Thomas Molloy: Training still key if Bruton hopes to tackle jobs crisis
ENTERPRISE Minister Rich-ard Bruton faces a formidable task as he lays out his plans to fight unemployment today. He will know that the State has a poor record when it comes to helping the unemployed return to work, and his civil servants will have reminded him that job creation is difficult, even in countries where the public sector traditionally displays energy and resourcefulness.
We can draw many lessons from the boom, but surely one of the most heartening lessons is that Irish people like working. Unemployment tumbled to around 4.2pc once the private sector and the State created jobs -- proving once and for all that unemployment is largely a supply side problem. If the jobs are there, people will fill them.
We know that Mr Bruton will announce the merger of the County Enterprise Boards and the creation of some kind of uber-agency to promote business today, but most of his other plans have yet to be explored in detail.
Expect to see a good deal about encouraging the long-term unemployed back to work. We know this will form a major plank of Mr Bruton's plans because this is what the troika wants.
The International Monetary Fund, the European Central Bank and the European Commission have made it crystal clear in recent months that they are appalled at the laxness within the existing system, which is all carrot and no stick.
They want the unemployed to be regularly summoned for interviews and offered jobs -- with the threat that benefits will be deducted if the offer is refused.
They have a point. Our system displays very little appetite for follow-up interviews. Evidence from other countries shows that unemployed people quickly become despondent and lose confidence in their ability to find jobs. Young unemployed people are particularly prone to despondency because they often do not have particular skills to offer and do not understand the world of work. Employers here routinely report that a shocking number of under-25s do not know how to write a letter properly but this is not a reflection on the unemployed; even simple tasks such as letter-writing are skills picked up in work rather than schools and universities.
The troika also wants to ensure that the benefits system does not discourage the unemployed from working. This is sensible and it must be said that the Irish system is poor in this regard and any improvements that can be made here will be welcome.
It is nevertheless downright mischievous to portray the majority of the country's jobseekers as work-shy. The evidence from just a few years ago when we had full employment, and the high levels of emigration seen in this country show that most people are desperate to work.
So where can the Government help? The simple answer is targeted training to fill vacancies in areas where there are shortages. Employers regularly report shortages in certain parts of the jobs market -- including parts of the technology sector such as the computer games industry, sales and languages like German.
Research by the Economic and Social Research Institute shows that some FAS courses are literally worse than useless -- people taking them actually have less chance of getting a job than a sample group who did not attend any FAS training.
FAS is also not doing enough to address structural unemployment among former construction workers. To do this, FAS will have to change the training courses available -- but FAS is still trying to shoehorn jobseekers into existing courses rather than designing courses around jobseekers.
There is a solution. FAS must be forced to share the task of training with other organisations. This is a trend seen in many other countries where employers bear much of the burden of training. Apprenticeships are now a rarity in most white-collar and blue-collar jobs. This is strange because the system still works well in the fields of law and medicine and used to work well in many other jobs.
We have become used to the notion that the State and universities should provide training that was once provided by employers.
We have also become used to the idea that the State should be responsible for filling jobs and incentivising people to return to work.
The evidence from other countries is that the State should step back from the direct provision of courses and supervise other providers instead. Rather than relying on FAS, Mr Bruton would be wise to take a lead from other governments who have effectively privatised job creation agencies.
The concept is simple enough: private organisations should be rewarded for every unemployed person who gets work and stays in work. The rewards are paid over a 12-month period to ensure people are not pushed into unsuitable jobs. Britain has recently introduced such a system and the signs are that it is working.
There are other methods proven to create jobs such as reducing the minimum wage, but it seems unlikely that this will happen any time soon. This is a tragedy for those hoping to find work but undoubtedly a boon for the low paid, who would suffer if their wages were cut.
While the jobs situation is very grave at present, there are reasons to be optimistic. The calamitous declines of the past few years have tailed off.
Job creation within domestic companies remains weak to non-existent but multinationals have proven resilient. The IDA recently reported its best year in a decade, and we have seen almost 60 new companies set up shop here over the past 12 months, as well as expansion by many household names.
The problem for the Government is that most of these jobs have been created for graduates (where unemployment is currently at around 10pc).
But most of the unemployed are school-leavers with skills that have become rusty during the construction and retail boom. Tough incentives to force people to attend interviews may help here and there but the reality is that Mr Bruton must find ways to turn plumbers into programmers and carpenters into multi-lingual salespeople. There is only one way -- training.
Irish Independent
