Business Irish

Friday 15 December 2017

State policies ravaging a private sector that is blighted by one-in-four job losses

The unemployment rate has risen to 12.8pc, typified by this queue at a dole office in Cork city
The unemployment rate has risen to 12.8pc, typified by this queue at a dole office in Cork city

Felim O'Rourke

A dramatic collapse in full-time employment in the private sector has been disguised by increases in the numbers in part-time employment, increases in public sector employment and emigration.

The private sector of the Irish economy, particularly Irish-owned businesses, has been under enormous pressure for the past three years. This is resulting in the collapse of firms on an unprecedented scale and continuous job losses.

In summary, since this economic collapse started in autumn 2007, total employment has fallen by 13.6pc and the rate of unemployment has risen to 12.8pc. These statistics, however, disguise the level of the jobs crisis because full-time private sector employment has fallen by more than 24pc, or one in four.

One in four

A loss of one-in-four full-time private sector jobs can only be described as an economic disaster but this figure is consistent with the decline in GNP figures for the same period and the increase in unemployment measured by the live register.

The Government and policy-makers do not seem to understand the scale of the job losses in the private sector as they are focusing on statistics that hide the real situation.

The most widely quoted statistic about unemployment in Ireland is the live register, based on the number of persons signing on for certain welfare benefits.

Most of the persons are signing on for Jobseeker's Benefit or Jobseeker's Assistance but there are also people applying for other benefits.

In July, there were 466,000 people on the live register, of whom 440,000 (94pc) were seeking either Jobseeker's Benefit or Assistance. The other 6pc were seeking to preserve social welfare entitlements.

The live register is not regarded as a measure of unemployment. The official measure of unemployment is based on the Quarterly National Household Survey (QNHS), carried out four times a year and based on interviews covering almost 40,000 households.

The most recently published official unemployment figure is 275,000 for the first quarter of 2010 -- and a 12.8pc unemployment rate.

The jobless rate was 4.6pc in the third quarter of 2007 so the rate of unemployment has risen by 8.2 percentage points over this period.

These figures do not give a full picture of what has been happening in the Irish economy for the past three years -- especially regarding losses in full-time private sector jobs over the last three years.

Total employment peaked in autumn 2007 at 2,150,000. However, the most recent figures show total employment of 1,858,000 -- a decline of 292,000, or 13.6pc, over this period.

Part-time private employment rose by 27,000, and total employment in the public sector rose by 28,000. These increases in part-time and public sector employment are disguising the large decline in private sector full-time employment.

The CSO has analysed the commercial sectors for me and given a breakdown for each by employment status, whether full-time or part-time. The public administration, education and health sectors are taken in this analysis to be the public sector. All the other sectors are taken to comprise the private sector.

Private sector full-time employment fell from 1,417,000 in autumn 2007 to 1,078,000 in spring 2010. This is a fall of 24pc. The drop is continuing and employment may be down 27pc by now.

The sector with the greatest decline in full-time jobs was construction, with a drop of 57pc. Administrative and support services declined by 34pc; agriculture, forestry and fishing by 29pc; industry by 24pc, and wholesaling and retailing declined by 18pc.

The only private sector that showed an increase in full-time employment was information and communications, where employment grew by 9pc.

Devastating collapse

Over the same period, national income (GNP) at current market prices fell 28pc, as the numbers on the live register increased by 306,000.

I do not believe that either the Government or the 'elite' in Ireland has any understanding of how devastating the economic collapse is in the private sector. They seem isolated from the devastation caused by a 28pc fall in the output of the Irish economy and a loss of one in four full-time private jobs.

The Government, in apparent ignorance of the scale of the disaster, is pursuing economic and financial policies that will continue to devastate the private sector and will export an entire generation of our young people.

Irish Independent

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