IRELAND’S unemployment rate has fallen below 10% for the first time since our 2008 economic implosion — a crash which former Central Bank governor John Hurley told the banking inquiry yesterday was not anticipated by the Government, nor was its severity.
Data published by the Central Statistics Office yesterday shows that 12,500 jobs were created in the first three months of the year and that the unemployment rate dropped to 9.9% in the first quarter from 10.4% in the final three months of last year. Unemployment decreased by 45,300, or 17.5%, in the year to March, bringing the total number of people unemployed to 212,800. This is the 11th quarter in succession where unemployment has declined on an annual basis.
These are entirely positive figures and are to be celebrated joyfully and welcomed with considerable relief. It is not so very long ago that such a prospect seemed very remote and almost impossible to imagine.
Even though this is a significant psychological milestone, especially as an election looms ever closer, it must be remembered that more than 200,000 people are still out of work and that only a tiny minority of those are, as Finance Minister Michael Noonan suggested earlier this month, “allergic” to work.
The depth of the recovery is shown by CSO data showing that the rate of long-term unemployment has fallen to 5.9% in the first months of 2015 from 7.3% a year earlier. More full-time jobs are being created than part-time posts.
The positive impact on society and on individuals is overwhelming — more people at work means more people have money to spend and are paying taxes, and fewer people are dependent on the State for social supports.
The news is hugely positive but a challenge may lie buried in those improving statistics — how many of the newly created jobs are the kind of job that pays a decent wage and offers a degree of security that will support people to put down roots and possibly begin a family?
We may not yet be at the point in the cycle where workers need not accept zero-hours contracts and greatly reduced terms and conditions if their State job is privatised and pay rates hovering just above the minimum wage, but if the recovery continues at this pace, that juncture may not be too far away. This, of course, is a double-edged sword — if workers are in a strong bargaining position, then competitiveness may be threatened.
The reopened public sector pay talks may influence this dynamic too, especially around the fraught area of pensions.
There are many contributing factors to this upward curve but one is the fact that we have a reasonably well-educated workforce. This has not been achieved without considerable investment, and record CAO applications suggest that college resources will be even more stretched than they have been heretofore.
If this positive trend is to be sustained, we will have to find new ways of investing in our education system because that is a challenge without an end.
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