Unemployment - Grim figures put premium on optimism

YESTERDAY’S unemployment figures were the second indication in as many days of how terribly grim our circumstances have become.

The by-now instinctive reaction to another round of depressing figures might be to move on quickly to something more cheering but these figures will have an impact in every household and business in the country when the December budget is finally unveiled. They, and their consequences, are unavoidable.

The announcement that more than 8,000 people had to join dole queues last month came 24 hours after it was confirmed that our public finances remain in a parlous state. Tax receipts fell by 5.5% last month compared with July 2009.

Official figures show that 452,500 people claimed benefits last month — up 34,400 on last year. This represents a spectacular number of people; individuals and families whose difficulties are at the heart of so many court cases involving mortgage repayments they can’t sustain.

For families where one or both parents have lost a job, this is a particularly stressful time, especially as the costs attached to our free education system become more apparent. Figures published today, as students begin to think about returning to school, record that it costs parents €1,600 a year to keep a child in primary education, €2,352 in second level and a bewildering €10,338 in third level, for just one year.

For any household dependent on unemployment benefits, this is a terrible challenge. Back to school allowances, no matter how welcome, cannot fill this gap.

At 13.7%, our unemployment rate is one of the highest in the eurozone. Holland’s unemployment rate, the lowest in the EU, stood at 4% in April.

Income tax revenues fell even more sharply, down 9% year-on-year, the largest such drop since February.

These figures combine, unless things change dramatically, to increase the pressure on Finance Minister Brian Lenihan as he prepares a very stiff budget, to be even more demanding.

Though the figures indicate that he may have to be even more ruthless than is expected, his political instincts — or more than likely nervous Fianna Fáil backbenchers trying to save their seats — may challenge him as this will more than likely be the last budget before the next election.

Traditionally a pre-election Fianna Fáil budget has been a thinly disguised giveaway to buy as many votes as is possible. This is not an option even for the remnants of the “if-we-have-it-we’ll-spend-it” visionaries still brave enough to make suggestions.

There has been a concerted effort to prepare us for the worst in December but whether even that groundwork is sufficient for what might lie ahead remains to be seen. And, as a considerable number of people argue passionately, further cuts may delay recovery even further.

Grim times indeed, times that demand resilience and despite everything, determined optimism. Because without a degree of informed optimism, the prospects of recovery are even more remote than they are.