Tuesday, January 26, 2016

26/1/16: 'More than 1,000 jobs per week' Government Claims v Reality

One senior TD and a Junior Minister with position relating, indirectly, to employment and the labour market has just posted an interesting statement. A part of the statement goes thus: “we used the Action Plans for Jobs process to drive job creation, creating more than a 1000 jobs a week”.

Now, let’s raise two points. One philosophical, another purely arithmetic.

Philosophically, I am not aware of any Government that claims creation of jobs. Technically, public jobs are either created by the Civil Service or another Public body, as opposed to the Government itself. Practically, any jobs creation, in public or private sector is enabled by the economy (people working in, investing in, paying taxes in and interacting with public and private sectors) and not by the Government. Thus, Government may facilitate jobs creation by enacting supportive legislation or providing legislative and/or regulatory strategy, or not impede one, but it cannot create jobs. Minister can act as PR middle(wo)men and announce jobs created, but that is about as close to jobs creation as they ever get.

Aside from this, there is a simple matter of arithmetic.

Recall that the current Government came into power at the end of 1Q 2011. Let us suppose the Government really got down to ‘creating jobs’ by 1Q 2012. Which means the Government has been at its jobs game for roughly 14-15 quarters through 3Q 2015 or, at the lower end 3 years and a half. That means that the Government should have created “over” 182,000 jobs in that period. This benign to the Minister claim, because if we are to look at the record of the entire duration of the Government, his claim would have equated to roughly 221,000 jobs created.

Let us note that 1Q 20912 was the lowest point in employment levels during the crisis, so comparatives to that base should improve Government position: prior to 2Q 2012 jobs were being destroyed in the economy, past the end of 1Q 2012 they were being added.

Keep the two numbers in your mind: we are told that the Government has ‘created’ either more than 182,000 or more than 221,000 jobs over its tenure, depending on where one starts to count.

Now, consult CSO QNHS database - the source of official counts for numbers in employment. Between the end of 1Q 2012 and 3Q 2015 (the latest for which we have data), total employment rose 158,000. But wait, these are not all jobs. 4,500 of that increase is in the category of Assisting Relative. And 121,200 of these additions are employees, including schemes. Beyond this, the above increase also includes 30,100 new (added) self-employed with no employees.

It is hard to assume that the Government can claim it 'created' self-employment jobs where there is not enough activity to hire staff, or that it increased the need to help relatives.

So put things together in a handy table:

Numbers speak for themselves. By the very best metric, Government is more than 1/2 year shy of the lowest end of the claim of 'more than 1,000 jobs created per week'. It is more than 1/2 year shy of the claim that there were '1,000 jobs created per week'.

This Government deserves credit for helping sustain conditions for the recovery. Some of these conditions trace to the policies put in place by its predecessor and continued by the present Government, some are down to Troika and implemented by this Government, some are undoubtedly facilitated by the efforts of the current Government. The economy is recovering and, by some metrics, very robustly. And jobs are being created by the economy (yes, by entrepreneurs, enterprises, their employees and their clients and investors, but not by the Government).

This is not to take away from the positives the Government should rightly claim. But it is to point out that some of the outlandishly bombastic claims are not quite warranted.

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