The Government needs to drop the jargon and deliver those jobs

WE have endured two weeks of incessant government propaganda on job creation.

Last week it was the Action Plan for Jobs. This week it’s Pathways to Work. But what is the single most important factor in sustainable employment growth? Profits in business. Without a positive return on capital employed, there won’t be consistent investment or reinvestment. Companies that lose money eventually downsize and shed jobs. Whether it’s an indigenous firm or a multinational giant, the same central credo applies. They are only in business to create shareholder value. Their jobs created are a feature and mere by-product of their battles to win market share and achieve business plan targets. The Government, with its 15 departments and 36 state agencies, has only a cameo role. Politicians won’t acknowledge their eunuch status in this regard. They promise voters jobs in order to garner votes. Fine Gael promised a year ago to create 100,000 new jobs through the Economic Recovery Authority (new ERA). The election sweetener aspired to privatise semi-state companies and reinvest several billions in new public sector enterprises in the areas of Irish Water, renewable energy providers and broadband. Having sold the electorate a pup, ignoring the troika realities, they now are presenting an alternative package to provide an extra 100,000 jobs, bringing the total workforce up to 1.9 million by 2016.

The gobbledygook vocabulary of government jargon is unreal. Try this: “consider and agree prioritisation, based on recommendations ; establish structures; design new hub and& spoke model of engagement; agree and implement new protocols; enact an applied research mandate; undertake a feasibility study to examine structures and policies; complete the review; undertake a review; accelerate the programme of re-evaluation; initiate the preparation; conduct market research and liaise with business representative groups ... ” The mindless drivel is endless.

This amounts to a patchwork quilt of every senior civil servant being asked to pitch in with their tuppence worth of employment-friendly options. It is a box-ticking exercise that is aspirational and esoteric. At best, it comprises a business support package. It doesn’t represent an economic stimulus, investment programme or significant strategic shift in direction. A big-ticket item is absent. Proven government practices in employment generation of the past were capital projects. Every €1 billion invested in the public capital programme resulted in 7,000 direct and indirect jobs. This year’s PCP was cut by a further €1.5bn. The pension assets levy of 0.6% restricts available investment from their €80bn funds. This plan to create jobs is entirely dependent on private sector capital.

Between 1997 and 2007, the Irish labour force expanded by more than half a million workers. Construction activity, economic growth, buoyant consumer and& household spending and tax cuts all primed the pump to boost job levels. None of these factors are currently available here to stimulate increased employment. The only relieving pressure on the Irish labour market is emigration. The live register’s statistics show reductions in persons under 25 years, claiming the jobseekers allowance. This more mobile cohort departed the dole by 8.4% or 6,892 in the one-year period up to this January. This exodus explains why the rate of unemployment reduced from 14.8% to 14.2%, while the CSO reveals a 33,000 decline in the numbers employed in the first three quarters of 2011.

Meanwhile, the problems of the long-term unemployed exacerbate. 183,000 are unemployed for more than a year. They comprise an increasing proportion of the jobless from 36.3% to 41.8% over the past year. This endemic social problem is a recurrence of what happened in the recessionary 1980s. Remedies then were procured on the basis of paying similar public monies to recipients, while facilitating them off of the dole. The Enterprise Allowance Scheme meant entitlement to an equivalent payment for a year while being self-employed. The Back to Work Allowance scheme was payable as employers recruited from the live register. The Employment Incentive Scheme was paid to businesses who added additional workers to their payroll. Social Employment Schemes were initiated for voluntary organisations and community groups to obtain free labour from the ranks of the unemployed. Innovative job sharing templates were created.

Training is a vital area for state policy to positively impact on unemployment. The ESRI has completed a review of the Government’s National Employment Action Plan (operational since 1998). It has been an abysmal failure. You had a 17% worse chance of finding a job with them rather than if you hunted on your own. FÁS, which is being disbanded this year, is most ineffective at job placement — try asking any employer. Massaging jobless numbers into training places is their speciality. The ESRI insists training provision is not related to recruitment opportunities.

Construction courses and apprentice programmes continue to churn out participants with minimal prospects. Legacy structures are based on providers’ needs rather than flexible market requirements.

Even during the first quarter of peak recessionary 2011, 6,000 job vacancies occurred. The hi-tech computer sector can’t fill vacant posts of software engineers, linguists, designers, analysts and programmers. They import these foreign skills, because our education/training systems don’t have proper linkages with industry. Labour market intelligence gathering is ineffective. It’s time to re-focus up-skilling resources towards on-the-job frontline work placement. Early indications are that Job Bridge is a success, with 4,500 graduates likely to be retained after the period of their internship. The Tús work scheme for non-graduates could be extended from community organisations to small enterprises.

THE Government says it wants to promote entrepreneurship. Political leaders assert they will remove barriers to employment. They promise their banking strategy will provide credit to business. Exhortations are made for us to spend more. Sound bites are no substitute for a coherent sustained strategy. Instead in the real world, entrepreneurs flee the jurisdiction to avail of more benign bankruptcy regimes in the US or UK. Surviving bad banks, dedicated to contracting their loan books, are bailed in rather than funding new good banks. Householders are warned to curtail valid expenditure on their kids’ health and education costs in favour of negative equity mortgage repayments. There’s a cynical disconnection between words and actions.

The 270 specific measures and implementation timelines are fine and dandy. But, I’d prefer a deal between Government and Ryanair to ensure 5 million extra inward passengers. Practical measures to secure import substitution would guarantee Irish jobs. Disincentives through free housing, healthcare and education for the unemployed remain, while the low paid are ineligible for similar supports. Transitional administration ensnares job seekers into declining to avail of part time or seasonal temporary work. Even to the troika, this is anomalous. Employment growth and simultaneous economic contraction is contradictory — especially so as the black economy is going gangbusters. Any party who believes we can tax our way out of recession is misguided. Command economies survive only in the archives or totalitarian states, except of course dearest China.