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Emmet Oliver: Labour has always flown towards work opportunities

Countries like to tightly control their economies and their labour markets, taking in labour when they need it and pulling down the shutters when they don't. But the problem is, the real world doesn't work like that.

Companies have altogether more unpredictable needs and labour will always flow towards countries where opportunities are most plentiful, regardless of government restrictions.

In that context the latest figures on the number of non-EU workers gaining work permits will not surprise economists, but they may surprise the rest of us.

They show that 6,621 permits have now been issued to workers from a range of countries outside the European economic area, in the year to the end of September.

This is way down on the number of permits issued at the tail end of the Celtic Tiger, but surprisingly it is up on this time last year.

For many the bigger surprise is that companies still need to fill any jobs from outside Europe at a time when the unemployment rate, seasonally adjusted, stands at 13.7pc.

Clearly some of the roles simply have to be filled from outside Europe, because of the language skills involved. Also traditionally hospitals and the HSE have recruited workers from outside the EU, but the sheer spread of roles being filled by overseas workers will surprise.

For example, Department of Enterprise data shows guesthouses, leisure centres, restaurants, bars, farms and pharmacies are being given permits to bring in additional staff from outside Ireland and Europe. Even though restrictions on recruiting low paid overseas workers have been introduced, this does not seem to have reduced the numbers radically, although refusals are rising and the department is clearly being more selective.

If the numbers are starting to rise again (when compared with last year) one has to ask the question why employers still yearn for staff from overseas? There are several potential explanations.

One can be found in the recent history of the Irish labour market. Irish people have been leaving low paid jobs in their droves, with overseas workers taking their place. It will take time, several years potentially, before this pattern is reversed.

Social welfare rates in Ireland are comparatively high in European terms and there is a chance that low paid jobs are not attractive enough to entice those on the live register. This is known as the "welfare trap'' and certainly employer's groups, like IBEC, believe this is a core feature of the Irish economy at this point.

Others disagree and believe employers are reaching for the panacea of foreign workers so they can keep wages down and get more productivity from eager, newly arrived staff. This is also a possible explanation and, to its credit, the Government is attempting to curb any exploitation of foreign workers, though clearly more needs to be done.

In reality, the lingering popularity of the foreign worker option is down to all of the reasons above, not just one. For example, when contacted yesterday recruitment consultants told the Irish Independent they were not surprised at the numbers of foreign workers going into healthcare and medicine, two highly specialised areas.

But there was surprise at the number of overseas permits being sought for businesses like bars, restaurants, guesthouses and nursing homes.

Paul O'Donnell, of Hays the recruitment company, said multinationals often needed specific language skills not even available in the EU. For example, Hebrew and Arabic are in heavy demand by multinational employers. Equally, some ethnic restaurants can argue they need staff that fit with the theme and ethos of the venue.

But these two requirements do not explain the overall figures. This is because the rules are very blunt. The employer taking on the overseas worker must have "made every effort to recruit an Irish or European Economic Areas national for the post''.

This means that employers have a labour pool amounting to more than 500 million people to choose from. In that context one does wonder just how hard the employers really have to look before making a permit application.

It is notable that hotels, restaurants and guesthouses are among the most common recruiters of overseas labour when looking through the permit trends. These sectors are hurting badly economically and, along with retail and construction, represent the toughest industries to earn a living in these days.

The hotel industry, for example, is suffering from dangerous levels of overcapacity that even NAMA is grappling to deal with.

Staff wages along with interest payments are the biggest cost headings for most hotels. Many in the industry want the minimum wage to be watered down and there is little doubt that a reliance on foreign labour, whatever its precise size, is present in the hotel industry.

Of course dark xenophobicforces could construct a spurious argument on the back of the numbers of overseas workers being imported into the Irish economy. But they would be entirely wrong. Far from displacing Irish workers, the trends suggest that Irish people are simply not prepared to perform essential economic roles and foreign workers are plugging the gap, whatever the government rules are.

There is also, to most people's surprise, extensive skills gaps in Ireland. For example, various green economy roles cannot be filled in Ireland due to a lack of the right staff.

As mentioned earlier, Ireland's comparatively poor level of foreign languages is also a factor. This is of no consolation to the almost 450,000 people currently chasing work, however.

But as often happens in a recession there is a huge mis-match between the skills on offer in the labour market and the actual skills needed by leading edge employers, many of whom can fish for workers outside the narrow pool of the Irish labour market.


Irish Independent