Coalition is failing to stem our job crisis

THE mounting litany of job losses makes for bleak reading, especially as it is all too apparent that there is worse to come.

For the next few years the jobs market will get worse, with manufacturing, construction and the traditional sectors going through a tough time, according to the latest forecast by ESRI, the economic think-tank which predicts rising unemployment, with workers having to learn new skills and follow jobs around the country.

This grim reality was borne in on the people of Waterford city and Dungarvan yesterday as the flagship Waterford Crystal group announced 234 redundancies. Workers will derive little solace from Tánaiste Mary Harney's by now familiar mantra that employment will actually rise by Christmas.

Her assertion will bring little consolation to those about to lose their jobs or the 1,600-strong workforce facing a pay freeze as the company seeks savings of €15 million.

Ms Harney's message will also bring cold comfort to 170 staff becoming redundant when the Volex manufacturing plant in Castlebar, Co Mayo, shuts down.

Just as people were unimpressed by her advice to shop around for value in Ireland's rip-off economy (painfully reminiscent of Marie Antoinette's ill-timed admonition that the starving French should eat cake) Ms Harney's soothing words will ring hollow for the 135 Guinness employees being let go in the Republic and the North, or the 90 workers losing their jobs in the Dublin-based US group Software Spectrum, not to mention the 179 people being laid off by Tayto crisps.

Mindful of the danger of talking ourselves into a recession, there is, nonetheless, little point in denying that falling competitiveness is a major factor as more companies move to the cheap labour economies in Eastern Europe and Asia, where workers earn a third less than their counterparts in Mayo or Dublin.

Citing Waterford Crystal's experience, chief executive John Foley said the group could source nearly 50% of product at up to 30% less than they could produce it at their plants in Waterford city or Dungarvan. Another problem is the lack of growth globally, resulting in contraction of Ireland's traditional consumer markets.

Not only are old industries suffering, newer technologies of the hi-tech era are also retrenching or packing their bags and going elsewhere. In this gloomy scenario, Ms Harney should resist the temptation to give her customary response to plant closures and job losses otherwise, the whole country will be one big task force.

While the global downturn is hitting Ireland, the Coalition has contributed to the economic troubles. On top of stealth taxes, household bills are rising with increases in the cost of electricity, transport, insurance, food, drink, and other basic commodities.

In a palpable political hit, Fine Gael leader Enda Kenny has observed the crisis could be measured by the fact that 200 more people had joined the dole queue for each day the Dáil sat this year.

Equally damning is the forecast by small business group ISME that 35,000 jobs will be lost this year and 100,000 more could be under threat over the next five years unless there is an improvement in competitiveness.

The Government should heed ESRI advice to ring-fence the existing money in the State pension scheme and divert 1% of GDP into direct spending on roads and other infrastructure in order to avoid borrowing. That might help Ireland outride the storm and create a foundation where industry could be more competitive in the future.