As I mentioned at the start of the year, 2010 should be the year that Ireland’s policymakers – as well as economists and journalists – re-balance their focus away from NAMA, with potential losses in the billions, in favour of the deficit certainly but also an equally sizeable long-run problem, Ireland’s unemployment crisis, which will bring costs in the tens of billions over the next decade.
For context, the average number of people signing on in 2006 was just over 157,000. In 2007, it had risen slightly to 162,000. After that, it increased with speed. By mid-2008, it had risen to just short of 200,000. By the end of 2008, the number signing on was almost 300,000. By June 2009, it was over 415,000. At that point, the annual rate of change in signers on was almost 100%. In the month just gone,Â June 2010, there were over 450,000 signing on. So the bad news is that the number is still getting higher, quarter after quarter. The good news is that the overall trend is one of slow stabilisation, with the number of people signing on about 10% higher than a year ago, rather than 100%.
The news from the last couple of months has not been good, though. About a year ago, I highlighted two important new trends in Ireland’s unemployment: gender and cities. The gender point remains valid. Whereas almost all of the increase in unemployment in 2007 and 2008 was male, in the first half of 2009, over one third of new unemployed were female. But between August and November last year, the number of women signing on fell by 10%. Since then, however, the number has crept back up and in June this year, it reached a new high.
Earlier this year, I highlighted an even more worrying trend: the lack of jobs for young men. In mid-2006, 175,000 young men were at work, a number that had fallen to less than 100,000 by the start of 2010. In an economy where about 10% of people had lost their job, more than half of jobs for young men had disappeared. To come with county-level estimates, those figures use Live Register numbers – which correspond more to the sum of unemployment and underemployment, rather than just unemployment – as well as Quarterly National Household Survey data on labour force participation.
Updating those figures on un/der-employment gives the following results:
- The national unemployment rate for men under 25 has risen from about 10% pre-crisis to almost 45%. For young women, the unemployment rate is also very high, at an estimated 28% in Q2 2010. This compares to 23% for men over 25 and 14% for women over 25.
- In Donegal and Louth, the proportion of young men signing on is almost three quarters. In a further eleven counties, concentrated in three regions – Border, Midlands and South-East – the estimated number of young men signing on is between one half and two thirds. In only nine counties, including Dublin and its three neighbouring counties, is the proportion below 40%.
- There is a very high correlation between unemployment rates across the four age-gender groups (close to or above 90% in each case).
Visualising the crisis
The map below, using IBM’s Manyeyes tool, shows how unemployment rates for young men now compared with early 2006.
A second way of visualising the scale of the problem is to use Google’s Motion Charts technology.Â A motion chart is a very good way of showing data across a number of dimensions. Two dimensions are unemployment rates for men under 25 and women over 25. A third dimension is time, which you can manage by using the bar along the bottom (or just pressing play). A fourth is the size of a county’s labour force, represented by the bubble size. The final dimension is region, represented by the bubble colour.
I’ve tried to include the motion chart above – if it doesn’t work, you can access it here, via Google Docs (which may require you to sign in). The motion chart highlights the following findings:
- Until late 2007, female over-25 (FO25) unemployment in all parts of the country was below 10%, while male under-25 (MU25) unemployment stayed below 20%.
- Over the course of 2008, while FO25 unemployment did not increase substantially, staying below 14% in all parts of the country, MU25 unemployment had already started to increase dramatically, reaching 45% in some counties and 20% or more in almost all counties.
- Female unemployment hit in early 2009, with some counties seeing one in five women sign on.
- The last two or three quarters have seen mixed signals, with unemployment rates falling then rising. The high correlation between the different types of unemployment is evident throughout.
- The regional nature of Ireland’s unemployment crisis is apparent. Assuming that people from Northern Ireland signing on is not a significant issue, three regions make up the 12 worst affected counties – Border, Midlands and South-East. The only exceptions are Sligo (which acts more like its Western brethren) and Kilkenny. The Mid-East, Dublin, West, South-West and South-East have been less affected.
Implications for policy
For me, the latest unemployment trends highlight the importance of mobility in its broadest sense. This includes mobility between jobs and sectors, as if you look at unemployment by sector, very few people have lost their jobs outside of industry (including construction) and retailing. Finding new jobs for people coming out of posts that won’t be replaced any time soon means making sure they have the right skills. In that sense, I’d rather have 50% of 15-24 year-olds unemployed than 50% of 45-54 year-olds.
It also ties in with mobility between towns and regions and the issue of negative equity and the property market more generally. People who bought homes in Longford when they had jobs there are less able to move to new jobs in (say) Kildare than those renting. The topic of negative equity mortgages has come up recently. This will be of no use to those who have no job. Instead, the focus should be on two things. First, IDA Ireland and Enterprise Ireland need to factor in Ireland’s excess property into their plans. For them, it is a good thing, as vacant commercial property beside those stuck in Section 23 developments means much lower office costs for companies setting up. Secondly, the government should explore schemes that will help those with a mortgage rent out their home in one location and become a tenant elsewhere, closer to employment.live register, unemployment, youth unemployment