Policy Briefing on Work, Unemployment and Job Creation 2004

January 28th, 2004: CORI Justice Commission publishes new briefing document on Work, Unemployment and Job Creation

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Ireland is a very different place to what it was ten years ago. There has been a huge increase in the number of jobs in the economy and a very substantial reduction in the level of unemployment. But these developments have produced new challenges to be tackled and raise new questions that must now be addressed if we are to see sustainable development in this area in the years ahead.

We welcome the positive developments and fully acknowledge their impact in improving the living situation for a great many people (p.2).
New problems are emerging however such as :

Long-term unemployment is rising (p.3).
So too is youth unemployment (p.3). For the period May to August 2003, of the 17,500 additional unemployed 15,000 or 86 per cent of the increase was among those aged less than 25.
Only 40 per cent of people with disabilities are in employment (108,600 out of a total of 271,000 people with disabilities aged between 15 and 64 p.5).
Almost one in every five households living in poverty is headed by a person with a job (p.5).
Many migrant workers find themselves in a situation that Mary Robinson described as “frighteningly resembling bonded servitude” (p.5)
Asylum seekers are barred from taking up employment and then blamed for costing the State money (p.6).
The work of carers, for the most part, goes unrecognised and unrewarded (p.6).
The Community Employment (CE) saga continues and is not being resolved (p.4).

All of which provides Irish society in general and the Government in particular with a new set of challenges and some new questions to be addressed.

The most profound of these new questions concerns assumptions underpinning the culture and policy making in this area. One such assumption concerns the priority given to paid employment over other forms of work.

Most people recognise that a person can work very hard even though he or she does not have a conventional job. Much of the work done in the community and in the voluntary sector fits under this heading. So too does much of the work done in the home. CORI Justice Commission’s support for the introduction of a basic income system comes, in part, from a belief that all work should be recognised and supported (p.6).

Government wants to increase the labour force participation of Irish adults. At the same time it wants families to care for their members. There is some way to go before these two elements of Government policy can be reconciled.

Likewise there are many new challenges to be addressed for those who have jobs and for those who seek them before we can say Ireland is on a sustainable development path.

Unemployment in Ireland Today

At the outset it is important to outline what the term “unemployment” means. The Quarterly National Household Survey (QNHS) unemployment data uses the definition of “unemployment” supplied by the International Labour Office (ILO). It lists as unemployed only those people who, in the week before the survey, were unemployed and available to take up a job and had taken specific steps in the preceding four weeks to find employment.

ny person who was employed for at least one hour is classed as employed. By contrast, the live register includes part-time employees (those who work up to three days a week), seasonal and casual employees entitled to Unemployment Assistance or Benefit.

As chart 1 shows, the period from 1993 was one of continual decline in unemployment. During early 2001 Irish unemployment reached its lowest level at 3.7 per cent of the labour force. Since then the slowdown in the international and domestic economy has brought about increases in the rates.

By August 2001 unemployment, as measured by the QNHS (ILO basis), stood at a rate of 4.3 per cent (79,500 people). A year later, in August 2002, it had increased by 7,200 people, giving an unemployment rate of 4.6 per cent. The corresponding figure for August 2003 showed a further increase in those unemployed of 12,200, bringing the unemployment rate to 5.2 per cent or 98,900 people.

Chart 1: The Numbers of Unemployed and Long-Term Unemployed in Ireland, 1991-2003.

Source: CSO, QNHS December 2003:17

Of the 98,900 people classified as unemployed in 2003, 59,300 were men and 39,600 were women. The corresponding unemployment rates for men and women are 5.3 per cent and 4.9 per cent respectively. Overall some 83,200 of the unemployed are recorded as searching for full-time work, while 15,700 are seeking part-time employment. The latter group is primarily comprised of unemployed females (11,400 women).

The issue of unemployment remains a challenge and is likely to be more problematic in the year ahead. In the recent Budget, the Minister for Finance predicted an increase in the unemployment rate to 5 per cent of the labour force in 2004.

In actual terms these increases imply that during 2004 the numbers unemployed will increase to a total in excess of 100,000 people.

