Budget 2020 an opportunity to consolidate employment gains

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Ireland’s headline employment trends over the last number of years have been broadly positive. Unemployment was at 5.4 per cent in April 2019, dipping below 6 per cent for the first time in ten years, and 2018 saw a net increase in jobs of approximately 50,500. Total employment in Ireland was 2,281,300 at the end of 2018 and is now at its the highest level ever. Employment numbers have been a major “good news story” in Ireland’s economic recovery and Budget 2020 is an opportunity to take steps to ensure these positive trends continue.

• Unemployment continues to fall in Ireland.
• The long-term unemployment rate fell from 9.7 per cent in 2012 to 2.1 per cent at the end of 2018.
• Long-term unemployment accounts for 36 per cent of total unemployment, having been steadily above half of all unemployment for most of the preceding decade.

But there is still room for improvement. For example, though Ireland has surpassed its previous peak in employment numbers, this is in the context of a much lower participation rate. The participation rate for the country as a whole is 62 per cent, compared with 67.4 per cent in Q3 2007, which was the previous peak of Ireland’s employment performance.

Also requiring attention is a relatively high instance of under-employment, where people are working part-time hours but would take full-time work if it were available. There were an estimated 108,000 under-employed people at the end of 2018, representing 23.5% of all those in part-time employment. This is down from 32.9% in 2011, but is higher than the 20.1% recorded at the end of 2008 and compares poorly with our international peers, as our 4.8% under-employment rate puts Ireland 6th highest out of the 28 European Union countries. Under-employment implies that thousands may be struggling financially as they are unable to work as much as they would like or need. It also implies under-usage of resources. These under-employed people could be added to the estimated 108,300 'potential additional labour force' noted in the CSO’s Labour Force Survey to increase true unemployment numbers by almost 170%.

In advance of Budget 2020, Social Justice Ireland has proposed a number of jobs-boosting measures, including:

• A rural jobs package (see page 10 of our Budget Choices 2020 document, here) and increased infrastructure investment in healthcare, caring work, and housing over the coming years (see pages 8 and 11 of our Budget Choices 2020 document, here).
• Expanded higher education funding, including for apprenticeships  (see page 12 of our Budget Choices 2020 document, here), which will help prepare the Irish labour force to fill the employment needs of coming years, including in the construction sector.
• Investment in meeting Ireland’s climate and sustainability-related targets (see page 14 of our Budget Choices 2020 document, here) including a retrofitting programme, Community Energy Advisors, and a Circular Economy package.

Government should also introduce a living wage for all civil service and public sector workers at an estimated cost of €55m in Budget 2020. In general there is a clear need in Ireland to move the National Minimum Wage (NMW) in the direction of the living wage, which stood at €11.90 per hour in June 2019. Recent budgets have confirmed welcome increases in the NMW, but the rate (€9.80 per hour) remains significantly below that necessary for a single adult to achieve a socially acceptable standard of living working a 39 hour week.