Creating Employment

 

This year has been a record one for job creation, with exceptionally strong growth in employment and a steadily falling unemployment rate. Figures recently published by the Central Statistics Office show that total employment rose by 98,000 people in the year to last April. The unemployment rate of 7.2 per cent at the end of November is the lowest recorded since the Central Statistics Office began collating its data in 1983. There has seldom been a better time for those with appropriate skills to seek jobs. IDA Ireland has continued to attract substantial numbers of multinational firms, many of which have taken on large numbers of new staff this year and will continue to so do in 1999.

While the overall picture remains bright, companies in some sectors are facing difficulties. Fruit of the Loom in Donegal and Krupps in Limerick have both announced significant lay-offs. These announcements are a sign of the pressure which is coming on many lower-cost producers, particularly those not heavily reliant on skilled workers. As well as the increasing threat of redundancies in certain sectors, it is likely that job growth - while it will remain strong - will not continue in 1999 at the same pace as this year. The general slowdown in the world economy and the fall-off in foreign investment globally are bound to have some impact. Total employment this year is set to grow by between 6 per cent and 7 per cent, but this could fall to 4 per cent next year.

As we head into the euro, business is facing new competitive pressures, where it will become increasingly difficult to pass on price increases. The Central Bank's warning on wage rises in its bulletin this week is timely in this regard. The problem for many firms, particularly exporters, is that they will not be able to pass on increasing wages through price rises. So rising costs could eventually undermine competitiveness and eventually lead to redundancies. For Government, the backdrop in the jobs market will thus still remain favourable, although it is unlikely to be as buoyant as this year. Policy must continue to concentrate on maintaining the Republic's attractiveness as a location for investment from both multinational and indigenous industry.

One key area will be to ensure a continued supply of skilled labour. The Government has started to address this issue through new investment in technology training. A continued focus is necessary on this area, together with ongoing consideration of measures to make it attractive to enter the jobs market. This year's Budget took some welcome initiatives in this regard, by lowering the tax burden on lower-paying jobs. There is still plenty of scope, for example, for more women to enter the workforce, before we begin to come close to the female participation levels seen in countries such as France and Germany. The Government is to consider new measures to support childcare, which could make a significant contribution in this area. Further resources also need to be focussed on measures to bring the long-term unemployed back into the labour force. The overall rate of unemployment - and the rate of long-term unemployment - have both fallen significantly. However, there is still a large group of long-term unemployed people who are not currently equipped with the skills to make their way back into the jobs market and require ongoing assistance.