Job Creation: a major achievement of recent years

One of the major achievements of recent years has been the increase in employment and the reduction in unemployment, especially long-term unemployment.

In 1991, there were 1,156,000 people employed in Ireland. Today that figure has increased by more than six hundred thousand to 1,820,800. Overall, the Irish labour force has expanded significantly and today equals 1,919,700 people, over half a million more than in 1991 (see table 1).
Over the same period, the number of people unemployed has gone from 198,500 to 98,900. In the intervening years, the number unemployed had exceeded 220,000 (in 1993).

This transformation is remarkable and has marked a major, and very welcome, shift in Irish society. However, it has also provided new challenges as well as raising new questions which are addressed throughout this policy briefing.

Table 1: Labour Force And Employment Figures for Ireland, 1991-200
Year	Labour Force	Employment
1991	1,354,000	1,156,000
1995	1,459,000	1,282,000
2000	1,816,000	1,738,000
2003	1,920,000	1,821,00

Work and the NAPS Review 2002

The National Anti Poverty Strategy Review (NAPS) 2002 set the following three key targets:

to eliminate long-term unemployment as soon as circumstances permit but in any event not later than 2007
to reduce the level of unemployment experienced by vulnerable groups towards the national average by 2007
to achieve the objectives set out in the National Employment Action Plan to increase employment rates.

CORI Justice Commission welcomed the target to eliminate long-term unemployment and we urge government to make every effort to ensure that this target is achieved no later than 2007. Consequently it is of concern that the numbers classified as long-term unemployed increased so significantly in the last year (see below).

To date, little progress has being made towards achieving this target and therefore the question arises whether the government has abandoned it?

We also welcomed the commitment to reduce the level of unemployment experienced by vulnerable groups towards the national average.

However, specific targets and indicators are required to ensure that this target is met. To date progress on establishing these has been limited.

Further progress is overdue and necessary.

Long-Term Unemployment is Increasing

Alongside the decline in the overall unemployment numbers chart 1 on page 2 shows that since 1994 the numbers classified as long-term unemployed have decreased. Long-term unemployment is defined by the ILO as being unemployed and looking for work for more than one year.

During 2002, the downward trend in long-term unemployment was reversed and the number of people in this category has started to increase.

During 2002, the downward trend in long-term unemployment was reversed

Of the 98,900 people unemployed in August 2003, 71,700 were unemployed for less than one year, while 26,700 were long-term unemployed. This figure marked a substantial increase of almost 5,000 individuals in long-term unemployment since 2002. However, the 2003 long-term unemployment rate of 1.4 per cent is considerably smaller than the 10.4 per cent recorded in 1988 and marks a major decrease in the level of structural unemployment.

That decrease also illustrates the extent to which Irish unemployment levels are now dominated by frictional factors. However, the return of cyclical unemployment in late 2001, and throughout both 2002 and 2003, underscores the necessity to maintain a focus on ensuring that the long-term unemployment problem is not allowed to return.

Youth Unemployment: a growing problem

An examination of the age structure of people who are unemployed indicates a growing problem of youth unemployment.

This is particularly of concern among those aged 15-19 and 20-24. Over the last year their unemployment rates have increased from 12.8 per cent to 14.3 per cent and 7.6 per cent to 8.7 per cent respectively.

In the context of an overall unemployment rate of 5.2 per cent these figures are of concern. Furthermore, the rate of increase in unemployment among this group remains a major issue.

In the third-quarter of 2003, 86% of the 17,500 extra unemployed were aged less than 25 CSO, QNHS page2

Commenting on the most recent unemployment figures the Central Statistics Office pointed out that for the quarter May to August 2003, of the 17,500 additional unemployed 15,000, or 86 per cent, of the increase was among those aged less than 25.

Given the projections for further increases in unemployment, the fate of any low-skilled young people who have become unemployed is a concern. Depending on the extent of the economic slowdown, the potential for these individuals to become long-term unemployed must be monitored. Furthermore, government must invest more in addressing this youth unemployment problem.

