5/8/15: Irish monthly Unemployment Rate remains stuck at 9.7%

CSO data on estimated unemployment (that used to be released with Live Register) shows estimated unemployment steady at 9.7% in July, for the third month in a row.

• Officially, there were 208,900 unemployed 15-74 year olds in Ireland in July 2015, up 300 on June 2015. 3mo average through July is at 208,833 against 3mo average through April 2015 at 211,833, an improvement of 3,000 on 3mo average basis. Compared to July 2011, there were 107,500 fewer officially unemployed in Ireland. Compared to July 2014, number of unemployed in Ireland fell 32,400.
• However, factoring in those participating in State-established Activation Programmes, number of unemployed in Ireland stood at 289,788 (estimated using lagged data for Activation Programmes participation) in July, down 77,658 on July 2011 and down 16,128 on July 2014.
• There were 37,600 younger unemployed in Ireland in July 2015 (15-24 year olds), up 700 on June 2015 and down 8,200 on July 2014. The number of younger unemployed declined 28,500 compared to July 2011. 3mo average number of younger unemployed through July 2015 was 37,233 against 40,300 average for the 3 months through April 2015. 

• Estimated unemployment rate for 15-74 year olds stood at 9.7% in July, unchanged on May and June, down on 9.8% in March and April. Unemployment rate is down 5 percentage points on July 2011 and 1.5 percentage points on July 2014. Last 4 months marked the slowest sequence of declines in unemployment rate since March 2014.
• Estimated unemployment rate for younger workers was 20.2% in July 2015 compared to 19.9% in June 2015. The unemployment rate declined 8.4 percentage points compared to July 2011 and was down 3.4 percentage points on July 2014.

The key point is the slowdown in the unemployment rate reductions. Over 2012, average monthly rate of reduction in unemployment was 0.083%,  this rose to 0.153% average over 2013 and 0.167% over 2014. So far, over 7 months of 2015 the average monthly rate of unemployment rate decline was 0.071%.

9/10/2014: Where Did Ireland's Young Ones Go?..

ECB Monthly Bulletin for October: https://www.ecb.europa.eu/pub/pdf/other/art1_mb201410_pp49-68.en.pdf has a nifty chart, mapping proportion of younger people who are not in employment, education or training:

So guess what... Ireland has 3rd highest inactive population of younger people as proportion of total population - in other words, those who are neither unemployed, nor in education or training. And Ireland had the 3rd highest inactive population of the younger people back in 2007 too.

What on earth are these young people doing?! Working in the black economy?

21/7/2014: Why a Wave of Low-Pay Public Sector Jobs Applications?

Employment stats and claims have puzzled many in recent months. Government claimed variable numbers at different points in time, ranging between jobs created at 61,000 to 67,000 and so on. Much analysis has been provided of these claims and other numbers on this blog and many other, often divergent, often close-enough and so forth. All, however, points to the fact that jobs are being added in the economy and that at least some of the declines in unemployment rate are down to new positions being posted and filled.

Which raises a hugely surprising question: if private sectors jobs are being created, why is there such a huge surplus of unemployed applying for jobs in the private sector? Evidence of the latter is not systematic and not regular, but here is one snapshot: http://www.independent.ie/irish-news/news/28500-scramble-for-civil-service-jobs-at-11-an-hour-30444949.html

Note that the public sector jobs being rushed-at are not at the top or even the middle of pay & perks distribution. These are roughly EUR11/hour jobs, at the bottom of the career ladder and the recruits face the prospect of:

1. Higher taxes,
2. Lower non-wage benefits, 
3. Increased workloads (compared to the incumbents and past employees), and
4. Prospect of slower career progressions (early retirements took out a large share of senior employees and their positions are being filled internally, without any prospect of younger recruits qualifying for them).

One answer is that for all the changes in employment stats we had over the recent months, we still have huge levels of unemployment and underemployment as the legacy of the crisis. On underemployment side, take the percentages of workers in working less than full-time hours as a share of total employment pool. In Q1 2008, 7.5% of all workers in employment worked less than 20 hours/week, in Q1 2014 the percentage was 8.1%. Over the same period of time, % of workers working 20-29 hours per week rose from 10.9% to 12.8%, percentage working 30-34 hours per week rose from 4.3% to 4.5%. Percentage of workers working more than 35 hours per week dropped from 66.4% to 61.9%. Counting in those working less than full-time hours and those on variable hours, 38.1% of our employment pool are not in full-time employment against 33.6% back in Q1 2008. 

