Posted tagged ‘unemployment’

The scourge of unemployment

August 1, 2009

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.

Studying through the recession

June 26, 2009

An item this week in the Belfast Telegraph reported that, as the recession affects employment and job prospects, more people are opting for university degree programmes, and in particular postgraduate (and post-experience) degrees. In this particular case, students were reported to be causing a surge in demand for the programmes of the Business School of the University of Ulster; I expect that the experience is similar across business schools in the other universities in Ireland.

In fact, though we have not yet been able to quantify this, the recession has significantly affected student behaviour. The signs are that we’ll find a much lower drop-out rate amongst all students, and greater attendance. Nobody would want to suggest that the recession is a good thing, but its impact on student preferences and behaviour may actually be beneficial.

But it is also important to note that this is a time for universities and other higher education institutions to provide access to education and training for those who have lost jobs or whose jobs may be at risk. The announcement by the Minister for Education earlier this week of additional funded places in higher education for the unemployed (well, part-funded) should prompt all universities to focus on the need to re-activate the labour market by providing higher levels of education to those who may benefit from them.

Perhaps what we all need to do at this time is to re-discover a sense of community and to do what we can to show solidarity. DCU intends to play a major role in that process.

Why we still need immigration

August 22, 2008

Following my last post on immigration, some people have written to me with comments on this topic, and based on some of those exchanges I wanted to add a post-script on this topic. One correspondent suggested that immigration was no longer right during an economic downturn: there would be no jobs to come to, or if there were they would be given at the expense of the indigenous population, who would see this happening and develop racist inclinations.

I should say right away that the threat of xenophobia or racism is always real and needs to be watched. But in so far as the comment suggests that immigration occurs in the context of a fixed labour pool and that it deprives the locals of jobs it is quite wrong. Of course the answer will depend somewhat on the types of immigration that may be taking place and the characteristics and skills of the migrants. But assuming for a moment that we manage immigration in such a way that a significant proportion of the migrants are ready to work and have some skills that we currently need then immigration is likely to stimulate economic activity and lower unemployment, even for the locals.

Without immigration we neither have sufficient numbers of skilled workers nor a high enough birth rate to persuade many investors that Ireland is a good place to develop knowledge-intensive enterprise. Recent Leaving Certificate results again show the perils we are facing as a country by the low numbers of students doing science and excelling in mathematics. What this might suggest to a company – say, from the US – looking for an overseas location for R&D facilities or high value production is that Ireland is risky as a location. If on the other hand we have demonstrated that we are willing and able to make up the shortfall by allowing immigration this may off-set the problem somewhat. The resulting investment will do much more than just give jobs to immigrants.

Immigration does not necessarily have this effect in all countries and societies and all contexts. Where the indigenous population is large and there is an economic downturn the effect of strong immigration may be negative. But Ireland’s circumstances are quite different. The truth is that if we want to maintain our recently won prosperity and see a continuing wave of foreign investment then we will need immigration. Without it we are likely to decline fast.


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