Government is getting it right on jobs front

I have argued to the point of boredom since the Government came into office that its success or failure should be determined at end of its term by the number of people in meaningful employment.

From an economic and social perspective, unemployment is an unambiguous evil as it destroys morale as well as representing a massive loss of human potential and economic potential. Many of the problems we are dealing with as a society, such as personal debt, depression, emigration and much more besides, could be very positively impacted by an improvement in the employment situation.

In fairness the Government does get this point.

Yesterday it launched the latest version of its ‘Action Plan for Jobs’. It contains 385 actions, many of which in their own right or in isolation look quite trivial, but when seen as part of a bigger package make a lot of sense. The Government does appear to be working very closely with and taking on board the views of those who are in the business of creating jobs. This is good.

There is a clear recognition that the role of government is first and foremost to create the environment where entrepreneurs are able to create jobs. The last thing we require is artificial job creation by government.

The latest instalment of the action plan is heavily based on promoting entrepreneurship, the business start-up sector, construction and foreign direct investment. The aim is to focus on measures that will boost the broadly defined competitiveness of the economy, enhancing productivity, improving the export intensity of the economy and helping exporters diversify into other markets. I was delighted to see extra resources being devoted to the Industrial Development Authority (IDA).

Ireland punches way above its weight in the global FDI arena. A glance through the list of companies that operate here bears testament to the good job that the state agency is doing. The IDA obviously does a superb job in convincing potential investors to come to Ireland. Consequently, it would make no sense to subject the agency to the expenditure cutbacks that many other organs of State are being subjected to.

If an agency is doing a good job, then it makes sense to increase the resources directed at it. This is exactly what the Government is doing. Ireland is not well represented by companies from many of the rapidly growing emerging economies, so the potential is enormous, but significant resources are required.

It is interesting that on the day that the Government launched the latest version of the plan, the CSO released employment data than can only be described as relatively impressive.

In the year to the end of December, employment increased by 61,000 or 3.3%, to reach just over 1.9m. This is still a distance away from the peak of the labour market, at over 2.17m jobs in the third quarter of 2007, but it is certainly moving in the right direction. Of the 61,000 jobs created, 33,000 were amongst the self-employed and 28,000 were private sector jobs. Of the 14 sectors in the economy, 10 achieved an increase, with the hospitality sector creating an extra 17,400 jobs.

The unemployment rate at 12.1% is still way too high, and the long-tern unemployment rate of 7.2% is still a serious concern, with the long-term unemployed accounting for 61.4% of the total.

Of all the economic data releases over the past seven years, the last two employment releases are far and away the most positive.

If the external environment continues to get steadily better and if the Government continues to implement the measures contained in the ‘Action Plan for Jobs’ there is no reason why another 60,000 jobs at least will not be delivered over the coming year.