Workers ‘left behind’ in recovery

Ireland’s rapid economic growth is leaving workers far behind, while rising employment is still not impacting on those out of work for more than two years, according to figures from Eurostat.

The country will have the fastest GDP growth in the EU this year — slated to be even higher than China’s — but this is not being reflected in pay.

Irish productivity showed the second highest increase among the 28 member states, second only to Romania, but the indications so far are that this is not translating into better income for the workforce.

The figures are in the quarterly employment and social situation review just released by Eurostat that show that EU economies are continuing to recover from the crisis, but slowly.

GDP grew 0.4% in the EU from April to July this year, which was well below that of about 2% recorded in Ireland.

At the same time, real unit labour costs fell the most in Ireland — down by 8% while productivity increased 3.7%, the highest after Romania. Pay per worker increased by just 0.2%, the fourth lowest among the 28 member states.

The Irish figures are affected by exports to non-euro areas at a time when the value of the euro has decreased, together with the growth in the economy and modest inflation.

On the jobs front, Ireland was one of the countries where employment increased most rapidly at 3%, but the country has one of the biggest share of long-term unemployed in the union.

This is the result of the recession and which, with the working poor problem, has not been adequately addressed by the policy makers, said Seán Healy of Social Justice Ireland who added that it was having a hugely negative impact on people’s wellbeing.

And while the numbers out of work have been falling, more than half continue to be long-term unemployed with those under 25 and over 55 finding it particularly difficult to find work.

The experience of the 1980s show that persistent long-term unemployment is a dangerous phenomenon with long-lasting implications, he said.

“The key problem is that those seeking jobs far outnumber the jobs available”, he said, adding that the other challenge was the working poor.

“Earnings below the living wage suggest employees are forced to do without certain essentials so they can make ends meet,” he said.

Employment Commissioner Marianne Thyssen said she was particularly aware of the difficulties for long-term unemployed and for those aged over 55.

More than seven million have been unemployed for more than two years and the slight drop in the number at the beginning of the year was the first in seven years.

There were other encouraging signs also including a bigger increase in full-time jobs over part-time, though the number of full-time contracts was just double the increase in temporary jobs.

Youth unemployment is falling slowly but still accounts for about 20% of those without work while the improvement for older workers was better.