In Q1 2008, there were 113,600 individuals who considered themselves underemployed, in Q1 2014 the number was 258,100. And there are 46,500 more people who are working part-time and consider themselves underemployed today compared to Q3 2008 (earliest we have data for), while numbers of working-age adults not in the labour-force are still up 121,300 on Q1 2008.

And in the core age categories, applying for these jobs, the percentage of 15-24 year old unemployed relative to total population of that age group was 9.58% in Q1 2008. This stood at 25.31% in Q1 2014.

In other words, it is easy to forget that things are still very ugly when it comes to employment situation in Ireland.

2/7/2013: EU Youth Unemployment: Promises of Urgency Urgently Promised

After much hoopla about the need to do something about youth unemployment, the EU leaders have managed to produce a strategy to do something about youth unemployment. As strategies go, this one is about as likely to deliver on the objectives (which remain undefined in any real tangible sense) as all other EU strategies. But, the good news is, the EU has managed to agree the strategy with the social partners.

So here;s the link to the EU's "comprehensive approach to combat youth unemployment": http://consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/137634.pdf.

The promise is to "speed up implementation of the “Youth Employment Initiative”, which should be fully operational by January 2014, and concentrate spending in its first two years". Now, wait a second, the EU already has a strategy to combat youth unemployment? Yes, it does. And the new over-hyped 'initiative' is to… speed up the old overhyped initiative that worked marvellously so far. Yes, it is.

And there is more: the EU "will also speed up implementation of the “Youth Guarantee”, which is designed to get young people who are not in education, employment or training back to work or into education or training within four months". So again, speeding up the past well-working initiatives is apparently makes for a new initiative, which, of course, will be even better working.

"In addition, unspent funds from the EU budget will be reallocated to support employment, especially for youth, as well as innovation and research. This is made possible by the flexibility of the EU budget, or Multi-annual Financial Framework, for the next seven years." What that? Ah, that will be EUR6 billion that the EU now plans to spend over 2 years to… yes… right… combat youth unemployment.

Perspective: in May 2013, 5.525 million young persons (under 25) were unemployed in the EU27, of whom 3.555 million were in the euro area. So that works out at EUR543 per unemployed youth. Overwhelmingly bold move by Europe, then, to combat the crisis…

Perspective: 26.522 million men and women in the EU27, of whom 19.340 million were in the euro area, were unemployed in May 2013. The other urgent crisis the EU faces, the banking crisis, has cost so far some EUR740bn (http://trueeconomics.blogspot.ie/2013/04/2342013-updating-cost-of-banking-crisis.html) and that runs at around EUR27,901 per each unemployed (not just youth unemployed) in EU27. Let us assume that these net liabilities are at least partially recoverable (you know, those AIB shares are worth something, and the bad loans in bad banks are not all completely and totally bad), so let's say the figure is more like EUR13,900 per unemployed.

Perspectives 1 & 2 imply the relative urgency in the EU strategic responses to the crises as follows (higher number = higher priority): Banks : Unemployed at 12:1.

With that in mind, recall that the "European Council also agreed on measures to promote cross-border mobility, including for vocational training. The “Your First EURES Job” programme will be strengthened and the “Erasmus +” programme should be fully operational from January 2014. High-quality apprenticeships will be promoted via the European Alliance for Apprenticeships to be launched in July." Sounds good? Of course it does, because one might think the programme is going to result in inefficient apprenticeships systems in countries like Portugal or Ireland becoming Swedish-styled or Austrian-styled super-efficient? Not really. This is more about Apprenticeship Programmes Administrators talking to their colleagues at more junkets. So chop down that EUR543 per young unemployed dish-out by few bob to cover the cost of 'cross-border mobility' of junkets.

But do read the document the EU produced, as linked above. it contains real pearls, like the following:

Paragraph 1.1: "All efforts must be mobilised around the shared objective of getting young people who are not in education, employment or training back to work or into education or training within four months, as set out in the Council's recommendation on the "Youth Guarantee". Building on the Commission's communication on youth employment, determined and immediate action is required at both national and EU level."

So basically - no idea what to do here. The Eu leaders admit as much by offering not a single programme solution, but stressing instead that something (anything? whatever?) must be done and that solutions must be 'determined and action is required'.

Overwhelmed yet?

26/09/2011: Youth unemployment problem

The latest QNHS data for unemployment in Ireland - discussed in detail here - was not a pretty picture by any means. But the ugliness of age-breakdown in unemployment is something else altogether.