Community Employment Saga Continues

There are a range of issues concerning the Community Employment (CE) and related programmes that Government has consistently failed to address. These continue to cause major problems for groups, organisations and individuals as well as for the delivery of a wide range of services at local level. It is useful to recap how this situation has developed.

The Programme for Prosperity and Fairness (PPF) national agreement guaranteed that the number of CE places would not go below 28,000 before 2003. The Government’s decision in April 2002 to reduce the number of places available on the CE programme was a breach of that agreement. The impact of those cuts was to reduce the number of places to 25,000.

Further reductions were announced in Budget 2003 and these were implemented. The cumulative impact of cuts during 2002 and 2003 was a reduction of 10,800 places by the end of 2003 (5,800 in 2002 and 5,000 in 2003). This reduced the overall number of CE places to 20,000 by the end of 2003.

The cuts announced in Budget 2003 ring-fenced those projects focusing on childcare, drugs and healthcare, as well as those in particular geographic areas (RAPID areas, etc.). Consequently the main impact of the cuts was that projects in other areas were very severely hit as all the places being eliminated came from these areas. In many cases the services these projects delivered were totally eliminated. CE projects located in rural areas were especially vulnerable in this context.

These developments showed an extremely short-sighted and irresponsible approach to local communities where these projects were located and to those who are among the most vulnerable in our society. In particular, no provision was made to ensure that services such as meals-on-wheels, which were being delivered by community and voluntary organisations using CE funding, would be resourced once the CE projects had been eliminated.

These developments were combined with an attempt to wind up the Job Initiative (JI) programme. This programme was aimed at the most vulnerable people (i.e. over 35 years of age, over five years unemployed). People understood, when they signed on for this programme, that they would be continuing in their positions if they did not get a job in the market economy. That was the understanding when the programme was designed originally. Now it appears that all (or most) of these JI places may be terminated and added to the places on CE. This, in effect, would see a corresponding number of places being added to the Active Labour Market Programme (ALMP) places available but it would substantially reduce or eliminate the places available to those needing supported employment.

Government has set itself a target of eliminating long-term unemployment. If the JI programme is eliminated or substantially reduced and there are no positions available for the most vulnerable i.e. those not likely to benefit from an ALMP, then these people will return to the ranks of the long-term unemployed. Government's present actions suggest it is giving up on achieving its target which has been included in NAPS, the EAP and the NAPincl .

Another negative development during this period has been the failure to deliver the Social Economy programme as was agreed in the PPF programme. In terms of scale and of how it is actually being delivered, it leaves a great deal to be desired. A good idea, which had been very carefully researched and was well supported is being let fall by the wayside.

Budget 2004 maintained the status quo. Decisions on how exactly Government intends to proceed are still awaited.

Overall, this is a particularly negative series of developments and can only be seen as an insult to local communities who are losing services and to unemployed people who are making substantial efforts to be part of the labour force. We seriously question the wisdom of reducing the allocation to active labour market support programmes at a time of rising unemployment and growing public concern at developments in this area.

Community Employment—the way forward: a proposal

The CORI Justice Commission believes that there is a need to reform Community Employment so that it can better meet the various needs which it currently addresses. This would best be undertaken by separating out what is currently provided by CE and associated initiatives into 3 strands, as follows:

An active labour market programme (ALMP) providing experience and training to people seeking employment in the labour market.
A specific programme to finance the services being provided to local communities by the community and voluntary sector. These services should not be forced to depend on financing being made available only if long-term unemployed people are recruited by the project.
A programme that provides “supported” employment for a number of people who would not benefit from places on an ALMP.

As the overall number of places on CE and JI have been reduced it is essential that government act to ensure that all three areas listed above are adequately addressed. The current Programme for Government acknowledges that CE projects provide support for unemployed people but it also acknowledges that these projects provide essential support for services being provided in local communities by the community and voluntary sector.

Government needs to address the second part of its own statement.

Major changes along the lines indicated above are needed to protect local communities and unemployed people.

