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News : Irish Economy Last Updated: Jun 11, 2013 - 9:05 AM


Irish Economy 2013: Unofficial rate of unemployment remains over 20%
By Michael Hennigan, Finfacts founder and editor
Jun 10, 2013 - 6:52 AM

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Persons on publicly-funded activation programmes are not counted as part of the monthly Live Register.

Irish Economy 2013: In recent weeks, there have been apparent glimmers of optimism in unemployment data but it's well to keep in mind that the unofficial or broad rate of unemployment is over 20%. The official rate is 13.7%

The IMF (International Monetary Fund) in its latest review of Ireland's bailout programme, warned in April that the country faces "an acute unemployment crisis" saying the broad jobless rate is at "a staggering 23%" despite emigration.

The US broad rate in May was 13.8% compared with the official rate of 13.8%. The difference comprises involuntary part-time workers  plus marginally attached [persons not in the labour force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the employment survey. Discouraged workers are a subset of the marginally attached.

The CSO's Quarterly National Household Survey (QNHS; pdf) for the first quarter of 2013 showed that while total employment increased by 20,500 in the year to Q1 2013, full-time employment fell by 3,700 or 0.3% and this was off-set by an increase in part-time employment of 24,200 or 5.6%. On a seasonally adjusted basis, employment increased by 7,700 (+0.4%) in the quarter. The seasonally adjusted unemployment rate decreased from 14.1% to 13.7% (the official rate) over the quarter while the number of persons unemployed fell by 6,600 also on a seasonally adjusted basis.

Unemployment decreased by 29,900 (-9.3%) in the year to Q1 2013 bringing the total number of persons unemployed to 292,000. This is the third quarter in succession where unemployment has declined on an annual basis. Long-term unemployment  (12 months or greater) was at 180,500.

The long-term unemployment rate decreased from 9.5% to 8.4% over the year to Q1 2013. Long-term unemployment accounted for 61.8% of total unemployment in Q1 2013 compared with 63.5% a year earlier and 57.5% in the first quarter of 2011.

The CSO reported in its Live Register for May [pdf] that the number of long-term claimants was 192,000.

The total number of persons in the labour force in the first quarter of 2013 was 2,137,500, representing a decrease of 9,400 (-0.4%) over the year. The number of persons not in the labour force in Q1 2013 was 1,457,000, an increase of 10,100 (+0.7%) over the year.

There is a margin of error of about 9,000 in the QNHS data. Annual net emigration exceeds 30,000.

The International Labour Organisation classification used defines:

Employment: Persons who worked in the week before the survey for one hour or more for payment or profit, including work on the family farm or business and all persons who had a job but were not at work because of illness, holidays etc. in the week.

Unemployed: Persons who, in the week before the survey, were without work and available for work within the next two weeks, and had taken specific steps, in the preceding four weeks, to find work.

The Economic and Social Research Institute (ESRI) said in its May Quarterly Economic Commentary on the Q4 2012 QNHS:

"Some caution is due in relation to the latest QNHS data, however, as it is the first survey conducted using a partly adjusted sample of households, based on the 2011 Census of Population. This incremental adjustment ensures that the survey remains representative, and is phased in over time. Based on past sensitivity to such changes, the last QNHS notes that estimates for agricultural employment may have been particularly affected. The survey shows this sector growing by 6,000 (7.1%) compared to the previous quarter. Excluding agriculture entirely, the annual fall in total employment for the fourth quarter of 2012 was 10,600 on a seasonally adjusted basis.. The continued underlying fall in non-agricultural employment is a less encouraging finding than the main results suggest."

The IMF said in April: 

"If involuntary part time workers and workers only marginally attached to the labour force—two groups that registered significant increases—are also accounted for, the unemployment and underemployment rate in Ireland stands at a staggering 23%."

Last week, the Live Register for May showed a total of 421,737.

The total included 88,000 part-time and casual workers - up 60,000 from December 2007.

A former full-time construction worker with a small farm, may never have been classified as unemployed. 

If the 86,000 people, as per the chart above who are in publicly-funded activation programmes (which can be important if administered well) were included on the Live Register, the total would be a stunning 507,000 -- 24% of the workforce.

So when ministers brag about rising job numbers, do what Gaius Plinius Secundus (AD 23 – AD 79), the Roman philosopher, advised: "addito salis grano" (add a grain of salt).

Near stabilisation is not a recovery.

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