Business Irish

Saturday 20 September 2014

Hidden problem of under-employment finally beingtackled

Published 15/04/2014 | 02:30

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man working in office
man working in office

THE year 2013 brought good news on the employment front with more than 60,000 jobs created here.

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And there's more positive data expected. The Central Bank has hailed the improved labour market as one of the most encouraging aspects of Ireland's economic performance last year.

The numbers at work increased by 2.4pc, with the rate of job creation accelerating as the year progressed. Employment is expected to rise by 2.6pc this year, it said in its latest quarterly bulletin.

But there remains a hidden problem – under-employment. And it has been persistent in Ireland and across most European countries, although there are signs here of a gradual improvement.

Under-employment includes not only the unemployed, but also those who are forced to take part-time work because they can't get anything better with longer hours.

Europe's statistical agency Eurostat revealed there were 147,000 people classed as underemployed in Ireland last year, reflecting about a third of the amount of people in part-time work.

In the three years since 2010, the numbers have risen by 38,000.

Indeed, under-employment in the part-time sphere has grown by almost a third between the second quarter of 2009 and the same time last year.

Tom Healy of the Nevin Economic Research Institute (NERI) said the trend finally appears to be heading in the right direction.

"You've got a combination of discouraged worker effect, or where people might be unemployed or in short-term hours they almost lose the motivation and interest to keep looking for a full-time job," he said.

"It's particularly prevalent in areas of part-time female employment, where the issue of involuntary part-time hours becomes endemic and it crosses over into a problem that people just stop looking for more hours."

Ireland isn't alone in dealing with this issue.

The Eurostat data shows that the troubled eurozone economies of Greece, Spain, France and Portugal all have high levels of people who want to get full-time work but can't.

Last autumn, the Central Bank set aside a special box within its fourth quarter economic commentary to examine the issue. It said the increased prevalence of underemployment was to be expected given the magnitude of the employment crisis which has hit Ireland.

"Periods of falling employment are generally associated with rising under-employment as people become discouraged about their prospects of finding a full-time position and, as a result, search for part-time work," the bank said.

But the bank also signaled the problem may be on the turn.

It pointed out that a "sizeable" year-on-year decline in the numbers forced to work part time was recorded in the spring of last year "amid tentative signs of recovery" in the labour market.

Irish Independent

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