2016 jobs rising, but focus must be on quality not quantity

I had previously believed that the health of the labour market would have had a major bearing on the outcome of the February general election, but that belief was naive.

Employment has improved significantly since the low point of 2012, but the outgoing government got no political bounty on the back of that turnaround and, in fact, both parties of government got a massive kick in the teeth.

Obviously, many people have much greater concerns than being able to get a job. Notwithstanding the apparent lack of interest from the electorate, the labour-market story continues to evolve positively.

We got further confirmation, this week, of just how impressively it is performing.

Total employment in the economy, in the first quarter, increased by 15,400 on a seasonally adjusted basis, and was 46,900 higher than the first quarter of last year.

There are now 151,500 more people at work than there were at the bottom of the market, in the first quarter of 2012.

Employment increased in 12 of the 14 sectors of the economy in the first quarter of the year, with construction employment increasing by 9,500, or 7.8%.

This compares to an annual growth rate of 2.4% for the overall labour market.

Indeed, employment in the construction sector has increased by 28,000 since the first quarter of 2012. Construction continues to rebound sharply, from a calamitous collapse back in 2008.

The unemployment rate fell to 8.4% of the labour force in the first quarter, and was estimated at 7.9% in April.

This marks a significant decline from the rate of 15.2% in 2012. An examination of the regional labour market, in the first quarter of the year, perhaps goes a long way to explaining why the outgoing government did not gain any political advantage from the improved employment situation.

While the national, average unemployment rate stood at 8.4% in the first quarter, the regional variation is very stark.

The rate stood at 6.9% in Dublin; 8.6% in the border region; 11.6% in the midland region; 10.2% in the west; 5.9% in the mid-east, and 7.7% in the south-west.

The south-east is top of the pile, at an unacceptably high rate of 12.5%.

These variations, along with lots of other real and anecdotal evidence, show just how big a problem there is with regional economic growth and development.

It has been given priority in the recently published, lengthy, aspirational, Programme for Government.

Employment-creation should be prioritised, as having a job can have a very positive psychological and economic impact.

However, a worrying trend globally is the quality of labour-market development.

For example, the US has a 5% unemployment rate, but much of the employment is low-paid and has little security of tenure.

Here in Ireland, the aggregate statistics look impressive, but there is a question mark over the quality of the employment.

In most parts of the economy, the notion of a job for life is all but gone, apart from the public sector. Many jobs are on a contract basis, as many firms continue to outsource many functions.

Typically, workers on part-time contracts are filling these functions. This, in turn, complicates issues, such as the ability to get a mortgage.

It is also the case that, apart from highly-skilled workers, where demand is exceeding supply, many workers are finding that earnings are flat or, indeed, under pressure. Witness what is happening in Tesco, at the moment.

At this juncture, I do not have a strong evidence base to support these assertions, but, anecdotally, these are the trends I am picking up.

Hence, it is probably not terribly surprising that, despite the impressive growth in employment, many workers are not feeling delirious and those in power are not reaping the political gains that they might have justifiably expected.

We need to conduct much more analysis of the quality — rather than the quantity — of jobs being created.


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