Poverty and Employment: the ‘working poor’

Government ministers have constantly repeated the mantra that a job is the solution to poverty. Most recently, the Minister for Finance in Budget 2004 criticised those he said “fail to see that job creation is the appropriate goal if we are to achieve real social inclusion”.

However, this position is a misreading of reality. While those who get jobs that pay good wages will move out of relative income poverty immediately, the situation is very different for many who are in low-paid jobs.

Many have benefited from the rapid rise in the number of jobs available. However, it is important to realise that having a job is not, of itself, a guarantee that one lives in a poverty-free household. The most recent ESRI poverty figures for 2001 show that 18.8 per cent of all those households in poverty are headed by an employee.

This is a remarkable statistic. Action is urgently required to address this problem. CORI Justice Commission has pointed out that the most effective mechanism within the present system would be to make tax credits refundable. Implementing this reform would significantly address the problem of the ‘working poor’. The Government is committed in its Programme for Government to use the potential of the tax credit system to effectively target changes. It should do so immediately.

The scale of the ‘working poor’ problem, combined with the fact that in 2001 59.7 per cent of those households in poverty are headed by a person outside the labour force (ill/disabled, retired or on home duties) underscores the message that jobs are not the solution to poverty.

The old mantra no longer applies in the majority of cases. Consequently, CORI Justice Commission believes that adequate social welfare payments are also essential if poverty is to be addressed in any meaningful way.

Work and People with Disabilities

The results of the 2002 Quarterly National Household Survey module on disability revealed that of all persons in Ireland aged between 15 and 64, ten per cent indicated that they had a longstanding health problem or disability (CSO, 2002). This equates to 271,000 people in Ireland, of whom 142,700 were male and 128,300 were female.

Of those individuals only 40 per cent (108,600) were in employment. This is a figure considerably below the participation rate of the overall population in 2002 which stood at 65 per cent. Furthermore, of those employed approximately one-quarter worked part-time while the remaining three-quarters were in full-time employment. This low rate of employment among people with a disability is of concern.

Apart from restricting their participation in society it also ties them into state dependent low-income situations. Therefore it is not surprising that Ireland’s poverty figures reveal that households headed by a person who is ill or has a disability account for almost 12 per cent of all those living in poverty.

CORI Justice Commission believes that further effort should be made to reduce the impediments faced by people with a disability in achieving employment. In particular consideration should be given to reforming the current situation where such people face losing their benefits, in particular their medical card, when they take up employment. This situation ignores the additional costs faced by people with a disability in pursuing their day-to-day lives.

For many people with disabilities the opportunity to work is denied to them and they are trapped in unemployment, poverty or both.

Migrant Workers

The current work-permit system faced by migrant workers in Ireland is of concern, particularly for those migrants working in low-paid service and manufacturing jobs. This system ties the worker to a specific employer and as a consequence makes them entirely dependent on that employer for their income and right to residency in the state.

Speaking at a conference organised by the Immigration Council of Ireland in December 2003 the former UN High Commissioner for Human Rights Mary Robinson described this work-permit system as one which “frighteningly resembles bonded servitude”.

A recent report on migrant workers underscores the difficulty faced by them and the exclusion many of them experience. Entitled Migrant Workers and their Experiences the report was conducted by Dr Pauline Conroy and Aoife Brennan. Its suggested reforms include: review the current work-permit system, support systems enhanced, inform workers of their rights and introduce initiatives to assist low-skilled migrant workers.

In the light of these findings CORI Justice Commission believes that government must implement a rights-based immigration policy which addresses the unnecessary and undesirable restrictions this system imposes on migrant workers and their families. Furthermore, we believe that the UN Convention on the Protection of Rights of All Migrant Workers and their Families should be ratified by the government.

The Need to Recognise All Work

A major question being raised by the current labour-market situation concerns assumptions underpinning culture and policy making in this area. One such assumption concerns the priority given to paid employment over other forms of work.

The need to recognise voluntary work has been acknowledged in the government’s White Paper, Supporting Voluntary Activity and by the Taoiseach who has stated that: “voluntary activity forms the very core of all vibrant and inclusive societies”.

