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Sunday 19 November 2017

Middle classes feel the squeeze on jobs

Charlie Weston and Ann-Marie Walsh

THE massive burden being shouldered by the country's middle classes was exposed yesterday by stark new figures.

They showed a surge in mortgage arrears, a jump in job losses among the professional classes and a continuing weakness in retail sales.

And there is the prospect of more government cutbacks to come, after spending reductions yesterday dominated the first cabinet meeting since the start of the summer.

The raft of shocking figures showed how the recession was exacting a high price from middle-income earners who are in their 30s and 40s, with young children and large mortgages.

The figures showed unemployment has surged to 455,000, with a 27pc rise in joblessness among the professional classes.

Almost 36,500 mortgage holders are now three months or more behind on their repayments, figures from the Financial Regulator showed.

Three-quarters of those in arrears have not paid their mortgage for six months or longer.

The bad news on employment and mortgages comes as the Cabinet renews its efforts to agree new expenditure cuts of ¿3bn.

Another 2,500 people signed on last month, pushing the numbers on the dole to a new record of 455,000.

The latest increase puts an extra ¿50m strain on the public purse because of lost taxes and additional social welfare payments.

And the new official figures reveal the middle classes are joining the dole queues in droves.

The number of professionals signing on rose more sharply than any other group of workers to 31,322 last month -- a 27pc hike since February.

A breakdown showed that women accounted for around 70pc of the increase in August.

The overall unemployment rate crept up from 13.7pc in July to 13.8pc.

Enterprise Minister Batt O'Keeffe said the unemployment figures were frustrating.


"They're disappointing. That's the first thing. They're the highest ever; and come September, those figures will be reduced dramatically.

"There will be quite a significant reduction. We're expecting anything from 6,000 to 10,000 of a reduction in the September figures because of people going back to education.

"I think it had a dramatic effect -- about 10,000 people -- when they left college in June, so there will be a significant downturn," Mr O'Keeffe said in Galway.

There has been a sharp rise in the number of families unable to repay their mortgages, in a sign that the mortgage crisis is worsening.

Financial experts said the figures showed thousands of households were now stuck in a financial quagmire.

The number of those in arrears is up almost 60pc in the past nine months.

This is because the latest figures take no account of mortgage rate rises pushed through by six different lenders in the past few weeks.

Some of the hikes in standard variable and fixed rates only took effect from yesterday.

The Government came under fire from business groups and opposition parties last night after the figures showed dole numbers swelling.

But Finance Minister Brian Lenihan said Exchequer returns to be published today would indicate that the public finances had stabilised.

Mr Lenihan said the assessment was that we had economic growth this year and this could be seen in many respects.

He said he recognised that the country had difficulties, but said it was important that we looked at the positive assets that we had.

"We can surmount those difficulties, and we have opportunities and it is important we realise them," Mr Lenihan said.

However, the Labour Party said the burden on the public finances soared by "an incredible" ¿6.25bn since the Fianna Fail and Green Party Government was formed, as 313,000 joined the dole queues.

It is estimated that the Exchequer loses around ¿20,000 for each unemployed worker in lost taxes and social welfare payments.

The Labour Party's enterprise spokesman, Willie Penrose, said the figures were more bad news in a week where Anglo revealed unprecedented losses.

He added that the Government's new 'work-for-dole' scheme would only deal with the tip of the iceberg.

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