The latest rise in the unemployment jive register will come as a major disappointment to the Government. All the other economic indicators are moving in the right direction and job creation appears to be strong. Yet the trend in the live register traditionally the most commonly used measure of unemployment has been steadily upwards. By December the number of people on the register was 4,900 higher than at the end of 1994, despite strong economic growth.
The reasons for the increase in the live register are not clear. The Government argues strongly that the register is no longer a reliable measure of unemployment. Administrative changes in the way, people claim their social welfare payments appears to be one factor pushing the register higher. The increasing prevalence of part time work is also a factor. A lower level of net emigration may also be contributing to the increase in the live register by further swelling the labour force.
It is important to distinguish between trends in employment and in unemployment. There is no indication that the pace of employment creation has slackened since last April, when the last official figures showed a rise of 49,000 in total job numbers over the previous year. The Department of Finance estimates that total employment rose by 42,000 for last year as a whole. Recent figures from the semi state agencies, IDA Ireland and Forbairt, for job creation in manufacturing industry last year indicate that this estimate is reasonable.
What about the trend in unemployment? Here there is conflicting evidence. The labour force survey showed a large fall in unemployment in the year to last April to 192,000. The live register shows a total of over 280,000 and rose steadily in the later months of last year. The labour force measure probably gives the better measure of the underlying trend. But the Government has not yet provided any complete explanation for the divergence between the two measures. It is examining whether a more regular labour force measure of total employment and unemployment should be taken perhaps once a quarter rather than the current once a year. While this would require extra money for the Central Statistics Office, it might be money well spent as proper statistics are essential to inform policy makers.
Whatever the arguments about the level of unemployment, it is clear that the economy still suffers from a crisis of long term joblessness, with large numbers of people left behind by the economic recovery. The Government says that it is looking at new measures to address this problem in the Budget and the Minister for Enterprise and Employment, Mr Richard Bruton, says he is formulating fresh approaches.
Addressing the crisis of long term unemployment must now become a priority for the Government. So far it has made many commitments to tackle the issue, but has still to come forward with concrete proposals. It must now show that it has formulated new approaches and is prepared to implement them. These should include tax and social welfare reform an issue which has been subject to lengthy examination by a committee of civil servants and outside experts. Specific measures are also needed to assist the existing group of long term unemployed and ensure that fewer people fall into this trap in future.