Brian Keegan: Jobs growth has been uneven across country since downturn

BRIAN KEEGAN: Brian Keegan: Jobs growth has been uneven across country since downturn

The month of January isn’t particularly noted as a time for good news.

But in the last few days, despite the outrage of hospital overcrowding here and the escalating tensions in the Middle East, there were a few positive stories. Boris Johnson achieved, seemingly in less than 15 hours, what his predecessor Theresa May had not achieved after in 15 months — the acceptance of the Brexit withdrawal agreement by the British parliament. At least that has removed some of the Brexit uncertainties.

Closer to home last week, the IDA and Enterprise Ireland released assessments of job creation progress in 2019. These were essentially positive. The IDA was able to point to the numbers directly employed in the multinational sector in Ireland, which are now at an all-time high. Businesses supported by Enterprise Ireland also made gains on the jobs front, though some jobs were lost as well.

Nevertheless, the claim is often made that job creation is confined to Dublin and the other cities, with the regions losing out in terms of job growth. The IDA seems to be sensitive to this particular claim, highlighting that regional investments by multinationals in its care have increased by more than 50% in the past five years.

The large corporation tax contributions of multinationals has been to the fore in recent times. What is sometimes overlooked is that, according to 2018 figures from the Revenue Commissioners, 28% of all Irish employments are within multinational companies.

Brian Keegan: Jobs growth has been uneven across country since downturn

The Revenue analysis also extends further, and it is possible to identify some types of tax receipts on a county by county basis as well as sector by sector. The gross amount of tax collected through the PAYE system on a county by county basis can be seen as indicating wage creation, and is thus a proxy for employment creation, in the various parts of the country.

Counties with more lower-paid workers will show lower tax receipts than others even if, pro-rata, they support more jobs. Results could also be distorted if counties are host to state agencies whose payroll across the country is centralised in one particular provincial town.

Nevertheless, PAYE statistics can show how employment has recovered since the downturn.

The most current figures from 2018 show that, as might be expected, Dublin and Cork delivered the greatest amounts of PAYE from employers and their workers located there. Counties in the commuter hinterland of Dublin — Kildare and Meath — were also in the top half of the list. There are indicators of the change in the levels of PAYE payments from counties by comparing the 2018 figures with 2011 when the recession well and truly had a grip on the country.

Counties which are typically regarded as having a a strong industry presence — Dublin, Cork, Limerick, Kildare, and Clare — registered an increase in payroll taxes of 40% or more, which clearly indicates the recovery in employment.

Other counties did not fare so well. For instance, Sligo, Cavan, and Offaly showed smaller growth. The likes of Laois showed a considerable increase from 2011 but had started from a very low base.

While the Revenue figures are undoubtedly accurate, care has to be taken on drawing conclusions.

Nevertheless, it seems fair to say that they reflect an uneven pattern in the increased availability of jobs across the country since the downturn.

It’s undoubtedly good news that the recovery in employment continues. It would be even better news if that recovery was spread evenly countrywide.

Brian Keegan is director of public policy at Chartered Accountants Ireland.

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