ANALYSIS:The tactics used to keep Irish tills ringing have been limited to putting the lights on earlier, writes Laura Slattery
IT IS never a good time to lose your job, but for the 16,900 people who joined the queue of jobless "signing on" in November, the blaze of Christmas lights adorning city shopping streets will be a galling reminder of the prosperous past.
There seems to be little point in trying to convince shoppers that they have a "patriotic duty" to shop at home, as Minister for Finance Brian Lenihan did yesterday, if the soaring unemployment rate means they can't afford to shop at all.
Unfortunately, a cautious Christmas combined with the continuing credit crunch suggests that a large chunk of the 300,000 people who work in the Irish retail sector will discover the misery of losing their jobs in January.
"There is no relief in prospect in 2009," Retail Ireland said bluntly in response to the dismal Live Register data.
Its analysis encapsulated the spiral of gloom that is now enveloping the economy: the rise in unemployment has left consumers reluctant and unable to spend money, with the result that unemployment will inevitably climb higher in the New Year.
Several economists forecast that the jobless rate, now at an estimated 7.8 per cent, will jump to double digits by the end of 2009.
But while the British government has cut its VAT rate, so far the tactics employed to keep Irish tills ringing have been limited to putting the Christmas lights on earlier.
Alarmingly, the record surge in unemployment benefit claimants revealed yesterday was not the only appalling economic data to emerge this week. On Tuesday, the exchequer returns revealed a darkening picture for tax receipts in November, with the overall deficit in public finances now set to exceed €11.5 billion in 2008.
The difference between the value of VAT receipts expected at the start of the year and the amount collected stands at €2.1 billion - a shortfall that will be exacerbated if subdued shoppers skimp on this year's festivities. The exchequer returns also revealed a €1 billion shortfall in the amount of corporation tax collected in November - a sign that large corporations are suffering a profits squeeze.
The knock-on consequences for the labour market in 2009 don't bear thinking about.
It is a measure of how bad the situation is that we now have to go back further in history to identify a time when the jobs market deteriorated so sharply and severely.
Forget 1983: in percentage terms, the rise in unemployment benefit claimants in November was the highest monthly rise since January 1975, Davy Research economist Rossa White noted.
"The likelihood is that things will get worse before they get better," said Bloxham Stockbrokers economist Alan McQuaid.
So what can be done? Mr McQuaid suggests a 1 percentage point cut in employers' PRSI to boost employment "or, at the very least, protect existing jobs". Fine Gael says employers should be exempt from PRSI on any new staff taken on in 2009. Business groups want the national wage agreement suspended and local authority charges frozen.
And everybody wants the banks to start lending to small businesses again.
