Despite falling rates of unemployment and almost 47,000 jobs (net) being created in the year to end Q1 2016, the Jobs Gap stood at 166,200 at the end of March, and overall the economy was 193,100 jobs short of its peak performance in 2007. The "Jobs Gap” is the number of jobs that must be created in order to return to the peak employment levels of 2007, while adjusting for changes in the make-up of the labour force. It is a realistic indicator of the number of jobs required to meet demand, accounting for things like migration and demographic trends.
These are some of the main findings from the first issue of Social Justice Ireland's quarterly 'Employment Monitor'.
Using the "Jobs Gap measure", and assuming that the economy can continue to create an average of 3,900 jobs per month – the average monthly rate of job creation over the year to end Q1 2016, and an optimistic assumption, given current international developments including the UK's impending exit from the European Union – the economy is projected to return to pre-recession employment levels by October 2019. This is This is approximately 12 years since the downturn in employment began, and serves to illustrate how far we are from where we need to be.
In order to generate the number of jobs needed to meet demand, we believe support for a substantial and sustained investment programme is required. Ireland’s level of public investment is the 2nd lowest in the European Union as a percentage of GDP; it is next to impossible to meet macroeconomic goals like full employment, not to mention infrastructural maintenance or social goals like adequate housing, healthcare, education services, or even rural broadband, without adequate public investment.
Any such programme should contain a focus on reducing long-term unemployment. We have not seen long-term unemployment on the current scale for almost two decades A policy focus on economic growth and job creation alone lacks the nuances required to deal with what has been one of the most pressing needs within the labour market for some time now. Focusing on reducing headline numbers does little to assist those in long-term difficulty and most of the measures introduced in Ireland in recent years to help the unemployed are targeted at those who are “job-ready” or in a position to get back to work once jobs are available.
Long-term unemployment is having a disproportionate effect on older people, and unemployed older workers are more than twice as likely to become long-term unemployed than they were pre-recession. This highlights the added difficulty for older people in finding new employment if they lose their job, and identifies a key policy issue which requires more urgent focus than it has been getting. There are many harmful effects of long-term unemployment, both social and economic, and it’s time to start properly resourcing support for the long-term unemployed.
Overall, we believe that there’s still ample room for targeted policy interventions to hasten the recovery. Positive trends in jobs growth are welcome, but the rate of job creation could, and should, be improved by concentrated efforts from policy makers.