New government should target long-term and youth unemployment

THE issue of long-term and youth unemployment is among the most pressing challenges facing the new Government.

It hasn’t featured much in the campaign, but it is there, embedded in homes and communities, across the country. If the new Government does not prioritise this new issue, it will act as a major drag, on any prospective major recovery and on the stabilisation of the public finances. It will further increase inequalities within our society.

Ireland has moved, in less than four years, from a ‘full employment’ economy to one challenged by extensive ‘scarring’ — the technical term applied to the multiple negative effects of an extended period of unemployment. Long-term unemployment scars careers and it scars lives.

Political parties have, for the most part, subsumed long-term unemployment under the general heading of ‘unemployment’. The assumption appears to be that once ‘we’ (whoever ‘we’ is) get the economy moving, this will automatically resolve the problems. It won’t. This is borne out from the overwhelming evidence of research from other countries and from the very nature of the problem itself.

Being unemployed for 12 months or more is not at all the same thing as being out of work for four periods of three months. It’s wholly different. A process of demotivation and ‘de-skilling’ occurs, infecting every aspect of the individual’s life and health; there capabilities and, also, their relationships. Long-term unemployment impacts on the health, including mental health, of individuals. It impacts on families and the well- being of children and their capacity to strive to use their God-given talents. It diminishes the returns on investment by individuals, and the Exchequer, in secondary and third-level education.

The numbers convey some idea of the scale of the problem — but not, of course, its stark reality. There are currently 150,000 individuals (ILO definition) who have been out of work for 12 months or more. The long-term unemployment rate which was 1.7% in 2008 has risen to 6.5%. To put it this way, 47% of those signing on the Live Register are classified as ‘long-term unemployed’.

We already have a chronic dependency on welfare within communities where neither parents nor children have ever had the experience of the intrinsic value of work and, more specifically, paid employment. It is neither right, nor can we afford as a country, to further exacerbate this culture of dependency by failing to address the massive escalation in long-term and youth unemployment with the urgency it requires.

A recovery of the economy will reabsorb some of those who have not emigrated, or disengaged from the labour force and who have retained their skills and resilience. But tens of thousands of those classified as long-term unemployed will not be so fortunate. They will be joined by thousands more, as we progress further down the cul de sac, of the existing misconceived and counterproductive EU/ IMF adjustment programme.

A unilateral repudiation of Ireland’s responsibilities to bank bondholders is not an option. In any event, ‘haircuts’ have already been negotiated in certain instances. But the issue of whether, or not, the present EU /IMF programme is tenable is a very different issue: as presently structured, it could force a sovereign default on Ireland, with catastrophic consequences for long-term unemployment and our capacity to recover.

The issue here is not shuffling around ‘cuts’ within the present regime: It is the regime itself that is the problem; the interest rates, and an escalating debt burden, the timeframe and the lack of regard for growth policies leading to job creation, especially in renewable energy where Ireland has a national comparative advantage.

Manifesto commitments to provide ‘training’ and additional ‘apprenticeship’ place are important. But the matter of funding hasn’t been addressed.

They begin with support for the family. It is the family which is both the nursery of stability which provides the kind of skills needed to cope with the trauma of unemployment and is also the ‘ultimate safety blanket’ for those who have lost their jobs.

Early ‘interventions’ at second-level are imperative in order to mitigate the problems of youth unemployment. This means ensuring that no young adult leaves second-level without a minimum set of capabilities and qualifications.

Initiatives are needed which link carefully monitored job seeking with credible, customised and carefully monitored programmes, aimed at instilling the values of work as well as a ‘road map’ into the work place. There is an enormous role for voluntary bodies who can provide motivational and vocational support to those who are in long-term unemployment.

Private firms providing accredited education programmes should be eligible for special tax credits. The retention of jobs should be the over-riding priority within the present phase of the crisis and those councils which deliver the highest quality service to businesses-upon who their own capacity to provide services depends-should be rewarded. Over and above such initiatives there is a great deal we can learn from programmes adopted already in operation in other EU countries.

It all comes back to the infinite value of the human person and to the affront to their dignity of being semi-detached from the world of work, including the possibilities of using their skills and capabilities to help re-build an economy in a society shattered by its failure to engrain these values in its policies and mind set.

* Professor Ray Kinsella is on the Faculty of the UCD Graduate School of Business.