Live register up again

The seasonally adjusted Irish Live Register total increased from 402,100 in May to 413,500 in June, an increase of 11,400 in the month. This is the smallest monthly increase since last September (see graph above). The standardised unemployment rate in June was up to 11.9% - the highest rate since April 1996.

Remember, the Live Register is not designed to measure unemployment. It includes part-time workers (those who work up to three days a week), seasonal and casual workers entitled to Jobseekers Benefit or Allowance. Unemployment is measured by the Quarterly National Household Survey and the latest seasonally adjusted figure, for January to March 2009, is 223,400 unemployed.

Taoiseach Brian Cowen on Wednesday forecast that the number of dole claimants will rise to 500,000 by Christmas and grow further into 2010. It's clear, given the expected international backdrop of years of slow growth, that Irish unemployment will remain elevated for an extended period.

80 jobs go in Belmullet

Up to 80 full-time and part-time job losses have been announced in the Mayo Gaeltacht with the closure of a major call centre. Eurotel Marketing Limited, which is based in the Udarás Na Gaeltachta Industrial Estate in Belmullet (above), has informed its workforce by letter that it will have closed down completely by October I.

The economic crisis and the increasing use of automated technologies is being blamed by the company for the difficulties which are leading to the shutdown. At its peak, Eurotel employed over 100 full-time workers in Belmullet but this has decreased significantly in recent years because of problems caused by the weakening dollar. Recently, the company closed its customer contact centres in Dublin and Athlone.

Thousands of jobs in the food industry at risk

Today, a body representing food and drink companies says 2,000 jobs have been lost in the industry so far this year and 'many thousands more' are at risk. Food and Drink Industry Ireland (FDII), part of employers' group IBEC, said firms' competitive position had been damaged by high business costs and the sharp fall in the value of sterling.

It called for Government action to reduce business costs, particularly energy. The body also urged the Government to seek EU approval to set aside its rules on state aid in order to provide grant aid to firms hit by the fall in sterling. FDII also wants an export credit scheme with a state-backed guarantee.

McJobs back on the menu

Sean Poulter in the Daily Mail writes on how jobs in McDonald's are in demand again.

In the UK, fast food giant McDonald's is being swamped by more than 2,200 job applications every day, including from bank workers, graduates and teachers. The level of applications suggests the stigma surrounding the 'McJob' has been swept aside by people who are desperate for work and an income.

Among the few sectors that are bucking the recession and rising unemployment are fast food chains and some supermarkets. While these sectors can provide useful, flexible jobs and income, they are not the international wealth creators such as manufacturing and financial services that will drive the UK out of the economic mire.

McDonald's said that it is currently hiring 140 people a day to flip burgers, cook fries, serve customers and run its restaurants. In the past month alone it received 305 trainee manager applications from people with a wide variety of backgrounds in finance and banking, education, hospitality and the retail sector.

David Fairhurst, senior vice president McDonald's UK & Northern Europe, said: 'Given the current levels of unemployment, it's no surprise that we are attracting thousands of applications each day. We are hiring up to 140 people each day, and those employees are choosing to remain with us for considerably longer thanks to the range of opportunities we offer.'

Mcdonald's has struggled to overcome a negative stereotype of the jobs it offers, which have been labelled in the past as the 'McJob'. The Oxford English Dictionary currently describes a McJob as 'an unstimulating, low-paid job with few prospects, especially one created by the expansion of the service sector'. Mr Fairhurst has slammed this definition as 'out of date and insulting' and has campaigned, unsuccessfully, to have it changed. He said: 'The current definition is extremely insulting to the 67,000 people who work for us within the UK.

Source

Effects of youth unemployment

There's a good article by Ian King in this morning's London Times dealing with the impact of youth unemployment. Here's a slightly abridged version. You can read the full version in the source link at the bottom.

While all forms of unemployment are bad, youth unemployment is probably the most searing because of its corrosive effects throughout society. Research by organisations such as the Prince’s Trust and the Joseph Rowntree Foundation have proved that “young adulthood” is a period of heightened vulnerability in a person’s life. Unemployment adds to the risk of drug abuse, criminality and, ultimately, incarceration. Work by the Institute of Criminology at Cambridge University, which has been studying the subject for nearly 50 years, established long ago that young people are more likely to commit crime when they are out of work. That crime is often petty but it can turn into something more serious. The summer riots of 1981 in inner-city areas were strongly linked to high rates of joblessness among young people.

