Dole won’t be cut for long-term unemployed – Minister Burton
OECD urges radical plan
Published 26/05/2011 | 05:00
A proposal to cut the dole payments of Ireland’s long-term unemployed is not a runner, according to the Minister for Social Protection, Joan Burton.
The Organisation for Economic Co-operation and Development had suggested that payments be cut in order to encourage the unemployed back to work, but Minister Burton said this morning that reforming the social welfare system and employment training was a better way to get people off the dole.
The Minister said she had already started to implement a system which cut the dole payments of people who over a period of time consistently refused "a reasonable opportunity to go back to work, to look for work, to get themselves involved in a training or work experience".
People on the dole wanted to work, she told Morning Ireland. "Even in this time of high unemployment, the vast majority of people don’t stay on the dole for more than a year. What breaks my heart as minister is to see young men in particular going to the dole office as though t is a lifestyle choice. We should not in a modern economy encourage a situation where a young person in particular ends up staying on the dole for 10 to 20 years".
The Minister warned about the dangers of cutting the pay of more than 200,000 low-paid workers in the hotel and restaurant sectors. Proposals currently being considered by the government would restrict overtime opportunities for these workers and also axe their entitlement to premium payments for Sunday.
"If you were to arbitrarily cut the wages of the lowest paid, they might drift back into the social welfare system", she said.
Unions and employers clashed this morning over the Government proposals to cut wages. John Douglas from the Mandate union said workers would not countenance any reforms that cut the salaries of low paid workers.
Speaking on RTE's Today With Pat Kenny radio programme, Mr Douglas said cutting wages would drive thousands of people into poverty and force them back into the social welfare system "where the tax payer would have to pick up the bill”.
Brendan McGinty from the employers group IBEC described the system of premium payments for Sunday work as "antiquated. We live in a modern age where commerce and life is conducted pretty much as a 24/7 world.”
He said many restaurant owners no longer opened on Sundays because of the cost of the premium payment, which was 34pc higher than in the UK.
The Government should cut the dole for the long-term unemployed to encourage them to go back to work, the leading global economic thinktank warned yesterday.
Ireland is one of the few countries not to reduce unemployment benefits when people fail to find employment, the Organisation for Economic Cooperation and Development (OECD) said.
In a wide-ranging attack on the Government's employment schemes, it warned that unemployment benefit and jobseekers' allowances here -- as well as the likes of rent relief -- were disincentives to finding work.
We have the third highest unemployment rate among the OECD countries. And half of the 440,000 getting employment benefits here are classified as long-term jobless.
Those who have not worked for a year are paid jobseeker's allowance of €188 a week which is means tested. But they do not have their payments reduced as time goes on.
OECD official Patrick Lenain said "best practice" was for benefits to be reduced over time.
He was speaking at the Foundation for Fiscal Studies in Dublin just hours after Public Reform Minister Brendan Howlin told the same conference that employment was the Government's top priority.
Mr Lenain was highly critical of the Government's jobs' plans. He said the State was continuing to train unemployed men in trades which had little future -- such as construction.
Training should instead be targeted at skills such as online sales, marketing, and energy reduction, he added.
He said people who couldn't find work should consider moving to a different town or city.
He claimed the Government should stop subsidising apprenticeships in the construction sector and start training people to sell online.
He also pointed out that the unemployment rate among men aged between 25 and 34 was running at 23pc, while the figure for women in the same age group was just 10pc.
The OECD's recommendations come just weeks after the Economic and Social Research Institute made similar criticisms about FAS and other employment schemes. Mr Lenain singled out FAS for criticism, saying it was "not doing enough to improve the probability of a return to work".
He said just over 300,000 were unemployed according to the authoritative Quarterly National Household Survey which asked people to classify their own status. A much larger number, 440,000, are on the live register and collecting state money every week.
Forecasting that unemployment will stay at around 14.6pc next year, Mr Lenain said Ireland had seen the largest increase in inactivity in any country in the OECD since 2007.
The call for a reduction in dole payments was dismissed as "preposterous" by Fr Sean Healy of Social Justice Ireland.
Fr Healy said more people would be driven into poverty if welfare payments were cut.
The OECD said yesterday that work was "the best protection against poverty".
The reduction of dole payments for people who refused to take up work placements was supported by Education Minister Ruairi Quinn today who said it "shouldn't make sense and doesn't make sense for people to be better off by not working than by working".
He told Newstalk's Lunchtime show that while people "had the right to work and should be able to work", they should also "take up work when that work is available and not be resting on social welfare". The social welfare system was not designed as an "alternative lifestyle", he said.