in the bleak 1980s.

Compared to every other developed country bar Spain, joblessness is worse here. And it is getting worse. As Chart 2 shows, unemployment in Europe and the US has been broadly stable at around 10 per cent since last autumn. In Britain it has held steady at just under 8 per cent for a year. In Ireland, it rose for the third consecutive month in July. It now stands at 13.7 per cent, a rate last recorded in 1994.

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The only surprise is that the rate of unemployment levelled off in the early part of 2010. From what we know of the number of jobs in the economy (from the separate National Household Survey), very few white-collar workers had been affected by the recession up to the first quarter of 2010 (the latest data available).

It has always been only a matter of time before this changed, not least because a shake-out is overdue in the banking sector and the hiring freeze in the public sector must eventually squeeze numbers there by natural wastage.

Yesterday’s figures confirmed for the first time that joblessness among white-collar workers is rising, and at an accelerating pace.

The Central Statistics Office issued an entirely new data series on claimants’ professional background (since last October, welfare recipients have been asked to tell bureaucrats what their last job was). This is a welcome innovation. Having more detail on the skills of claimants allows greater clarity on the problem. This will, among other things, help hone the policy response to the crisis.

Chart 5 shows who is claiming welfare by occupational background. It is clear that the lower one’s skills level, the more likely one is to be signing on. However, the uptick in unemployment in recent months has been driven overwhelming by higher skilled people joining the dole queues.

In the three months to July alone, the rise in professionals claiming benefits rose by a massive 29 per cent, by 17 per cent for clerical and secretarial workers and by more than 12 per cent for those classified as “associated professionals and technical”.

Changes are also taking place in gender and nationality of those claiming benefits (See Charts 3 and 4). Unsurprisingly, as the shock waves from the unemployment earthquake move out from the epicentre in manual labour, women are far less protected than initially. In fact, since the beginning of the year, two-thirds of the crude increase in the Live Register has been accounted for by women.

The balance between Irish and non-nationals has shifted even more radically. In the early months of 2009, foreigners were losing their jobs in astonishing numbers, with double-digit month-on-month rates of signing on. Since then, the situation has been transformed and the numbers of non-nationals receiving benefits has actually fallen by more than 2,000 since the start of the year. Over that time, more than 30,000 Irish people have joined the ranks of claimants, unadjusted for seasonal factors.

Yesterday’s numbers were depressing by any objective interpretation. An eternity of ministerial exhortation to the media will not change that.