There’s no doubt about it: Ireland’s economy is absolutely flying. Being honest, the bounce-back has been stronger than many of us would have dared dream during the dark days of 2009-2011.
Sure, the amount of stuff Ireland produces every year may be growing at a faster clip than China. But while the economic recovery has been going from strength to strength, the social and rural recoveries still lag behind.
That’s why the looming election is so important. It’s not just about ‘securing the (economic) recovery’, but about making sure everyone gets to share in this renewed prosperity. It means spreading the benefits to every town and village across the country. And, it means doing more to raise the living standards of those no longer young or able enough to work. It also means getting more people into jobs and making sure fewer kids grow up in poverty or in a house without a working parent to lead by example. It’s about electing people that can make progressive change happen – not more hurlers on the ditch.
Crucially, we need to keep the jobs recovery going. Creating more and better jobs will be key to keep unemployment falling, to accelerate the rise in wages, and to make sure every worker has the right to be represented by a recognised trade union. It’s also a ‘win win’ way to reduce inequality.
So, what do the numbers say?
Since 2011, the unemployment rate has fallen from its peak above 15% to below 9%. It’s still falling. 1,000 jobs are being created every week, most of them full time. As is hardly surprising given 1-in-11 of the workforce are still unemployed, earnings have been slow to pick up. But, the latest numbers suggest most sectors are seeing modest increases, averaging 2.7% per year. When coupled with subdued inflation and cuts in income taxes – not to mention the staged restoration of public sector pay cuts and a minimum wage that has increased by a sixth since 2011 – people are starting to feel the benefits of the few extra euros in their back pockets.
Ireland’s labour market is a case of, to borrow a phrase, ‘a lot done, more to do’. What economists call ‘full employment’ is actually more like ‘normal unemployment’: when the number of people out of work falls to a level where the economy is chugging along at its full potential, but where inflation is stable. Because of the constant, and sometimes healthy, churn in the labour market, this means a certain number of people will always be unemployed.
At the height of the boom, unemployment fell as low as about 4%, or 1-in-25 of the workforce. The bust saw this number increase by a multiple of four or more, particularly when account is taken of those who had to emigrate. After a lot of volatility, we may now be nearing an inflection point where the number of Irish people returning again exceeds the number leaving.
Unemployment is on a trajectory to fall below 6% by the end of the decade, even though progress gets more difficult the closer you get to the holy grail of ‘full employment’. But, we can and must do better. It’s not only possible for Ireland to achieve ‘full employment’, but to lower it.
Smart reforms and targeted investment, combined with more buoyancy in the global economy, could well see us return to a situation early in the 2020s where fewer than 1-in-25 of the workforce are out of a job.
It is an unfortunate reality that the longer people have been out of work, and the lower their skill level, the harder it is for them to find meaningful work. While education and skill levels are higher now than the last time Ireland got over the hump of a major recession either side of the 1990 World Cup – a factor which helps explain the rapid fall in unemployment since 2011 – there are still a large number of long-term unemployed and jobless households.
Investment in vocational education, emotional skills and life-long learning must be crucial components of any Irish jobs strategy for 2020 and beyond. This is a theme I plan to return to later in 2016. As I have written before, we also need reforms – like affordable, high quality childcare services – that encourage more women to re-join the workforce.
We also need continuity in the long-overdue reforms to our welfare system currently underway. An incoherent system that was for so long entirely passive is slowly transitioning to a coherent, integrated system where your first day of unemployment truly is the first step on the path back to work.
Ireland is moving in the right direction, but we can still do better.
There may be few better ways to honour the heroes of 1916 than by casting your vote for the local candidate most ready to serve in a government that moves us closer to the ideal of a nation that truly cherishes all the children of the nation equally.