Unemployment ‘likely to get worse’

A LEADING economist has warned the high unemployment rate is likely to get worse before it gets better, as the latest figures show yet another large increase in the number of people claiming the dole.

The seasonal adjusted total on the live register now stands at 448,600, 3,700 more than in November 2010 and 1,700 more than last month. The unemployment rate now stands at 14.5% — 0.1% higher than last month.

An analysis of the live register figures shows the number of female dole claimants has increased by 8,267 to 153,041 over the last year while the number of male claimants has decreased by 3,702 to 276,526.

Of the total on the register, 58.1% have been claiming dole in the short term. That compares to 64.6% in November last year. There is yet another annual rise in the number of long-term claimants, which have increased by 19.7%.

Alan McQuaid, chief economist with Bloxhams, said the number of long-term unemployed remains a cause for concern.

“In its most recent quarterly report on Ireland the team of European Commission/ECB/IMF inspectors said the long-term unemployment figures needed “considerable attention”,” he said. “The OECD also expressed worry when highlighting the issue in its latest economic review of Ireland.”

Mr McQuaid said the latest overall live register figures were disappointing to say the least.

“The government is well aware that there is no easy fix to the unemployment problem, and things are unlikely to improve on the jobs front until the economy starts to grow again on a sustained basis,” he said. “And with the global economy slowing down, the labour market is expected to remain under pressure for some time to come, with things likely to get worse before they get better, putting yet more strain on the country’s public finances.”

ISME said that the Government should use the upcoming budget to stimulate jobs growth.

The representative organisation for small and medium sized enterprises said “it would make sense” for the Government to immediately introduce pro-enterprise polices, which would assist businesses to retain employment and to create jobs.

“Proposals such as VAT hikes, sick pay schemes, motor tax and excise duty increases will have the opposite effect and will only encourage enterprises to cut back further and shed jobs,” said ISME chief executive Mark Fielding.

“The upcoming budget provides the opportunity to introduce a coherent business stimulus package that will provide companies with the incentives to employ more. Essentially what we need is to reduce employers’ PRSI and address other cost issues including rates, rents, energy and transport, instead of continuously adding to business costs and undermining competitiveness.”