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News : Irish Economy Last Updated: Jul 29, 2014 - 3:40 PM


Irish Economy: Bruton and politics of jobs numbers; How to add 50%
By Michael Hennigan, Finfacts founder and editor
Jul 26, 2014 - 8:58 AM

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Irish Economy: Richard Bruton, jobs minister, on Thursday said in a statement that “70,000 jobs have been added across the economy in the past 18 months" -- this was a claim that on the face of it related to January 2013-June 2014 and it was curious that the ministerial mantra/ talking point: "5,000 jobs...being created every month," which had become defunct on May 26, was now stretched over 18 months. In addition the claimed number of jobs added is 50% above what the Central Statistics Office (CSO) raw data suggest.

The 5,000 jobs per month related to the 2013 calendar year but on May 26 the CSO's Quarterly National Household Survey (QNHS) data for the first quarter showed that the 12-month rise in employment had fallen to 43,000.

The CSO had warned in respect of 2013 that the rise of 26,800 in employment in 'Agriculture, forestry and fishery' was subject to caution but ministers were not concerned with caveats.

Irish Jobs Data 2013/ 2014: Finfacts' doubts were proven right; Bruton was wrong - - I raised the issue of the 2013 data at a press conference I attended when I was back in Dublin last April. The minster emphatically rejected the points I made and his press handler made sure that he could not be pressed on the issue.

The Department told Finfacts on Friday:

"The following reply is attributed to a spokesperson from the Department of Jobs, Enterprise and Innovation.

According to CSO QNHS data, in the 18 months up to March 2014 (the most recent quarter for which statistics are available), 69,600 jobs were added across the economy."   

As can be seen from the chart above, employment was at 1.888m in Q1 2014 and 1.841m in Q3 2012 resulting in a rise of 47,000 jobs.

Where did the 70,000 jobs come from?

The Department added together the seasonally-adjusted data for six quarters resulting in a 50% rise in the reported numbers compared with the CSO's actual employment estimates in Q1 2014 and Q3 2012.

Seasonally adjusted figures account for seasonal factors in time series.

For example employment in a 12-month period peaks in summer while January has more working days than December.

So the summer employment peak is discounted to enable other trends to become evident while in another month or quarter the employment level is raised above the actual level.  

The CSO's 12-month raw jobs data are usually in line with the seasonally adjusted 12-month data.

However, as a measure of net jobs growth, adding seasonally adjusted data for six quarters, produces a distorted result.

On the 47,000 jobs that were added, 'Self employed without any paid employees' accounts for 34,000 while a rise in activation scheme numbers accounts for another 6,000.

Relative to March 2011 when the current governing parties assumed office, employment has risen by 46,000.

'Self employed without any paid employees' accounts for 29,000 while the number of the unemployed in activation schemes increased from 71,000 to 85,000 - - the number of unemployed classified as in 'Back to  Education' courses was stable at 29,000 in March 2011 and 28,000 in March 2014.

Activation programmes thus account for a rise of 15,000 in the unemployed who are counted as employed.

The number of employees + self-employed with employees was 1.628m in 2011 and 1.643m in March 2014 -- the difference of 15,000 is entirely accounted for by activation scheme members.

We can reasonably assume that many of the 29,000 who run one-person operations hanker for proper work.

Bruton said at a press conference Thursday according to the Irish Times that "at this stage between 50-65,000 jobs had been created but that more needed to be achieved" since the so-called Action Plan for Jobs had been launched in February 2012.

Using December 2011 as a base with total employment at 1.848m, there was  a rise of 40,000 by March 2014 - - 30,000 relates to self-employed with no employees.

The number of employees + self-employed with employees grew by 5,000 - - but activation employees ex-education course attendees, grew 4,000 while the 'Assisting relative' category expanded by 5,000.

In summary, the plan is not an engine for real jobs.

We expect jobs growth to continue but there has been no economic miracle so far and in March 2014 the number of paid employees (excluding schemes) was below the level in the bailout (fourth quarter) quarter of 2010.

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