In truth we are still a long way from full employment, writes Eric Conroy
Many economists and politicians now talk of Ireland having attained "full employment". Sometimes they speak of "near" or "effective" full-employment in the context of a current unemployment rate of 4.4 per cent, expected by some to go down to 4.2 per cent by the end of the year. And the media sometimes refer to "people being unavailable for jobs" and large numbers of work permits being granted for non-European Economic Area (EEA) citizens in recent years.
So what is the true picture on unemployment in Ireland in 2004?
For the Irish National Organisation of the Unemployed (INOU) the International Labour Organisation (ILO) definition of unemployment is very restrictive.
Someone is considered unemployed only if they meet three criteria: working less than one hour, being available for work in the previous week, and having sought work in the previous four weeks.
The result is that if a long-term unemployed person, willing to take offered work, did not actively seek work in the preceding four weeks because of disillusionment following continuous job rejections, he/she is considered outside the labour force.
The live register currently stands at 168,000 or more than double the ILO unemployment figure of 83,600. The Central Statistics Office always notes that the live register is not a record of unemployment but it essentially covers people in receipt of unemployment benefit and assistance. (The extra numbers include some part-time workers and those who sign on for credits.)
Interestingly, when respondents are surveyed about how they see their own status, the "unemployed" total is 114,300, or 37 per cent more than the headline ILO figure.
On this basis, we are no way near full employment at present. We would be approaching that if there was a small element of short-term unemployment amounting to no more than 1 per cent of the workforce (of, say, under 3 or 4 months duration, and with no longer-term unemployment beyond this period). In a functioning economy, there will always be some company closures and downsizing leading to job losses and unemployment. However, people should be able quickly to find themselves a new job.
A very significant component of the unemployment figures is the level of long-term unemployment, defined as 12 months continuous joblessness. Having fallen to 1.2 per cent of the labour force in 2001, long-term unemployment is now on the rise again. In the last Quarterly National Household Survey, there are now 30,500 people (or 1.6 per cent) in this category, the highest since 1999.
While total unemployment is falling, the proportion who are long-term unemployed is rising sharply (now 36.5 per cent, up from 25.5 per cent in 2002). Given the misery of being without a job for more than a year, nobody can claim that this reality reflects "full employment".
A lot more needs to be done - indeed we are moving in reverse gear in relation to the Government's National Anti-Poverty Strategy target of eliminating long-term unemployment by 2007.
Employers have been quoted in the media saying that they cannot recruit locally for vacant posts and that unemployed people are not interested in taking up job offers. And in recent years some have recruited significant numbers of non-EEA citizens to fill positions they claim cannot be filled from the local labour market. How is this so, with over 100,000 unemployed people available for work?
The large reduction in unemployment from the 1980s has demonstrated that unemployed people do want to work and were well capable of taking up the new jobs provided. But, as unemployment falls sharply, those still without work are more distant from the labour market and need more help in positioning them for suitable posts. This has been termed "employability" and is a key part of Ireland's National Employment Action Plan.
Community employment and jobs initiatives are active labour market programmes designed to help unemployed people back into mainstream employment. These programmes have worked very well in the past and are an important part of the battle against unemployment into the future. The high supports process is a new and valuable programme to address the particular barriers that prevent individuals from taking up a job and must be beefed up from its current very low level.
There is evidence that the work permit system is being abused by some unscrupulous employers to bring cheap labour into the country at the expense of local unemployed people. Before the changes made in 2003 to restrict work permits to job categories where workers were clearly in short supply, many employers were paying lip service to the need to trawl the Irish and EU labour market before requesting work permits.
Evidence has shown that in some cases the accepted going rate for the job has not been paid, minimum wage legislation has not been fully adhered to, and employers have been making deductions for accommodation, clothes, etc, without the consent of the employee. Having the work permit under the control of the employer means insecurity for the newly-arrived migrant and makes it a form of bonded labour. We believe work permits should be in the hands of the employee.
At the end of the day, there still is a stigma about being unemployed, although, happily, less than in the past. The Irish experience is that unemployed people do want to work and do a good job if given the chance. The INOU has warmly welcomed the Tesco initiative in north Dublin to recruit from among the ranks of the long-term unemployed. We encourage other employers to do likewise. As regards achieving "full employment", in the immortal words of Fianna Fail: "A lot done, more to do."