Support scheme key to tackling jobs crisis

 

OPINION:State support for employment is increasingly urgent – as evidenced by yesterday’s jobless figures, writes DAVID BEGG.

MAY I take this opportunity to wholeheartedly endorse almost everything your columnist Sarah Carey wrote yesterday. I say “almost” because unfortunately I cannot agree with those elements she got so spectacularly and thoroughly wrong.

First, the positive stuff. Carey is correct to point out that a “jobs subsidy scheme” of the nature she outlined would be disastrous. It would be a waste of vital taxpayers’ funds, it would do nothing to ease the jobs crisis and, of course, it would be wide open to corruption and abuse.

Unfortunately, where she went wrong was in attributing such an initiative to congress. The truth is that precisely this approach has been repeatedly proposed by employer and business groups. We have opposed such feckless initiatives from the outset.

Over the course of six months of talks with the Government – with the Taoiseach, his Ministers and senior officials – congress made it known that such a limited and conservative approach to the jobs crisis would be a criminal waste of scarce resources, especially when such resources could be put to good, productive use.

On May Day, congress publicly launched our €1 billion Job Creation and Protection Plan, which aimed to see “all the machinery of the State harnessed to the goal of tackling the unemployment crisis.” That plan has been in the public domain for over two months – on www.ictu.ie – and has been the subject of extensive comment.

It is our view that unless and until the Government begins to treat the jobs crisis as at least being equal in magnitude and scale to the banking crisis, it will not be capable of tackling it in the manner required, let alone address it. Thus, the congress plan called for a “range of new, innovative and creative measures that will harness all the machinery of State to the same objectives – protecting jobs, creating new employment and training and protecting peoples’ incomes”.

The plan included a wide variety of measures designed to ensure that redundancy was a “last resort.” It included ideas such as job rotation; State support for short-term working; a social employment programme to meet gaps in social infrastructure; reforming the social welfare system; changes to employment law and a more focused, strategic approach to training.

On June 23rd, the Government issued a framework document containing proposals on jobs, pensions and home repossessions. In many respects, this was a formal response to our own jobs plan. Among the Government proposals was one to allocate €250 million to a temporary employment subsidy scheme.

Congress criticised the proposal for its “poverty of ambition” and the failure to allocate a level of resources commensurate with the crisis. We have conveyed this response to the Government and, at the time of writing, are still awaiting a response.

And with the latest unemployment figures confirming that we will almost certainly see 500,000 jobless by year’s end, the fact that we are still awaiting that response is a source of enormous frustration. We need to see far greater urgency – if not a sense of national emergency.

Contrary to what your columnist asserted, no employment subsidy scheme has been agreed with the Government. As stated earlier, congress is not and will not be party to any scheme that wastes resources and does not address the crisis. But there is no doubt that we need urgent State intervention to address unemployment. Doing nothing is not an option. Such intervention is working well across the Continent, meaning that we don’t have to reinvent the wheel – and we can shamelessly plagiarise whatever works best.

Indeed, yesterday’s Financial Times – not a known advocate of state intervention – devoted a full page to an approving look at how support schemes to keep people working were operating in Germany, the Netherlands, France, Hungary, Portugal, Slovenia, Switzerland and Finland.

Germany has 1.25 million people on state-supported short-term working (a model cited in the congress job plan). In effect, Government support allows companies faced with a dip in demand to introduce shorter working hours and skills retraining.

The advantage is that people stay in employment, upgrade their skills and maintain a reasonable standard of living. They also retain spending power, avoiding the deflation of domestic consumption that has happened here.

Without this scheme, German authorities estimate that an additional 500,000 people would be out of work.

The thoroughly-researched Financial Times study also looked at similar schemes in the US and UK, where they operate without state sanction or support.

It concluded that the continental model was far more effective in terms of “restraining” the rise in jobless numbers.

The evidence and experience is all there. We can learn some very useful lessons from our continental colleagues, if we choose to. Or we can do nothing.


David Begg is general secretary of the Irish Congress of Trade Unions. He is also a governor of The Irish Times Trust, proprietor of The Irish Times