The recent report of the National Committee on Volunteering entitled Tipping the Balance (October 2002) stands as a welcome acknowledgement of this role. The report was prepared, with the help of Government, to mark the UN International Year of the Volunteer 2001 by representatives of numerous voluntary organisations in Ireland, including CORI’s Justice Commission.

CORI Justice Commission’s support for the introduction of a basic income
system comes, in part, from a belief that all work should be recognised and supported

The Committee divided its work into two parts firstly, promoting activities to celebrate and promote volunteering during 2001 and secondly, studying trends in volunteering and what is needed for the support and recognition of volunteers. The report reflects these two aspects with one part giving ‘snapshots’ of activities funded by the committee and the second giving a reflective report on the state of volunteering in Ireland. The report also contained a series of recommendations to assist in the future development and recognition of voluntary activity throughout Ireland.

In the light of the commitment to ‘promote social capital’ in the Programme for Government (2002). CORI Justice Commission is hopeful that the recommendations of this report will be implemented by government.

Work and Asylum Seekers

Asylum-seekers are among the most excluded and marginalised in Ireland, yet they are treated in a very unjust way by Irish society. The more than 5,000 asylum-seekers in “direct provision” receive accommodation and board, together with a mere €19.10 per week per adult and €9.55 per child.

CORI Justice Commission remains very disappointed that the government rejected the proposal to recognise the right to work of asylum seekers. We along with others advocated that where government fails to meet its own stated objective of processing asylum applications in six months the right to work should be automatically granted to asylum seekers.

Detaining people for an unnecessarily prolonged period in such an excluded and dependent state is completely unacceptable. Recognising asylum seekers right to work would alleviate poverty and social exclusion among one of Ireland’s most vulnerable groups.

These reforms should be part of a more comprehensive move by Ireland to create a multi-racial, inclusive society. Another positive step in this area would be for government to implement the UN Convention on the Elimination of All Forms of Racial Discrimination (CERD).

The Work of Carers

The work of Ireland’s carers receives minimal recognition in spite of the essential role their work plays in society.

ccording to the Carers Association people caring full-time for the elderly and disabled are saving the state approximately €2 billion a year in costs which it would otherwise have to bear. The Caring for Carers organisation (2003) have stated that 78 per cent of the nations carers were caring for frail older people and that almost half of the nations full-time carers were themselves aged over 60. Furthermore, they reported that 21 per cent of carers had more than one dependent.

CORI Justice Commission welcomes the additional allocations for carers provided in Budget 2004. We also welcome the decision by the Oireachtas Joint Committee on Social and Family Affairs to examine this issue. It is crucial that policy reforms be introduced to reduce the financial and emotional pressures on carers. These should focus on addressing the poverty experienced by many carers and their families and should increase the provision of respite care for carers and those for whom they care. In that context, the twenty-four hour responsibilities of carers contrasts with the recent improvements in employment legislation setting limits on working-hours.

