Irish Economy 2014: Enda Kenny, taoiseach, on
Tuesday again reaffirmed that full-employment will return in 2020 and while a
forecast that far ahead has no credibility in these uncertain times, it could be
a credible goal if supported by a strategy that is bullshit-free. One key
question would be on the 2000-2013 jobless exports boom and if it's realistic to
assume that the coming years will be different from the past.
Full-employment is defined by the Department of
Finance as in the range of 5 to 6% - - Austria and Germany had harmonised rates in January 2014 of 4.9% and 5.0% respectively.
Given the natural growth of the workforce and the
slowing of emigration, about 300,000 additional jobs would be needed to achieve
There were 180,700 on the Live Register for
a year or over at the end of February 2004 and given the poor record of skills
training for the unemployed, the jobless rate could remain high despite a
reasonable level of job creation.
In 2013, 25% of the 61,000 additional
jobs reported last week, went to foreign nationals, and if the Central Statistics Office's category
allocation remains unchanged, 72% of additional jobs were in agriculture, forestry and fisheries
and tourist activities, while in the information technology sector that is
export oriented, jobs slightly fell.
the document [pdf] that was published yesterday outlining the Government's
'achievements,' it says: "The tourism sector also offers the potential of tens
of thousands of extra jobs across the country."
There were 134,000 people employed in accommodation and food service activities
at end 2007 and 136,000 at end 2013.
A mantra of Irish economists as services exports
surged year after year was that the development suggested a "move up the value
chain." In 2012 services exports overtook merchandise exports for the first
The official line from ministers including
Michael Noonan, finance minister, was that the surge reflected improving
The truth was that the rise mainly reflected
massive corporate tax avoidance with companies such as Google diverting over 40%
of its global revenues to Ireland and Microsoft, the pioneer services group in tax avoidance
booking about one quarter of its global revenues in Ireland.
More than 40% of Irish services exports are virtual or effectively fake.
Meanwhile, with pharmaceuticals / medical devices
accounting for up to two-thirds of the value of merchandise exports until the drugs patent cliff, jobs
numbers remained static in these industries for many years despite rising output.
The employment data in the chart above relates to
both foreign-owned and indigenous client firms of public enterprise agencies,
that are producing internationally tradeable good and services.
Based on statements by IDA Ireland and Enterprise
Ireland last January, a total of 12,000 jobs were added by client firms in 2013,
leaving employment numbers at the end of the year still below the level of 2000.
In 2001-2007, the years of the property bubble,
indigenous trading firms which have an export ratio of about 40% added only 10,000
jobs while foreign firms shed the same number.
Indigenous exports account for about 10% of
headline tradeable exports and returns from new markets in emerging economies
are likely to be insignificant in the years to 2020.
In expanding export horizons, developing new export markets for indigenous firms
will take many years and it would take a lot more imagination and persistence
than improving commerical services in embassies.
Despite what the Irish may wish to believe, we understandably have little recognition
in the world that Kipling called ‘East of Suez.’
Net jobs in the exporting sectors may rise
compared with 2000 when the total workforce was 20% smaller but it would be
unrealistic to expect exports to return to the pre-property boom role as an
Jobs in Ireland's
foreign-owned sector in 2013 below level in 2000
Irish Economy: Full-time jobs
in indigenous exporting firms in 2013 below 2000 level
Economic Strategy 2014-2020: Exports to plunge by €50bn - Parts 1-8 --Part
8: 300,000 net new jobs by 2020 via prayer or strategy?
Irish Economy 2014:
Gilmore launches Lilliputian wish-list on trade and tourism
Irish Corporate Tax 2014: How
official spin and distortion works - in short-term
Note how Irish profits of US affiliates including at Irish companies in West
Atlantic tax havens, increasingly diverged from employee levels in Ireland:
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