Jobs strategy has some flaws, but there are some hopeful signs

THE Government is right to declare job creation its main ambition. Unemployment is the major economic and social curse blighting this country.

Jobs strategy has some flaws, but there are some hopeful signs

It is the biggest single cause of emigration and has undermined the living standards of hundreds of thousands of families. That, in turn, has caused much emotional hardship.

Taoiseach Enda Kenny said this week that 2014 would be the “year for jobs”. It is a handy sound-bite, but what does it really mean? “Everything that can be done to accelerate the labour market will be done,” he said at the launch of a “framework” document. Finance Minister Michael Noonan boasted of “50 pages of detail,” and said “It’s not one of these PR marketing economic policies that we got used to in the past.”

Yet the critics say that it is scant on details if full of ambition. The Government expects the economy to grow strongly and all of the 330,000 jobs that were lost since the crisis restored.

It is a powerful and welcome aspiration but there are legitimate fears that the job creation targets will not be met, either because of a lack of proper planning and implementation of measures domestically or because foreign countries will not demand sufficient goods or services from our employers. You can put all of the plans in place but companies will not hire staff if there are not sufficient buyers of what they offer.

In addition, many of those old jobs were in the construction sector because of the building bubble. All of those jobs will not be regained. The jobs will have to be in productive services or manufacturing with a focus on exporting. That might create employment for a new generation of educated young people but what about those who have lost their jobs, particularly aged 40 and above? There is a real fear that a significant segment of the long-term unemployed, especially if they have hit middle age or older, will not get a fair share of the new jobs being created.

How do you persuade someone to give you a job if you have been out of work for a number of years, if you are of an age where there are younger people, seemingly with more energy, if not necessarily more wisdom, who are available with up-to-date educational qualifications and a willingness to work for less money?

In recent days I’ve had the opportunity to speak to some of the long-term unemployed and, in one case, a spouse who worries as to whether her 41-year-old husband will ever get a full-time job again, having spent the last six years without full time work. Niamh Geraghty, who is married to Darren, with whom she has three children, got in touch with my radio programme recently, upset by comments a contributor had made about the so-called “sponger culture” among people who allegedly have no desire to work but who want to soak the State for free benefits. While there may be some people to whom this description suits it is most likely to be suited to a small minority and it is deeply unfair to stereotype others in this way. She believes that to force people to do community service or other such tasks would be demeaning and unfair, as some have been suggesting.

Niamh outlined the circumstances in which her husband had been let go six years ago when his employer, the Smurfit Kappa group, shut a printing factory.

He then went to work for a small family-owned printer that shut a year later. Since then he has gone on the Jobbridge work experience scheme, and signed up for various educational courses, including a degree now, Meanwhile Niamh runs a very small business from home, baking and selling cakes, which is hardly the approach of a family sponging the system. There are many such stories.

Kenny initial target was to create 100,000 extra jobs by 2015. In late 2011 Kenny promised to get 177,000 long term unemployed back to work by the end of his Government’s term in office. This may be achieved, which would be great news. Support has come from the Economic and Social Research Institute which said this week that Ireland is on course to create 60,000 new jobs this year. Kenny now wants to bring unemployment falling from the present 13.5% to 8% within six years. The projections are that unemployment will fall to 12.4% in 2014 and continue consistently downwards to 8.1% in 2020. If things go really well then unemployment just might drop below 10% in 2017 and end up at 5.9% — effectively “full employment” — in 2020.

Getting people into jobs pushes all the right buttons, both economically and socially. Workers pay taxes. Even lowly paid ones outside of the tax net spend money that is partially captured by Vat. Even better, once they are in paid employment they claim far less from the social welfare budget. That’s a win-win in anyone’s book.

The Government is not itself in the position to create too many jobs. So its role is to provide a stable environment in which companies are not afraid to incur the costs of hiring and, where appropriate and possible, to provide financial supports to those potential employers. The latter is a trickier proposition. If that is not possible the Government can at least minimise any harm it might cause by reducing any financial burden it imposes on businesses, again when appropriate.

It is also the Government’s responsibility to assist its citizens in receiving the best possible education and training to give them a chance to prosper if offered employment. The reasoning behind this is as much social as economic. Most unemployed people want to work. They want not to just to earn a fair wage but to have something worthwhile to do.

Earlier this year Kenny promised to eliminate “unemployment DNA” running through some households. “We want to engage with people who want to work, who are willing to work, who don’t want to sit on the couch,” he said in launching Pathways to Work 2013, This was designed to give more places on employment and training schemes, to offer more attractive recruitment incentives for employers and what was called “more interplay” between welfare payments, tax and in-work payments with the intention of reducing so-called welfare traps.

The latest plan includes plans to make credit easier to access for small- and medium-sized business, making Ireland “a world leader in the provision of a diverse and innovative suite of financial products to SMEs”. How many times have we heard that before? It stated that its priority in the short to medium term is to grow employment levels “through further improvements in competitiveness”. Giving the wages have fallen it should be suggested that any further improvements should come about through a reduction in the price of state services and demands.

The worrying thing is that the strategy document gives very few details and its final section, which is devoted to policy actions, merely gives an indicative timetable for the announcement of new measures. That said, jobs are being created. Let’s hope there are many more of them and for men and women of all ages and educational qualifications.

* The Last Word with Matt Cooper is broadcast on 100-102 Today FM, Monday to Friday, 4.30pm to 7pm.

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