Main Policy Recommendations on Work

CORE POLICY OBJECTIVE

To ensure that all people have access to meaningful work

Develop employment-friendly income-tax policies which ensure that no unemployment traps exist. Policies should ease the transition from unemployment to employment.
Place an ongoing emphasis on preparing and enabling unemployed people to access market-place jobs. Such an emphasis would involve
- increased numbers of places providing quality education and training, re-training and up-skilling
- expanded opportunities for unemployed people to gain work-place experience
- adequate numbers of places on programmes such as Community Employment
Reverse the decision in Budget 2003 to restrict the back-to-work allowance to those who are three years or more unemployed. These programmes should be available to the unemployed after one year.
Maintain a sufficient number of active labour-market programme (ALMP) places available to those who are long-term unemployed.
When ALMPs are mainstreamed, particularly in disadvantaged areas, ensure that sufficient resources are made available to maintain the services that were provided.
Increase the education/training grants for participants on Community Employment, Job Initiative and Rate for the Job programmes, and seek accreditation for all education/training and all work done by participants in these programmes.
Substantially overhaul the Social Economy programme. This step is required because the programme is not addressing many of the issues for which it was originally proposed and developed.
Ensure that there is real and effective monitoring and evaluation of each of the high-supports processes at local and national level.
Provide adequate funding to ensure that all those in need of high-supports can access the process.
Seek at all times to ensure that new jobs have reasonable pay rates.
Adopt policies to address the worrying trend of rising youth unemployment. In particular, these should include education initiatives and retraining schemes.
Honour the NAPS commitment “to eliminate long-term unemployment as soon as circumstances permit but in any event not later than 2007”. Given the recent increases in long-term unemployment the government’s commitment to this target is under question.
Adopt policies to address the obstacles facing women when they return to the labour force. These should focus on care initiatives, employment flexibility and the provision of information and training.
Reduce the impediments faced by people with disabilities in achieving employment. In particular address the current situation where many of them face losing their benefits when they take up employment.
Implement a rights-based immigration policy which addresses the unnecessary and undesirable restrictions the current work permit system imposes on migrant workers and their families.
Ratify the UN Convention on the Protection of Rights of All Migrant Workers and their Families and as a consequence set a precedent for all other European countries to follow.
Recognise the right to work of all asylum seekers whose application for asylum is at least six months old (and who are not allowed to take up employment).
Develop a programme providing a “one face, one place” service for refugees and asylum seekers, which would promote the integration of these groups into the labour market.
Recognise work that is not paid employment. Everybody has a right to work, i.e. to contribute to his or her own development and that of the community and the wider society. This, however, should not be confined to job creation. Work and a job are not the same thing.
Implement the recommendations of the NESC report entitled Labour Market Issues for Older Workers (2003). When implemented these policies will facilitate older people in accessing and retaining employment.
Give greater recognition to the work carried out by carers in Ireland. and introduce policy reforms to reduce the financial and emotional pressures on carers.
Develop a specific programme to finance the services being provided to local communities by the community and voluntary sector. These services should not be forced to depend on financing being made available only if long-term unemployed people are recruited by the project.
Increase grants to community and voluntary organisations providing services, to reflect national agreements, especially in the area of wages.
Conduct an annual survey to discover the value of all unpaid work in the country (including community and voluntary work and work in the home). Publish the results of this survey as soon as they become available.
Sustaining Progress contains a commitment to supporting volunteering and unpaid work. We urge that this framework be developed and adequately resourced without delay.
Develop a programme to recognise and reward work other than paid employment.
Accept and implement the recommendations contained in the report of the National Committee on Volunteering, Tipping the Balance.

Women Returning to Employment

The growth in employment over the last few years has particularly impacted on women. Rates of female labour-force participation continue to rise. Noticeably, many of these female entrants are women returning after caring for children.

A report published in September 2002 entitled Getting out of the House: Women Returning to Employment, Education and Training presented some important findings concerning the situation of these women.

The report, by Russell et al of the ESRI, found that almost two-thirds of these women returning tended to have low levels of education, some 38 per cent had no qualifications at all. It also showed that 71 per cent of returnees chose to work part time and that overall the level of payment received by these women was below that which they had received before they left the labour force. These women tend to be “downgrading” their expectations of employment with almost 50 per cent of women stating that they possessed the qualifications and skill to perform a more demanding job than that which they had returned to do.

While there should always be adequate support for women choosing to stay in the home
there should also be adequate support for women choosing to return to the labour force.

The report suggests that this phenomenon is due to a series of obstacles which returning women face. These include a lack of childcare facilities, in particular after-school childcare, and a lack of flexibility among employers towards the lifestyle demands of these women. A further problem is the lack of information detailing the availability of re-training programmes and entitlements for these women.

Policy innovations are required if this situation is to change. It is clear that opportunities exist for these women and that with some changes these can be made available. To achieve this CORI Justice Commission believes that additional support is necessary to expand the projects currently funded by the Equality for Women Measure. Reforms to childcare facilities and information processes are equally necessary. In that regard the recent OECD Employment Outlook (2003) suggested that the countries needed to provide, or assist in providing, childcare facilities as an essential element in removing those barriers preventing women from returning to the workplace.