For school-leavers or university graduates, going straight on to the dole queue is damaging psychologically, because of the harm it does to self-esteem at a key age. It can also have a lasting effect on careers because a gap on a person’s CV, particularly straight after school or college, can raise awkward questions about their employability. Just ask people aged 48 to 50 who, as new graduates, struggled to find jobs between 1980 and 1982. Youth unemployment is not just a problem in Britain, though. According to official statistics, 20.4 per cent of people aged 15 to 24 in France were unemployed at the end of last year, compared with 16.5 per cent in Britain. In Qatar and Saudi Arabia it is almost 25 per cent. If this all sounds very bleak, it is. There is only one consolation. Much of the great popular music of the past 35 years has been born in eras of unemployment and frustration.

Source: London Times, 18 June 2009

Live register crashes through the 10% mark

The latest figures from the Central Statistics Office show that 354,437 people were on the Live Register last month. This represented an increase of 26,576 from the January figure, which was a record. The Live Register has now risen by 87% over the past 12 months, also a record. The CSO said the unemployment rate rose to 10.4% from 9.6% in January.

Bloxham Stockbrokers' Alan McQuaid says that as with January, the Live Register figures are 'simply horrendous'. He says they underline the fact that the Irish economy is now in severe crisis mode with the labour market heading for meltdown. 'It is essential in our view that the forthcoming mini-Budget includes some measures to stimulate demand in the economy and project jobs. Focusing on just simply stabilising the public finances and not targeting economic growth will not work, and indeed is likely to do more damage than good', the economist says. In a note today, Davy predicts that the unemployment rate will pass the 12% level by October. That would mean a near 8% increase in two years - the rate was only 4.5% in October 2007. The stockbrokers said that the last eurozone country to see an equivalent jump was Finland during the period from 1990 to 1992.

The Live Register is not designed to measure unemployment. It includes part-time workers (those who work up to three days a week), seasonal and casual workers entitled to Jobseekers Benefit or Allowance. Unemployment is measured by the Quarterly National Household Survey and the latest seasonally adjusted figure, for September to November 2008, is 170,700 persons unemployed.

Increased unemployment lowers oil prices even further

Oil prices have fallen by more than $1 a barrel as rising US unemployment has led to further fears of weakening demand for oil among US consumers. US light, sweet crude settled down $1 at $40.17 a barrel while London Brent slipped 25 cents to $46.21.

The US unemployment rate rose to 7.6% in January, up from 7.2% in December, according to official figures - the highest level since 1992. The rapid rise in unemployment suggests the US recession is deepening. Companies as well as individuals are cutting back on spending.

Officials from the producers cartel, the Organization of the Petroleum Exporting Countries (Opec) have said that current price level is too low for its members to make enough revenue or encourage investment in new supply.

Live register hits 9.2%

Official figures have confirmed that the number of people on the Live Register hit a record high of almost 328,000 in January. The Central Statistics Office said the numbers signing on rose by almost 36,500 from December to 327,861. The Taoiseach told the Dáil this morning unemployment could reach 400,000 by the end of the year.

The Live Register figure has now surged by more than 80% over the past 12 months. The seasonally adjusted figure rose by 33,000 to 326,100, while the unemployment rate jumped to 9.2%. up from 8.3% in December.

Bloxham's Alan McQuaid described the data as 'horrendous', and underlined the fact that the Irish economy was now in crisis mode. 'Apart from the sharp fall in construction employment, other sectors like manufacturing, retail, transport, and financial services are starting to significantly feel the pinch too,' he added. Davy said welfare payments would rise by at least €350m based on the last month alone, though the Government will get some of this back through taxes as that money is spent. The stockbroker expects the unemployment rate to reach 13% by the end of 2010.

The current 9.2% rate is the highest rate since December 1997. This is up from a low of 3.7% in February 2001, but remains below the average unemployment rate of 16% in the eighties.

Given that we expect the weakness in the labour force will accelerate in coming months, double-digit rates of unemployment will likely come sooner than we previously thought, and we now see the rate hitting 10% in coming months. This estimate takes into account a downward revision to the Live Register estimate of unemployment when the official unemployment figures are released in the Q4 Quarterly National Household Survey, as this measure does not include part-time workers who are eligible for unemployment benefits.