Now, recall that Ireland is a young country. Per CSO, 1.5% of our workforce is age 15-19, 6.7% age 20-24, 28.9% age 24-35 and a full 37.1% of the workforce is aged less than 35. This has many good implications for the economy and the prospect for future growth, but it also places some tough demands on the economy. You see, young people are quite pesky subjects. They (unreasonably - from our, older folks point of view) want in life:

• Improved prospects for the future as far as their careers, earnings, quality of life etc go,
• Good chances for beating their parents performance in terms of gaining jobs and progressing up the career ladders,
• Ability to enjoy some of younger years' offers of decent consumption, comforts of some certainty in life, while earning returns to their efforts and education.

Not exactly an easy bunch to satisfy, younger people tend to be more mobile. And the greater their skills set / potential, the more they invested in education or training, the more mobile they are. This is why, in my view, the idea of the 'demographic dividend' is a bit of a silly old hat - the dividend is there (or rather here, in Ireland) if and only if the asset is here.

But the QNHS data does not lie (well, kinda - it does lie in so far as it underestimates true extent of unemployment by omitting those over-extending their education and training in the absence of jobs). The assets we have in the form of our younger people are... err... extremely highly jobless, pretty much deprived of hope of gaining any of the above points.

Here are some stats, all from QNHS for Q2 2011.
Overall,

• 38,400 males of age 15-24 and 116.2 males of age 25-44 were unemployed in Q2 2011
• 25,100 females aged 15-24 and 53,900 females of age 25-44 were also unemployed in Q2 2011

However, these absolute numbers do not tell the entire story as the size of the labour force itself has been changing over time (shrinking). In terms of unemployment rates:

• Overall unemployment rate for those under the age of 20 is now at 40.1%, implying that a person aged 15-19 who wants to be employed is facing 2.8 times higher probability of not having a job than an average person in the workforce. For the age group of 20-24 years of age, these numbers, respectively are 27.7% and 1.94 times. For those in their prime employment years - 25-34 year olds - the numbers are 16.5% and 1.16 times.
• A woman of age 15-19 is facing unemployment rate of 33.7%, while her slightly older counterpart of age 20-24 is facing probability of unemployment of 21.8%.

Dramatic as the above figures are, the picture is much worse for males:

• A young male of age 15-19 seeking employment is facing unemployment rate of 46.1%, while a male of age 20-24 is facing the prospect of 33.7% unemployment. Unemployment amongst males age 25-34 is 21.5%.

This is desperate, folks. But it gets worse. per Table S9b in QNHS, in Q2 2011, of all persons aged 18-24:

• 79% of all early school leavers were either unemployed or not economically active a number that rose from 77% in Q1 2011
  
• 59% of all other persons in this age category were either unemployed or not economically active, same as in Q1 2011
  

For comparison, for all persons 25-64 years of age, the above numbers were:

• 55% of all early school leavers either unemployed or not economically active, up from 54% in Q1 2011
  
• 27% of all other persons either unemployed or not economically active, down from 28% in Q1 2011.
  

This is a dire prospect for our 'demographic capital', folks, as it shows that the gap by age for even educated unemployed is a vast 22 percentage points - statistically most likely indifferent from the same gap for those with little or no education.

Economics 22/02/2010: Detailed analysis of Live Register

Updated (below)

CSO published its analysis of the Live Register Data for 2009 which shows some interesting details.

Per CSO data, reproduced below, the highest risk of unemployment by sector was found in:

• Construction (with LR contribution from the sector reaching 170% of the sector own contribution to total employment);
  
• Hotels and Restaurants (with Live Register contribution from the sector standing at 161% of the sector weight in overall employment);
• Other Production Industries (136%);
• Financial & Other Business Services (131%) and
• Wholesale & Retail Trade (120%).
  

All state-dependent or provided jobs were the safest ones (see above marked in blue bold).

Update: since both Health and Education sectors are heavily reliant on public sector workers, we can consider a broader definition of the Public Sector to include the above sectors together with Public Administration & Defense. In this case, broader PS accounted for 23.1% of total employment in Q4 2008 and 6.9% of total number of new LR signees in Q1 2009, implying a 29.9% relative incidence of unemployment by sector - a number that is more than 3 times smaller than the average for the entire economy.

The above relative incidence number for the broader PS is actually biased in the direction of overstating the overall incidence of unemployment in the PS, as a number of employees who lost their jobs in Health and Education sectors were most likely from private firms providing these services.


And here is another table, also slightly adjusted by me. This time around, I am adding several categories together - people who are left on the Live Register (aka the Unemployed), people who moved from the LR to illness benefit (aka also the Unemployed), people who have retired from the Live Register to a state pension and people who are unaccounted for (aka - emigrants who left Ireland, immigrants who left Ireland and people who just dropped off Live Register into gray economy 'entrepreneurship').

