Covid-19 jobs crisis could be 'long-lasting' as CSO issues employment survey                  

Covid-19 jobs crisis could be 'long-lasting' as CSO issues employment survey                  
People making their way to the Social Welfare Office on Hanover Street, Cork. File picture Dan Linehan

The Covid-19 crisis will be long-lasting and require focused Government policies over many years as new figures showed the extent of the devastating fallout for employment, economists have said.

The CSO figures showed employment in the second quarter fell in seven of the 14 parts of the economy, with the sharpest declines seen in the jobs-intensive accommodation and food services sector.

Its quarterly Labour Force Survey confirm that unemployment stood at over 23.1% in June under an adjusted measurement that takes into account people in receipt of the pandemic unemployment payment, or PUP. Unemployment was at 5.1% when prepared for international reporting purposes that exclude support measures taken by governments around the world during the pandemic crisis.

Figures released in recent weeks show that the 23.1% unemployment rate had fallen to a still-elevated level of 16.7% in July, as parts of the economy opened up.

The latest survey showed there were as many as 531,412 people unemployed or only 118,700 unemployed at the end of June, depending on the criteria. The Labour Force Survey is only the latest to point to the extent of the jobs crisis.

There were 230,400 people last week relying on pandemic unemployment payments and a further 370,000 people whose wages were supported by the existing wage-subsidy scheme, according to official figures.

Economist Jim Power said the sharp declines in employment in accommodation, retail, and construction jobs in the quarter showed the “devastating” effects on specific sectors. Construction jobs have rebounded as more sites reopened but the future of accommodation and food-service jobs was “still very difficult”, he said.

Economist Jim Power.
Economist Jim Power.

The pandemic unemployment and wage-supports are due to extend through to next spring and the numbers of young people who could fall into long term unemployment will be a pressing issue by then, Mr Power said.

“After all this, we will need a major policy approach to address inequalities and it is essential skills are upgraded and a huge focus is required on apprenticeships ‘to professionalise’ low-paid service sector jobs,” he said.

KBC Bank chief economist Austin Hughes said the CSO survey showed “the substantial” impact of the crisis on jobs, while it was unclear how many of the people on the crisis schemes will be in a job next year.

“It is important to get the policy responses right to ensure what is a drastic short term impact does not end up scarring the economy long term,” he said.

Policies will require specific measures for hard-hit sectors before the October budget to ensure they are up and running before Christmas, he added. 

The Nevin Economic Research Institute said the survey showed young workers were being affected the hardest during the Covid crisis “as they were in the aftermath of the financial crisis of 2008”.

“A strong relationship between age group and changes in participation and unemployment is evident in the data,” Neri said.

Dermot O'Leary, chief economist at Goodbody, said that Ireland faced “big labour market challenges”.

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