I have written many times over the past couple of years that the success or failure of the current Government should, in my view, be judged by the number of people at work in the economy come the next general election.
If more people are at work that would qualify as success, and if less people are at work that would qualify as failure. The magnitude of the increase or decline would obviously determine the magnitude of the success or failure.
From a social and economic perspective, a vibrant labour market is a real positive and can create a real virtuous cycle in any economy. Employment empowers people, creates a sense of well-being and self-confidence that is very important for anybody, and is the only way that those struggling under the burden of debt can possibly get out of the awful situation.
The good news for the Government is that in the final quarter of 2012, employment in the economy was 1,200 higher than a year earlier. This was the first annual increase in employment since 2008. During the quarter, employment rose by 6,500 on a seasonally adjusted basis. On the same day as the employment numbers were released in the Quarterly National Household Survey, the CSO unveiled the monthly live register figures for February.
The live register is not designed to measure unemployment, as it includes part-time workers and seasonal and casual workers who are entitled to jobseeker’s benefit or allowance. But it is still a meaningful reflection of the health of the labour market.
In the year to February, the number of people signing on the live register was 10,546 lower than Feb 2012. The sceptics would argue, with some justification, that much of this decline may just be due to emigration, but one cannot argue with the number of people actually at work in the economy.
In the year to the final quarter, employment in agriculture, forestry and f&ishing increased by 9,700; the wholesale and r&etail trade saw a rise of 2,900; the ICT sector saw an increase of 5,500; professional, scientific and t&echnical activity employment increased by 6,000; and education and health employment saw a combined increase of 3,700.
On the negative side, industrial employment fell by 7,300; construction employment fell by a further 4,600 to just 103,200; and there was a fall of 1,600 in the financial services sector.
All in all it is a mixed bag, and while the annual increase is meagre, it is still reassuring to see further concrete signs that the labour market is stabilising.
In the face of the deep shock that hit the economy in 2008, private sector employers moved quickly to cut costs through a combination of job shedding and wage cuts in an effort to stay in business. Many of these that managed to stay in business have now reached a stage where they cannot realistically cut employment any further without undermining the ability to do business and provide customer service.
Hence, it is not surprising that we are starting to see a stabilisation of the overall labour market, but the hope and the challenge for the Government will be to ensure that the modest improvement in employment turns into something more meaningful over the next few years.
Despite the unpopularity that the Government is garnering due to ongoing austerity, Croke Park II, and the failure to burn bondholders, a meaningful recovery in employment levels over the next couple of years could work wonders in the opinion polls.
There is clearly a long way to go to recreate a functioning labour market but for hard-pressed businesses, addressing issues such as commercial rates, rents, and credit is essential.
1,200 jobs do not a summer make!
© Irish Examiner Ltd. All rights reserved