Migrants not displacing Irish workers - CSO

The economy ended last year with almost 87,000 more people in employment than at the outset.

More than half of these people were foreign nationals the Central Statistics Office (CSO) said yesterday, adding that migrant workers now make up more than 10 per cent of the labour force.

The CSO said that allegations that migrants are displacing Irish workers from their jobs are unfounded.

"We have absolutely no evidence of that type of a phenomenon occurring in the labour market since accession," said Padraig Dalton, senior statistician at the CSO. By the last quarter of 2006, over 28 per cent of workers in hotels and restaurants were foreign nationals, while 13.4 per cent of construction jobs were filled by migrant workers.

However, Mr Dalton said the falling numbers of Irish workers in these sectors has been caused by the dynamic nature of the current labour market rather than the displacement.

"People are moving from sector to sector, rather than from employment to unemployment," he explained.

"If displacement was occurring you would expect to see an increase in the number of unemployed [ Irish] persons," he added. In fact, according to the results of the CSO's latest quarterly national household survey, the number of unemployed Irish nationals fell by over 5,000 last year.

Jim Power, chief economist with Friends First, said that there was no evidence to indicate that displacement is creeping into the labour market.

"The economy is basically at full employment at the moment, so anyone who . . . is willing and able to work can get a job," he said.

"There is a requirement for [ foreign] nationals in the labour force, and they're not replacing domestic workers," he said.

Paul Sweeney, economic adviser to the Irish Congress of Trade Unions (Ictu) said that a minority of builders have been undercutting their competitors by hiring migrant workers, and although they are complying with minimum wage regulations, have been cutting costs on areas such as overtime pay. However, he says that displacement is not a huge issue at the moment, but he expressed worry about the future.

"As sure as night follows day there is a business cycle and we're at the peak of it," Mr Sweeney said.

"Displacement will probably become an issue when the downturn comes, and the downturn is coming. We've been really lucky but we can't last at this rate forever."

The CSO figures also drove home the fact that the construction sector remains the key driver of employment growth. It accounted for almost 60 per cent of male employment growth.

Although the level of house building is thought to have peaked last year, infrastructural projects and the boost contained in the National Development Plan are likely to keep the building impetus going for some time. Nevertheless alarm bells are starting to ring.

"There will come a time when we have enough concrete pumped into the ground," Mr Power said. "Construction cannot continue to grow indefinitely."

"A lot of the Eastern Europeans particularly that are coming in are working in the construction sector," he said. "So what happens when the construction sector starts to slow down? What happens to those workers at that stage? You could be building up social problems."

While the overall employment figures released by the CSO yesterday look very healthy, the underlying trends give cause for concern, Mr Power said.

So what can Ireland do to defy economic gravity for yet another year? Mr Power feels that it is essential that policy makers do not become complacent, and instead start focusing on the quality and sustainability of the jobs being created.