Notice couple of things here - virtually the same number of foreigners and Irish who have joined LR in Q1 2009 stayed in some sort of 'Unemployment' by the end of Q2 2009. Actually, this percentage was slightly higher for the Irish LR signees, but the difference does not appear to be statistically significant.

Those over age 25 tended to remain on LR with higher probability than those who are under 25. The trick part here is that many under 25-year olds went off to training and education, dropping off the LR. One hopes they will have a job to go to, once their Fas-run courses and college programmes end.

Males were more likely to remain broadly unemployed (83.46%) than females (80.26%) but the difference is small and there are several factors here. One might wonder how the birth rate increase affects this number and also how it depends on transition to single parent family supplement. Also, younger women are more likely to undertake new training and education than younger males. Can these three factors explain the difference between men and women in re-employment rates?

Once we look at differences across sectors, one striking detail shown in the table above is that sectors with higher wages and better jobs are suffering the largest non-returns to jobs by the Live Register Signees. Table below details:
So in the nutshell - the jobs our LR signees are getting after they lose their primary occupation are of poorer quality and in less productive sectors.

Economics 30/09/2009: Unemployment crisis continues

Per CSO release today: “The seasonally adjusted Live Register total increased from 428,800 in August to 429,400 in September, an increase of 600. In the year to September 2009, there was an unadjusted increase of 183,422 (+76.4%). This compares with an unadjusted increase of 192,672 (+77.9%) in the year to August 2009.”

Are things improving? Declines in LR appear to point to two major factors at play here:

• Main sources of layoffs are flattening out, including construction and retail services. This is a sign of stabilization, but it is not a sign of impending improvement, as likelihood of these sectors aggressively rehiring staff is slim in the foreseeable future;
• Large movements from the LR are also a function of more people dropping out of the labour force and signing up for welfare benefits, while ceasing job searches.
  

“The average net weekly increase in the seasonally adjusted series in September was 150, which compares with a figure of 1,350 in the previous month. The standardised unemployment rate in September was 12.6%” - flat on August.

“In the month, the estimated number of casual and part-time workers on the LR was 38,268 males and 32,590 females.” In August, the same figures were 37,749 males and 32,354 females. And so on: table illustrates
How do you explain this? A friend of mine used to be a broker, now drives a taxi. Per official stats, he is doing fine. Per his own state of mind, he is doing the necessary thing to survive. This is the difference between voluntary under-employment and self-employment and its forced version. CSO’s latest figures show the latter.

So per some commentators out there, “the unemployment rate, which didn’t rise this month – the first time that has happened since December ‘07” and this is an improvement. For me, this is like telling someone who’s house just burnt down that all’s fine – there won’t be another fire for a while.

I am still sticking with 14-15% forecast for 2009 peak unemployment, though it might be looking like a bit downside from 14% is possible. Who know – Christmas season (aka desperation levels in retail sector) will tell.

Now, to that other pesky issue – labour force participation. One issue of growing importance is youth unemployment. This is contracting per LR figures. But this contraction is likely masking two factors at play:

1. there is significant seasonality - much of youth employment is part time and linked to higher activities in summer months (hotels, recreational etc sectors), plus
2. there is a number of those who are simply dropping out of the labour force (either those who would have joined, but are not joining now that the jobs evaporated, or those who have been out of work for over a year and stopped searching, or those who have gone back to school or who continued in school transitioning to a new programme).
   

Per QNHS released earlier this month: "Almost all of the decline in the size of the labour market is attributable to a decline in participation of almost 36,000.” Now, remember, that was for Q2 2009 – pre summer months. “This is shown by a fall in the participation rate from 63.7% in Q2 2008 to 62.5% in Q2 2009.” To me, this indirectly confirms that drop-outs from the labour force are most likely to be our younger workers. In QNHS see Table 9: labour force participation rates have fallen by age group as follows for April-June 2007 to April-June 2009:

• 15-19 age group from 29.1% to 22.1% (7 percentage points down)
• 20-24 age group from 77.0% to 73.6% (3.4 percentage points down – less than half of decline in younger category)
• 25-34 age group from 85.5% to 84.7% (0.8 percentage points down)
• Economy-wide from 64.0 to 62.5% (1.5% percentage down)
  

So youths are dropping out of labour force at a rate nearly 5 times those of the average decline.

Hmm… things are improving, rapidly. Dom Perignon 1988 uncorking time, yet?