Jobs need to come from sectors other than health and education
Further substantial improvements to competitiveness are required, writes Colm McCarthy
AS Europe's glacial response to the banking and debt crisis unfolds, the punishing impact which the financial debacle is having on the Irish labour market needs to be kept firmly in view.
While total employment in the economy is no longer collapsing, the decline has been unprecedented. In the last four years, total employment has fallen by just over 300,000, or almost 15 per cent. Even though the working-age population has risen, the labour supply has fallen because some people have withdrawn from the labour market altogether.
Just 60.4 per cent of adults were in the labour force at the end of the second quarter, versus almost 64 per cent four years earlier. The unemployment rate has soared from 4.8 per cent to 14.2 per cent in this short period. The percentage of adults (those aged 15 and over) in employment has fallen from 61 per cent in the second quarter of 2007 to just 52 per cent four years later. When the employment dependency ratio falls so rapidly, those still in employment should not be surprised at increases in tax burdens.