The call by FÁS for a reappraisal of the work permit system, which allows foreign workers take jobs in Ireland, comes against the backdrop of heavy job losses in the industrial sector and falling demand for labour generally. With unemployment creeping upwards, FÁS says the number of permits being granted is too high and should be reduced.
In addition, it implies that the system is not working. More permits are likely to be issued this year, it notes, than the 36,000 sanctioned in 2001.
The authority says the labour squeeze at the height of the boom probably led employers to substitute domestic unskilled workers with cheaper foreign labour. This exploits holders of work permits and denies jobs to the low-skilled. Now the authority wants to confine the permit regime to fields in which there are specific skill shortages, such as civil engineering and project management. It fears adding to domestic unemployment through the provision of work permits to people with lower wage expectations.
The proposal amounts to a radical departure for a body which held job fairs in cities throughout the world only last year. In addition, it is not entirely clear that the Government will accept it. According to the Department of Enterprise, Trade and Employment, there are no plans at present to change the system which, it says, is flexible and responsive to labour market needs.
In theory, the system kicks in only when workers from Ireland or the European Economic Area, comprising the EU countries, Norway, Iceland and Lichtenstein, cannot be found to fill posts here. But in practice, the rule was not always adhered to.
FÁS admits as much in its labour market review. It seems that certain employers take their pick from permit-holders. It would appear then that the system is not working, despite the Department's claims.
FÁS says the economy has entered a new phase, forecasting that employment growth will be limited to 1.5 per cent in the 2002-2004 period. The days of full employment are over, it would seem.
With turmoil on the international stock markets and fear of war against Iraq adding to uncertainty nearer home, the demands on domestic labour policy are changing. Slower growth means there is no longer a need to increase labour supply wholescale, save in areas of skill shortage.
Rethinking the permit policy might help those who lose work, but it will not insulate the economy from a global downturn.