Last month, I talked about the need for unemployment to rise to the top of the agenda during 2010, having been a distant third behind the banks/NAMA and the public finances in 2009. Last week, the CSO published the latest detailed figures on the Live Register, which confirm the gravity of the unemployment situation facing the country.
In particular, the numbers highlight two dimensions of unemployment that cannot go ignored: regional differences and unemployment of young men. So much of the public debate last year revolved around the economic problems of middle-aged people. For Ireland to develop sustainably, the economy needs to be able to create jobs for its young. For Ireland to develop anything like the model of regional balance envisaged in various policy documents such as Towards 2016, it also needs to be able to create jobs outside Dublin. To see where we are now relative to these aims, it’s worth taking a step back to the summer of 2006.
In the middle of 2006, there were 325,000 men between the ages of 15 and 24 in Ireland. Three of every five of these (about 192,000) participated in the labour force. The remaining 130,000, one presumes, were in education. (Even in these progressive times, it is not hard to believe that the number of stay-at-home male spouses under the age of 25 was small.)
With only about 18,000 of those in the labour force signing on the Live Register in mid-2006, it is safe to say that there were about 175,000 employed men under the age of 25 in Ireland in mid-2006. In the three and a half years since then, three things have happened to young men of working age:
- Young men are unemployed and signing on. As discussed before, increases in the Live Register have proven to be a very good predictor of the recorded increase in unemployment. Whereas there were just 18,000 young men signing on in mid-2006, there are now (as of January 2010) over 55,000 signing on – meaning that at least 37,000 young men have lost their jobs. To put this in perspective, those currently signing on the Live Register represent one in five young male workers from 2006.
- Young men are dropping out of the labour market. The participation rate fell from about 60% in 2006/2007 to 50% by mid-2009. This is the equivalent of another 26,000 job losses. Put another way, the loss of a further 15% of boomtime jobs for young men are not showing up in the statistics, because these young men are opting out of working altogether.
- Young men are leaving the country. The latest figures available show that the total population of men under 25 has fallen from 325,000 to about 290,000. We all know that people in school or in university are unlikely to move country, so the dramatic fall of 10% in the male under-25 population almost certainly reflects lost jobs that aren’t showing up in Live Register or participation figures. Emigration is hiding the disappearance of a further 20% of peak-time jobs for young men. (And given that the CSO only publishes full population estimates for April of each year, the estimate of 35,000 who have left by mid-2009 is most likely a lower bound.)
These astonishing figures add up to almost 100,000 job losses in a segment of the population that had only 175,000 employed at the peak of the boom. Over 55% of jobs for young men have disappeared. One occasionally hears the argument that, as bad as things are, an increase in unemployment of ten percentage points means that 90% of us are in more or less the same position now as during the boom. What these figures show is that while the rest of the economy has lost perhaps about 10% of its jobs, young men have lost more than half theirs.
Even though who neither are male and under 25 nor have friends who are should be able to grasp the importance of turning this around. Even at its most basic, it represents a huge drag on the government finances, not to even mention the lost output and societal wellbeing behind the figures. The maps below compare the first quarter of 2007 with the best estimates available for January 2010. The number is a percentage, showing the estimated proportion of the male under-25 labour force signing on to the Live Register in each period.
The graph (which is available over on Manyeyes) shows not only the huge increase in unemployment over those three years but also the regional differences that have emerged. The three largest cities Dublin (and its hinterland in Meath, Kildare, Wicklow), Cork and Galway are relatively unaffected, as are – perhaps surprisingly – many parts of the Midlands where their older siblings have found themselves trapped in negative equity.
On the other hand, in a number of areas, including Limerick and Waterford cities as well as Donegal and Louth, at least half of all young men are signing on. In Limerick, already a relative unemployment blackspot during the boomtime, two out of every three young men are signing on at the moment. This is bleeding over into counties Clare and Tipperary as well.
Perhaps these figures are not surprising. There are those who point out that this crash was bound to come, purely because of how reliant our male employment had become on construction. Indeed, these job losses may be led by construction, which had employed one in three men in this country by 2006. But the job losses have ultimately come from all sectors. And – more importantly – the eventual return of a healthy economy (and a healthy construction sector) will mean the employment of no more than one in six men in building, not one in three.
Therefore, Ireland must look to alternative solutions to get one half of its future labour market employed. Unfortunately, as a short-term valve, emigration will have to play its part, particularly for those for whom Ireland was a new home. But one must also look at falling participation rates as a blessing in disguise. A record number of mature students – at 15,000, not a panacea but not to be ignored – a record number of mature students are applying for third-level education under CAO this year. The obvious next question, though, is whether the qualifications we are providing for our young people – men and women – are what a 21st Century labour market needs.