Thursday, June 21, 2018

Irish broad rate of unemployment at 17% in March 2018

The Irish broad rate of unemployment was at 17% at the end of the first quarter of 2018. The Central Statistics Office (CSO) on Wednesday published the latest Labour Force Survey showing that the seasonally adjusted headline unemployment rate was 5.8% for Q1 2018 and the seasonally adjusted number of persons unemployed decreased by 12,900 to 137,300 (133,000 actual count) — the headline rate is based on employment of at least one hour per week according to an International Labour Organisation definition.

The CSO said that the annual rise of 62,100 (+2.9%) in employment was represented by an increase of 41,300 (+3.5%) in male employment and an increase of 20,900 (+2.1%) in female employment over the year while the number of employees in Q1 2018 was 1,867,500, up 39,900 (+2.2%) over the year. The number of self-employed persons increased by 20,500 (+6.5%) over the year to 338,200.

The number of self-employed with at least one employee grew by 4,200 in the 12-month period.

Broad unemployment rate

Finfacts has been publishing a broad rate of Irish unemployment since the economic bust and in recent times both Eurostat and the European Central Bank (ECB) have been giving attention to what is termed an alternative measure of labour utilisation.

Mario Draghi, ECB president, cited an Irish Central Bank paper on a proposed Non-Employment Index for Ireland, at his Henry Grattan Lecture at Trinity College, Dublin, in September 2017.

The ECB said in its third quarter 2017 Economic Bulletin:

Adjustments to the broader measures to deduct the very longterm unemployed and to allow for the time that the underemployed spend working still result in estimates of labour market slack of the order of 15% across the euro area in the final quarter of 2016 (on a four-quarter moving average basis).

Eurostat data here on underemployed part-time workers and the potential additional workforce.

We add to the official unemployed total of 133,000 1) 114,000 for part-time workers seeking full-time work or longer hours 2) 119,000 — the estimate of the potential additional workforce 3) 59,00 in public “activation programmes” that are publicly funded and participants are classified as employed.

We get an adjusted total unemployed number of 425,000. The denominator is the 2.353m workforce total at end March 2018 according to the CSO plus the 119,000 in the potential additional workforce, giving a total of 2.472m.

This gives us a broad rate of 17%.

Eurostat says the potential additional labour force consists of two subgroups: persons who are available to work but don't seek it, and persons who seek work but are not immediately available to start working.

The CSO almost quadrupled the estimate of the potential labour force following a change in the series in Q3 2017 when the Quarterly National Household Survey was replaced with the Labour Force Survey.

Low employment rate

The employment rate among 15-64 year olds was 68% in March 2018.

The Irish rate compared with OECD data of 80% in Switzerland; 77% New Zealand; 77% Sweden (Q4 2017); 76% the Netherlands; 76% Japan; Germany 76% (Q4 2017; Denmark & UK 75%; US 70%.

There were 23 OECD countries ahead of Ireland.

High NEET rate

The percentage of 18-24 year olds in Ireland who were neither in education, employment or training was 13.7% in 2017, according to Eurostat last week.

The Netherlands was lowest at 5.3%, Italy was highest at 25.4%.