Central Bank predicts 4.7% drop in Irish GDP in 2009

The Central Bank says it expects the economy to contract by 4.7% this year. The country continues to be impacted by global recession and falling demand in what the bank called 'an exceptionally difficult period for the Irish economy.' In its latest economic forecast - the first of 2009 - the Central Bank says the contraction will lead to significant job losses with 100,000 fewer people working at the end of the year. The bank also says that unpalatable short term measures are needed if the economy is to stabilise in 2010. The Central Bank says that GNP will slow by 4.7% in 2009, while GDP will contract by 4%. This compares to estimated figures of negative GNP growth of 2.6% for 2008 and negative GDP growth of 1% for 2008. The figures are a marked slowdown from the GNP growth of 4.1% seen in 2007, while GDP growth registered 6% then. The Central Bank also says that consumer spending will slow by 2.5% this year while inflation will fall to an average rate of -1.9%.

'We are in an exceptionally difficult period for the Irish economy,' commented Central Bank Governor John Hurley as he published today's economic bulletin. 'Our forecasts published today indicate a further serious downturn in the coming year,' he added. He said that to support a return to a more stable economic activity in the medium term, difficult decisions have to be taken and implemented now.

'In particular, it is vital that we move to correct the sizeable deficit in the public finances and that we improve our competitiveness position, which is all the more important in the light of the global downturn,' he said. In the housing market, blamed for many of the country's current ills, the Central Bank says completions could fall to as low as 22,000 units this year compared to 52,000 last year. Last year saw the first drop in employment in many years. The Central Bank says that trend is set to accelerate and assuming some emigration, unemployment is likely to average 9.4% of the labour force this year. However, the bank also believes that Ireland has the potential to grow strongly again if productivity can be improved. But it adds that the potential is not a given and it warns that unpalatable measures are needed. The bank says the largest item of Government expenditure - the public sector pay bill - is 'beyond the scope of current resources'. It says the public sector needs to use its purchasing power to drive hard bargains with the services sector.

How do the unemployed spend their time?

An interesting article written by Daniel Hamermesh appeared on Freakonomics during the week.

Last night Jay Leno joked that only 500,000 people attended Bush’s second inauguration, while 2 million were at Obama’s. The reason, so he claimed, is that we now have so many more unemployed people. Good joke, but is it correct? How do unemployed people spend their time? How does unemployment affect time use in the entire economy? What is the lost output from unemployment, and what is the utility loss?

Several of these questions couldn’t be answered until now due to lack of data. A new paper provides some surprising answers. The unemployed use the time freed up from work for pay almost entirely in leisure and personal maintenance; they do no more household work than employed people. Similarly, in areas where unemployment is perennially high, there is less work for pay, more leisure, but no more household production.

But when unemployment suddenly rises, as in a recession, people shift from work for pay to household production; people don’t take more leisure time than before. So if we would measure output to include production at home, we would infer that a recession doesn’t reduce total output by as much as we thought; and perhaps the utility burden of a short recession is not as severe as one might imagine.

Original article

Dell poleaxes us!

* Sorry about the lack of posts in recent days. We had a new exam system in the school over Christmas which seems to have increased the scale of corrections substantially - for me at least! But leavonomists, rest assured, normal service resumes from today. *

Well, this week brought us one of the worst pieces of news since the recession hit when Dell in Limerick announced 1900 job losses over the next 12 months. The manufacturing plant is moving to Poland. 450 people will lose their jobs by the end of April, with the remainder gone by next Christmas. About 1,000 high-value jobs will remain in Limerick, but for the workers who were losing their jobs, the decision was final and would not be reversed.

The job losses are a huge blow for the mid-west region, but the knock-on effects may be far worse. Dell confirmed that 1,500 jobs in other locally based companies supplying it would be directly affected by the downsizing. Local business leaders have estimated that as many as 5,000 people could lose their jobs by the end of the year, as the shockwave from the announcement hit the city. With unemployment rates in Limerick among the highest in the country, and jobs going by the day across a range of industries, the chances of re-employment for many are slim, at best. In all, the events of this week are yet another reminder that the country's largest employers no matter what sector they're in - Waterford Crystal, Tara Mines and now Dell - are vulnerable to the vicissitudes of a wildly turbulent global economy.

