Tuesday, September 04, 2018

Irish jobs top 2007 bubble peak as rural villages in peril

Last week data on jobs in the Irish economy showed that total employment in June 2018 had exceeded the peak property bubble total of 2.252m in September 2007, by almost 3,000 people. Meanwhile, an announcement by An Post, the state postal service, that it proposed closing 159 rural post offices in 25 of the 26 counties, raised fears that many villages would face a slow death. The service said its remaining 960 post offices would benefit from "investment and consolidation."

Last November the Government approved €30m of State funding to protect the future of the postal network. 

Also last week, the Central Statistics Office (CSO) reported that the number of immigrants to the State in the year to April 2018 was estimated to have risen by 6.7% from 84,600 to 90,300 while the number of emigrants fell over the same period, from 64,800 to 56,300 (-13.1%) resulting in net Irish inward migration in 2018 of 34,000 — the highest level of net inward migration since 2008.

The net inward migration by Irish nationals for the first time since 2009 was positive at +100 in 2018 from -3,400 the previous year.  Net inward migration among non-Irish nationals remained strong, increasing from 23,200 in 2017 to 33,900 in 2018.

Irish employment rate still low

There was an annual increase in employment of 3.4% or 74,100 in the year to the second quarter of 2018. The labour force expanded by 58,000 and about 33,500 of the rise was accounted for by foreigners.

In March 2011 when a new Irish government took power after the ousting of the Fianna Fáil-led coalition, 371,800 jobs had been lost in the Irish economy compared with the 2007 peak — a fall of 16.5%. A total of 375,000 jobs have been added since March 2011.

The Irish employment rate in June was 68.5% compared with 79% in Switzerland; 77% in Sweden; 76% in Germany; 75% in the UK and Denmark

The OECD has the employment rate of 15-24 year-olds in Q1 2018 as 39% in Ireland; 76% Iceland; 62% Switzerland; 59% Australia; 57% Denmark; 50% Austria; 51% UK; 47% Germany and 29% France. 

For 55-64 years: Ireland 59%; Iceland 80%; Switzerland 72%; 64% Australia; 69% Denmark; 54% Austria; 65% UK; 71% Germany and 52% France.

What the European Central Bank calls 'labour underutilisation' and I call the broad rate of unemployment, in June 2018 was at 15% compared with the headline rate of 5.8% — Eurostat reported headline rates of 3.4% in Germany in July; 3.8% in the Netherlands; 4% in the UK in May and 5% in Denmark.

In the 12 months to June, the number of part-time workers who wanted full-time work rose 34,000 to 129,000 while the number of people in public activation schemes was almost 50,000 in June (participants are regarded as in employment). 

Latest Eurostat statistics on young people neither in employment nor in education or training (NEET) cover 2017 and for 20-34-year-olds, Ireland's rate was 16% ( (5.8% unemployed and 10.3% inactive) compared with Sweden at 8%; the Netherlands 9% and both Denmark & Germany at 12%. 

In Ireland 16.9% of 30-34-year-olds are either unemployed or inactive!

New research published today by the Economic and Social Research Institute and Pobal, a state agency,  has found that mothers who face high childcare costs work fewer hours. Parents spent an average of 12% of their disposable income on childcare for their three-year-old. This posed a significant barrier to employment for women according to the report, especially lone parents. For those who pay, the average hourly cost of care for one child was €4.50 at the time of the Growing up in Ireland survey in 2011, or €4.84 in 2017 prices.

The report says the financial burden was greatest for lone parents, who spent an average of 16% of their disposable income on childcare and for low-income families, who spent 20% of income on care. The costs are based on one child and so the burden is more severe for families with more than one child in childcare.

The Social Protection Department said last September that the level of household joblessness overall in Ireland — measured in terms of the proportion of households that are jobless (about 18%) or of the proportion of the adult population that is resident in such households (12%) — is close to the EU average, and is trending downwards. 

Almost 12% of children 0-17 live in jobless households in Ireland.

Skill sets of those with low levels of education also inhibit employment.

Official Irish data show that the number of recipients of disability allowance rose from 96,000 in 2008 to 134,000 in 2017 while the number of beneficiaries rose from 127,000 to 188,000.


Average weekly earnings rose by 3.3% year-on-year in the second quarter, with all sectors of the economy seeing wage growth. The inflation-adjusted rise was at about 2.5%.

The CSO reported that Financial, insurance and real estate activities sector had the largest increase in average hourly earnings of 5.8% rising from €30.15 to €31.90 in the year. The Public administration and defence sector saw the smallest increase in average hourly earnings in Q2 2018, rising 0.6% from €26.13 to €26.28.

The incidence of low pay refers to the share of workers earning less than two-thirds of median earnings and the OECD Employment Outlook 2018 report shows that among OECD advanced countries Ireland at 22.5% in 2017 was second to the US for the percentage of low pay workers in the economy

In Dublin, residential rents rose at double-digit rates in the 12 months to June 2018.

Material per capita standard of living

Ireland's average material standard of living per capita in 2017 was below Italy's and the EU average while Germany's was 30% above Ireland's.  

The decline of Irish Villages

The motorway system, drink driving laws, bungalow blitz, the introduction of the supermarket in market towns from the early 1960s (the typical Irish farmer now buys vegetables in a supermarket!), and the recent decline of the standalone manufacturing plant – in particular the lack of indigenous enterprise – have put the kibosh on many villages. 

West of Bandon on the road to Dunmanway are the twin villages of Enniskeane and Ballineen. In 1965 Carbery Milk Products opened to produce cheese and food ingredients. It was a joint venture between 4 West Cork dairy co-ops and Express Dairies of the UK. Later the British interest was acquired by existing shareholders, and the firm today is West Cork’s star indigenous enterprise with 2017 revenue of €417m; sales to 50 foreign markets and 600 employed worldwide.

In Enniskeane Grainger Sawmills began operations in 1977. In the same year in another village, Lissarda, just 20km away, the Palfab Sawmills also began operations. They merged in 2013. The company employs about 150 people directly and exports half the output. 

Two other villages near Bandon are sustained by a US-owned pharmaceutical plant, Dunderrow and Upton. 

Credit is due to locals in many villages for improving the visual appearance of their areas. 

Availability of broadband (which is expensive when there are so many standalone rural houses), post offices and so on, matter but absent at least one thriving enterprise, a national plan would likely have too many aspirations. 

Finally, I will repeat again: the neglect of the indigenous exporting sector over many decades coupled with very poor employer business startup rates and the low number of exporters, of course, has consequences.