The scourge of unemployment

In the various debates taking place in public about the policies needed to get us out of recession, there seems to me to be one general point of agreement: the importance of combating unemployment, and ameliorating its effects where it does occur. When the Beveridge report (Social Insurance and Allied Services) was issued in the UK in 1942, one of the ‘five giants’ it listed that stood in the way of progress was ‘idleness’. This was of very major significance, not just because of the experience of unemployment in Britain in the first half of the 20th century, but also because it must have been very clear to the writers that the emergence of the Nazi Germany they were just then fighting owed much to the effects of mass unemployment in Germany in the years after the First World War.

The speed at which unemployment has grown in Ireland over the past year can be seen in the runaway predictions for this year and next. As recently as in October 2008 a pessimistic prediction for 2009 was that we would experience unemployment of perhaps over 8 per cent. Would that it had been true. By April the prediction had risen to 11.4 per cent, and just a month later the Economic and Social Research Institute was putting it at 13.2 per cent, while also holding out the prospect of 17 per cent in 2010. A very hazy light at the end of the tunnel, perhaps, because the latter Institute is now in its most recent report going for a rate of 16.1 per cent for 2010.

Although in terms of human history it’s not that long ago since we last had significant unemployment (I am thinking about the 1980s), we are no longer used to it, and I don’t know how well we’ll cope. Prosperity has a way of papering over the cracks in the social fabric, and unemployment has a habit of tearing them open. There are many risks right now.

But chiefly of course unemployment is human misery, and demands our attention. That attention is not necessarily offered by providing welfare benefits: it needs measures to stimulate economic activity and, through it, employment. That in turn may be seriously hampered because so many still instinctively feel that employment can be restored through job creation under-written and subsidised by the state. Leaving aside how much of the can be done under European Union law, it is in any case not the answer. In past decades unemployment could be cured by increasing activity and thus employment in labour-intensive industries. Now it is much more complex, and the main hope rests in enterprise start-ups, particularly those that are technology-intensive. A whole new mentality is needed. And for that, we need a whole new debate, and urgently.

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2 Comments on “The scourge of unemployment”

  1. Vincent Says:

    We needed that debate 15 years ago and it was fairly urgent at that time. In the interim certain policy makers mounted their ideological high horses and coupled social engineering with monetarist anti inflation. Understanding the latter to mean wage inflation, only.


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