OECD chief doubles IBEC’s five-year forecast on employment recovery

A SENIOR director at the OECD has said that it could take up to 10 years for Ireland’s employment levels to return to normal — contradicting IBEC’s recent forecast of five years.

Speaking at yesterday’sInterTrade Ireland Economic Forum at Dublin Castle, John Martin, director for employment, labour and social affairs at the OECD, said that even with a sustained recovery it is still likely to take seven to 10 years to get the country’s unemployment rate down from 14.5% to around 6%-7%.

“Past history of employment trends in Ireland show that whenever there has been a large jump in unemployment levels, it has taken a long time for those numbers to be reduced; and that was even the case with the economic boom years of the Celtic Tiger,” Mr Martin said.

He said that with respective unemployment rates of 22%, 17% and 14.5% Spain, Greece and Ireland face the biggest jobs challenges in Europe, as firms are less likely to look at the long-term unemployed to fill roles.

He used Finland as a prime example of taking over a decade to reduce double-digit percentage unemployment.

“Improvements depend on an upturn in domestic demand and further strong export-led recovery.

“But a lot will also depend on emigration trends. If emigration speeds up, this will bring down the unemployment rate, but that isn’t the preferable method,” Mr Martin added.

Earlier this week, employers’ representative IBEC said that all of the jobs lost during the recession will be regained over the coming five years.

Mr Martin said that target would be tough to meet as 350,000 jobs have been lost since the recession began and it would need annual job creation of 70,000 jobs every year to 2016 to recover those losses.

Also addressing yesterday’s conference — which took the jobs crisis on both sides of the border as its theme — InterTrade Ireland chairman David Dobbin said: “Developing exports and innovation are two fundamental building blocks that will help deliver economic recovery and new jobs.

“North/South co-operation can help in both these areas and it’s vital that we exploit the opportunities that are open to us.”

Meanwhile, speaking just a day after the publication of the Government’s already criticised ‘Action Plan’ for jobs, the Jobs and Innovation Minister Richard Bruton said the Government is determined to rise to the challenge of creating jobs and economic growth.

Picture: Professor Kevin O’Rourke of Oxford University, Prof Reinhilde Veugelers of Katholieke Universiteit Leuven, and Dr Davis Dobbin, Intertrade Ireland chairman, at the InterTrade Ireland economic forum in Dublin Castle.