10% unemployment before Easter?

Ireland's main body for personnel managers, the Chartered Institute of Personnel and Development (CIPD), predicted yesterday that redundancies will soar to about 2,270 a week in the period between New Year and Easter, sending unemployment above the 10% mark. CIPD Director Michael McDonnell said employees would feel the full effect of "the triple whammy" of the bursting property bubble, the global recession and the crisis in financial markets. "The ripple effects are already spreading out from the construction and property market epicentre to hospitality, retail, travel, personal and professional services firms", Mr McDonnell said. He believes some employers have held back from job cuts but lack of access to bank credit, falling consumer demand and the relative strength of the euro against a weakened sterling will force their hand.

US jobless queue lengthens

US employers axed 533,000 jobs in November, the biggest monthly cut since 1974, the US Labor Department said. In a dramatic indication of the worsening economic situation, the US jobless rate rose to a 15-year high of 6.7% from 6.5% in October. Since these latest numbers were compiled, further jobs losses have been announced, including big cuts at AT&T. Recent figures have fuelled fears that the world's biggest economy is set for a deep, long downturn. Reacting to the unemployment data, US President-elect Barack Obama said: "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better."

Yet more unemployed

The latest unemployment figures from the Central Statistics Office show another record number of people signing on to the Live Register in November. 16,900 people signed up for unemployment payments or Social Welfare credits last month. This brings the total to 277,200 - the highest level since September 1996. In the year to November, the Live Register saw an unadjusted increase of 106,864 - a jump of 66.1% and the biggest 12-month increase since records began in 1967. The CSO says that the standardised unemployment rate in November rose to 7.8% from a rate of 7.4% in October. This was the highest rate since April 1998.

The latest figures confirm the worsening labour market trend of recent months. Apart from the sharp fall in construction employment, other sectors like manufacturing, retail, transport, and financial services are starting to show significant declines too. Ulster Bank's economist Lynsey Clemenger says that no sector will be immune from job losses, as the economy sinks further into recession next year.

On a technical note, the estimated unemployment rate in November was 7.8%. Note, however, that the Live Register does not measure unemployment, in itself. It includes part-time, seasonal and casual workers who are entitled to benefit. These people are not unemployed as long as they are in the labour force. The Live Register only helps provide an up-to-date guess, working from the official measure of unemployment in the the Quarterly National Household Survey (QNHS). The QNHS showed 143,500 officially unemployed in July against 226,000 on the Live Register at that time.

Jobs lost in Tuam

A car component factory in Tuam in Co Galway is to lay off 25 of its 260 strong workforce. Valeo Vision Systems, which specialises in the manufacture of in car camera systems, says the lay-offs are as a result of falling sales in the international car industry. Valeo, whose headquarters is in France, employs 61,000 worldwide. It bought the Tuam factory, which was previously known as CEL, last July. In a statement, the company says the job losses will be mainly in the production area of the plant.

Irish unemployment hits 260,000 (6.7%)

Today's unemployment figures from the Central Statistics Office show a seasonally adjusted increase of 15,800 during October — the highest monthly increase ever. The total number of people signing on for unemployment payments or social welfare credits has now reached 260,300, the highest level since 1997.

This brings the increase in unemployment over the past twelve months to 94,600, the highest annual increase ever recorded. Men accounted for 72% of this increase - a clear indication of the slowing construction market.

Redundancies notified to the Department of Trade, Enterprise and Employment were up almost 114%, from last October to this, at 4,644.

Rising unemployment is now serving a double whammy to our public finances because not only are our tax receipts decreasing but also our social welfare payments are increasing. It is estimated that for every 1,000 people joining the live register, it costs the Irish economy €11m.

Bank of Ireland forecasts loss of full employment

The Bank of Ireland published its Quarterly Economic Outlook today. Its outlook for the economy falls into line with other recent forecasts. The main points are:

• The falloff in house construction, high oil prices in the first half of 2008 and the global credit crunch will lead to a decline in our GDP of 1.6% this year, the first decline in national income in 25 years. They said they cannot forecast the fall in GDP in 2009.
  

• Exports will provide the only substantial support to economic activity.

• There are two positives that may restore some confidence - dropping oil prices and lower interest rates.

• Unemployment will go over 7% next year, moving the Irish economy away from full employment (160,000 or fewer unemployed) for the first time in a decade.