Dole passes 400,000 for first time ever

THE number of people on the dole has passed 400,000 for the first time and now accounts for one in five of the working population.

According to figures from the Central Statistics Office (CSO), the number on the live register in May 2009 was 402,100. That is 13,500 more than last month and almost double the 207,000 figure for May 2008.

The monthly increase was made up of 8,800 men and 4,700 women.

The live register does not measure unemployment as it includes part-time (those who work up to three days a week), seasonal and casual workers entitled to jobseekers’ benefit or allowance. However, these account for just 66,000 of the total.

Economists were polls apart in their response to the figures. Lynsey Clemenger, of Ulster Bank, said in terms of economic newsflow, this has been a “somewhat more promising week”.

“The rate of contraction in both the manufacturing and services sectors slowed further... and the exchequer figures coming in were better than expected.

“The latest live register data have reinforced impressions of a less negative picture for the Irish economy.

“The 13,500 increase in numbers claiming unemployment benefit in May represented the lowest rise in any month since September 2008. This is also a significant improvement on the average rise of almost 24,000 in the year to April, albeit that it remains above the average rise of just over 10,000 in 2008. In percentage terms, the monthly rate of increase fell for the fourth consecutive month, to 3.5%, the slowest pace of increase since this time last year.”

If the monthly rise in May continued, the number of claimants would reach almost 500,000 by the end of the year, she said.

“However, this scenario may prove too optimistic, and we expect to see the number claiming unemployment benefit surpassing the 500,000 mark by the end of the year.”

In contrast, Alan McQuaid of Bloxhams was far more pessimistic. “These latest figures confirm the worsening labour market trend of recent months.

“While this may have started out as a building industry problem, it has now spread like wildfire across other sectors of the economy. Apart from the sharp fall in construction employment, manufacturing, retail, transport, tourism and financial services are starting to feel the pinch too.

“The bottom line is that current labour market conditions are extremely weak. Figures released earlier this week by the Department of Enterprise, Trade and Employment showed a staggering rise in redundancies notified of 226.6% in May compared with the same month last year. It is difficult to be anything but pessimistic regarding the jobs outlook in the short-term.

“The role of social partnership was to moderate pay increases during the boom years, however it failed to do so… As a result, the relative cost of labour is now above the levels prevailing in the EU and substantially higher than the rates in the new EU accession states.

“Wage deflation is the key to preventing further job losses and improving the overall competitiveness of the Irish economy, and with CPI deflation set to average close to 5% this year the scope is certainly there.”