Employment figures augur well but recovery yet to be felt on living standards
Analysis: CSO survey suggests full-time jobs are leading the way in job growth
The latest Quarterly National Household Survey, compiled by the Central Statistics Office, shows the State’s headline rate of unemployment is now 11.5 per cent, down from a recessionary high of 15.1 per cent in 2012.
There is no greater reflection of economic health than job creation, and on that basis the Irish economy appears to be heading out of recession.
The latest Quarterly National Household Survey, compiled by the Central Statistics Office (CSO), paints a picture of a labour market in recovery, albeit with some deep-seated problems, most notably the high rate of long-term unemployment.
History tell us this problem is not easily resolved, even when the economy returns to a more robust pattern of growth.
The QNHS survey is considered by economists as the most reliable set of numbers on the economy, primarily because of its large sample size.
Yesterday’s survey – for the second quarter of this year – was based on 19,301 valid household responses, which is why it takes time to collate.
It shows the State’s headline rate of unemployment is now 11.5 per cent, down from a recessionary high of 15.1 per cent recorded in 2012.
Equally, it suggests employment growth is continuing on a positive trajectory, albeit at a more moderate rate.
On a quarterly basis, employment grew by 0.2 per cent, which equates to about 4,300 new jobs, marginally ahead of the 0.1 per cent recorded in the first quarter.
However, this was significantly behind the stellar rates of growth witnessed in each of the four quarters last year, which cumulatively saw more than 50,000 new jobs.
One might be inclined to view this slowdown as a cause for concern. However, it may be that much of the rapid employment growth in the initial phase of recovery was in part-time work as firms tentatively began to rehire without committing to taking on full-time staff. As recovery here and in some of our export countries has cemented, firms have become more confident about hiring.
As a result, growth in full-time work is now said to be outstripping the rise in part-time employment, giving less spectacular job creation rates overall, but, arguably, making a more meaningful impact overall.
This may explain why the resurgence in employment has taken so long to show up as better tax revenue.
This theory was underscored by the Full-Time Equivalent (FTE) employment measure, contained in yesterday’s survey, which registered a 2.3 per cent increase year-on-year.
“If you look at the breakdown between full and part-time employment, all of the growth is in full-time work now,” Minister for Jobs Richard Bruton said.
He also noted the survey suggested there was a decline of 20,000 in the number of part-time workers who expressed the belief that they are underemployed, reflecting what was further evidence of people moving into full-time employment, he said.
Of course, this view will have its detractors and Jimmy Kelly, regional secretary of Unite, insisted the survey showed there had been a collapse in job creation while earnings were also falling.
‘Recovery is a myth’
“This week’s figures confirm what working people have long suspected: recovery is a myth which is not being felt in their pockets,” he said.
The central issue with Ireland’s economic recovery to date,however, is that it has yet to make any meaningful impact on living standards.
The real income of households has been declining on the back of new taxes and charges deployed as part of the Government’s long-standing austerity drive for several years.
A report this week suggesting public-sector workers were paid on average nearly 50 per cent more than their private- sector counterparts will only serve to aggravate those in the private sector trying to make ends meet.
As the labour market recovers, the demand for pay rises will undoubtedly increase. Mr Bruton, however, insisted the priority had to continue to be employment creation. But he did hold out the prospect of tax breaks for middle-income earners in the Budget.