Dire jobless figures tell you all that you need to know about why we have to reopen
Paschal Donohoe, the finance minister, says that remaining at Level 5 for December might have cost €1bn. Picture: Julien Behal
This year is one we will all want to forget as quickly as possible, and we hope that we can look forward to better times. How 2021 turns out will be influenced, above all else, by the vaccines.
In that context, there are certainly grounds for optimism. We can only hope that safe and effective vaccines will be delivered in the coming months and that our health authorities will do a better job in dispensing them than they have done in managing the crisis since March.
Last week, we heard some government heads say that many of Ireland's Covid-19-related statistics are among the best in Europe. I guess that is what can be achieved if policymakers are prepared to sacrifice business, livelihoods, and the mental health of the nation.
Ireland has endured the toughest restrictions across the EU, so, naturally, we should be doing better than others on infection numbers.
We could, obviously, have remained locked down for another two months, in which case our Covid-19 statistics might look great, but at what cost? A series of rolling lockdowns is not a good strategy and is indicative of policy failure in other areas. As the Government has said, but had until last Friday appeared to ignore, we have to learn to live with the awful virus.
I was somewhat amused, and somewhat angered, over the weekend by the reaction of some of the health-related talking heads who have dominated our media since March. They cannot appear to accept that the decision taken by the Government on Friday has any justification, and they are promising us very rough times early in the new year.
Perhaps these dire predictions will come to pass. But rational thinkers would have to accept that the Government did not have much choice, in the context of livelihoods, mental health, and business survival.
Another four or five weeks of lockdown would have resulted in a type of anarchy, from many young people in particular. It is the right decision to open many businesses in safe and controlled ways, while recognising there is nothing that is risk-free.
A scan of the employment figures is sobering. On November 23, 352,078 people were in receipt of the pandemic unemployment payment (PUP), of whom 16% were in retail and 29% in accommodation and food services. In total, these two sectors account for 160,000 people.
In addition, 25% of PUP recipients are under the age of 25. Not alone have our younger people suffered disproportionately, they have also had the most exciting time of their lives put on hold, by health policymakers. This situation cannot be sustained.
Between the PUP, the live register, and the new Employment Wage Subsidy Scheme, 900,000 workers have been in receipt of a welfare payment during Level 5.
These dire labour market issues, their associated fiscal cost, and their impact on the mental health of the nation were instrumental in the Government's decision to stand up to the scorched-earth policy recommended by the National Public Health Emergency Team (NPHET).
The finance minister has estimated that remaining at Level 5 for December would have cost a further €1bn. Of course, the various tax revenues that would have been foregone, through Vat and other tax sources, would increase this cost considerably.
Opening up is a risky strategy from a health perspective, but sticking with Level 5 might have given rise to behaviours that could have turned out to be riskier than the path that is being chosen.
As the economy is being reopened, Brexit is, of course, grinding slowly towards some sort of conclusion, but we are not yet sure what the nature of that conclusion will be.
Deal or no deal, we are heading towards some variation of a hard Brexit, which will alter how we do business with the UK. There is not a lot we can do about that. Britain is on the brink of making a once-in-a-generation mistake.
We will have to adapt to the new scenario and make sure we manage the downside and be prepared to exploit as fully as possible the opportunities that will be presented. We have no choice.
