Irish experience ‘catastrophic change in circumstances’ due to economic crisis

Some Irish people have experienced a “catastrophic change in their circumstances” due to the economic crisis, according to a report published yesterday.

The report by the National Economic and Social Council (NESC), which advises the Department of the Taoiseach on strategic issues for Ireland's economic and social development, found that few Irish people had been untouched by the economic downturn but that those who were worse off before the onset of the crisis, particularly the unemployed, lone parents and people who are ill or disabled, remained the worst off.

The report, which drew from Government, NGO and academic sources covering a wide range of areas including unemployment, debt, poverty, housing and income, cited unemployment as "arguably the biggest blight of the economic crisis", affecting people's incomes, their wellbeing and the overall economy.

Unemployment
It described long-term unemployment as "the greatest scourge of the economic crisis", noting that, in the third quarter of 2007, at the height of the boom, 106,100 were unemployed, a figure that had more than trebled by the third quarter of last year when 324,500 were unemployed, though the figure dropped to 294,600 in the fourth quarter of the year.

It also found that Irish people were significantly more likely to be underemployed due to the economic crisis. Just 4,100 were underemployed in 2006 compared with 145,800 last year, an increase of 3,456 per cent.

The report noted that the proportion of jobless households – those where less than 20 per cent of available adult time is spent working – increased from 15 per cent in 2007 to 22 per cent in 2010, while a high proportion of children, nearly a quarter, lived in jobless households in Ireland.

It also found that children had a higher exposure to poverty than older people, although older people living alone, the majority of whom are women, and those in ill-health or disabled, were more likely to be in poverty.

It said that those on the lowest incomes and those most vulnerable to poverty were households where no one was working, while pensioners were less affected by the economic crash than other groups.

The report found that while the consistent poverty rate fell from 6.6 per cent in 2006 to 4.2 per cent in 2008, it had grown to 6.9 per cent in 2011.

The percentage of people at risk of poverty has also grown since 2009, when it stood at 14.1 per cent to 16 per cent in 2011.

Meanwhile the deprivation rate, which measures those experiencing two or more types of deprivation, more than doubled from a low of 11.8 per cent in 2007 to 24.5 per cent in 2011.

On average 38 per cent of all households spent more than their disposable income.

However, households with the lowest incomes were most likely to have expenditure that exceeded their income. Almost two-thirds (63 per cent) of those in the lowest income category spent more than they earned, while over half of those in the second-lowest income category had higher expenditure than income.

Mortgage arrears more than trebled between the end of 2010 when 24,011 households were in arrears for over 90 days, compared to 86,146 last June.

The number of rent allowance recipients also rose from 59,861 in 2006 to 96,803 in 2011, an increase of 62 per cent, while 98,318 households were on a local authority housing waiting list 2011 compared to 42,946 in 2005, a 129 per cent increase.

Nearly a quarter of all households were in arrears with at least one bill or loan in 2010.

The report found that people had become more dependent on public services such as social protection, employment services, education and training, health and social housing.

Vulnerable
It noted that "it remains vital that they provide an adequate service for all citizens who require them, but especially those who are vulnerable as a result of the current economic situation".

In its conclusions, the NESC noted that “it may be some time after the economy begins to grow before we see an increase in employment”, recommending that extra efforts be made around job creation.

It also suggested that skills requirements might be somewhat different in future, meaning education and training agencies would be required, and said the crisis had highlighted the importance of good governance arrangements and the requirement for accountability mechanisms.