Thursday 20 June 2019

David Chance: 'Record numbers in work - but younger men get left behind'

Warning that childcare costs are a barrier to working

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David Chance

A record 2.3 million people are in work thanks to a booming economy that created 35,200 jobs in the first quarter of the year alone, most of them full-time and many of them going to women.

The latest release from the Central Statistics Office showed that the overall unemployment rate was just 4.6pc, the lowest level in 14 years and well below the peak of 16pc of the workforce in 2012.

"Today's figures confirm that the labour market is no longer in a recovery phase and that we are now zeroing in on 'full-employment', as evidenced by the fact that the unemployment rate of 4.6pc is the lowest since end-2005," said Finance Minister Paschal Donohoe.

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But a weaker pace of recovery for younger workers will have a continued impact on the economy as a whole, producing greater levels of inequality and potentially exposing younger workers to less secure forms of employment with poorer job outcomes.

Despite growth in female employment, adding 50,400 jobs in annual terms, many women face barriers to entering the workforce due to childcare costs that are among the highest in the rich world.

"If we are going to make headway in boosting female labour participation, Government must ensure that promised investment in affordable childcare is sustained in the coming months and years ahead," warned Chambers Ireland.

Record or near-record levels of employment are not unique to Ireland, however - Britain has managed the same even with Brexit hanging over the economy. A close to 10-year economic expansion in the United States has pushed unemployment down to levels not seen since the boom years of the 1960s.

If you dig beyond the headline numbers, it is clear years of bumper economic growth have not eradicated the effects of the financial crisis.

Ten thousand fewer men had full-time jobs in the first quarter of this year, at just over 1.1 million, than had them in 2006 and the participation rate of working-age men in the labour force is also lower than it was before the crisis, at 68pc versus 74pc in 2007.

The combined labour force participation rate among men and women here is 62pc.

"What I find particularly interesting is that the participation rate has improved by just one point in six years of strong GDP and employment growth," said Ciarán Nugent, an economist at the Nevin Economic Research Institute.

"Inactivity was already a big problem in an Irish context before the financial crisis."

The data may also indicate the economy is still some way from "full employment" and pressures from a tight labour market may not trigger a surge in inflation or overheating.

The CSO release said that there were an additional 108,000 people who had the potential to be added to the labour force.

In addition there are 107,000 people who are working part time. It said they were underemployed, and could shift to full-time jobs and bolster this number.

Youth unemployment levels have fallen to 13pc and it is way below that experienced in Italy, where a third of young people are without jobs.

But the rate of unemployment among 15-24-year-old men is still almost three times that of the general working-age population, something that has its roots in the crisis years, Mr Nugent said.

"I think a good chunk of the ground left to be recovered in the participation rate is explained by the huge drop in the participation rates for young men from the implosion in construction," he noted.

The Department of Finance is forecasting the economy will add 50,000 jobs this year, of which most will be full-time as the stellar rates of growth of recent years give way to levels of less than 4pc this year and next.

Irish Independent

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