The last couple of years have been a disaster with respect to employment. If it wasn’t for emigration, the unemployment rate would be undoubtedly be above 15%. In November 2007, as we coasted into the crisis, the unemployment rate was 4.8% with 169,700 people on the Live Register. In November 2010 the unemployment rate was 13.5% with 438,800 people on the Live Register. That’s a 258% increase in those signing on the Live Register. Yesterday a number of news sources were reporting data from the Small Firms Assocition (SFA), KavanaghFennell accountants, Vision Net, and the IDA.
The SFA noted that 1,075 jobs were lost every week in 2010, over 60,000 redundancies being reported to DETI. 38% of those jobs were lost from the services sector, with 20% lost from manufacturing. KavanaghFennell reported that more that 4 companies a day went out of business last year, with 1,525 Irish businesses declared insolvent, a rise of 8% on 2009. Of these, 30% (472) were construction-related companies, 279 were service-related companies and 177 were in retail. Vision Net reported that liquidations declined by 8pc, but remained over 2,000 (57% of which were declared insolvent).
On the plus side, Companies’ Registration Office reported that 14,015 limited companies were incorporated in Ireland during 2010, an increase of 4.7% on 2009. In addition, IDA Ireland companies created 10,897 new jobs last year, with 126 FDIs secured. Unfortunately, 13,066 companies were dissolved in 2010 and there were 9,545 job losses in IDA-supported companies. In effect, it was a year of employment stabilization with only a year-on-year increase of 11,800 on the Live Register, and the number of companies operating in the country remaining roughly the same.
The absolute priority for 2011 and the incoming government has to be job creation, either through attracting in new FDI, helping indigenous companies expand, or enabling and encouraging new start-ups. For the past couple of years job creation has been paid little more than lip-service, with attention focused on the bank bailouts and public finances. We now need to focus on the real economy, getting credit flowing to business and putting in place schemes and programmes to get people back to work. This needs to be the year of job creation.
Rob Kitchin
Ireland after NAMA 
January 5, 2011 at 2:34 pm
Credit for business? No chance, as banks are destroyed …..
What we need is lower prices of land so it can be used for good. Instead, we have NAMA!
Government cannot create employment. Successful enterprise alone can do that. As the artificial stimulus of a credit boom is removed and then the payment of interest on additional debt taken on by the government means higher taxes, people will cease to spend. They will save, cutting revenues for good businesses and sending bad ones off the pitch.
People who do not understand what excessive credit does to an economy will pay with misery.
January 5, 2011 at 6:04 pm
Government will not directly create employment, given it is cutting its own number of employees, but it can provide stimulus and programmes to create employment – Enterprise Ireland and IDA are examples of agencies that help create and attract jobs. Every state aids businesses in all kinds of ways, providing grants, start up funds, guidance, etc. There is barely an innovation in the market that has not received some subsidy from the state. It is a fallacy to think that leaving things to the market will solve our problems. The state has to take an active role.
January 5, 2011 at 2:58 pm
Agree with all you say, Rob – except with your use of the term ‘real economy.’
This is an expression used by those who want to suggest that activity in the public sector does not contribute to economic output and growth. Like ‘Ireland Inc.’ it’s one of those terms that have snuck into our everyday usage, contributing to the impression that a particular political/ideological standpoint is ‘common sense.’
January 5, 2011 at 6:06 pm
Jane, agreed. What I meant here was the economy away from the banks. Of course, the public sector is an important part of the labour market in every state, and provides huge benefits and subsidies to business in the form of systems, services, trained labour, infrastructure, etc.
January 6, 2011 at 10:52 am
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January 6, 2011 at 3:54 pm
The Government is hugely influential in creating jobs, indirectly and directly. Public Sector jobs are paid out of Private Sector taxation, so they in no way contribute to GDP/GNP. In fact, higher spend by Government reduces the value of the economy as a whole.
Ultimately, jobs that are related to export are of the most important to Ireland, whether FDI or not. Encouraging people to go into businesses that compete in Retail, Food & Beverage and local services, will in many case just displace jobs or at best cut the margin for everyone else. This works fine for Accountants, Solicitors, Entertainers, Sports Professionals who command large fees but it has dire consequences for the Clothing and Food retail sector, where the increase in supply doesn’t increase the amount spent – i.e. the amount of money spent between them diminishes as the number of vendors grow.
The government has a vast role to play: It controls the minimum wage, import duties and taxation. While we cherish our low Corporation Tax, many services based companies find that they can employ people in other EU countries at a lower Gross cost because the higher rates of tax are lower – this is going to be an important argument for Ireland going forward.
THE BIGGEST controls our Energy pricing and distribution system. A responsibility they shirk often and manage badly, but something like the Spirit of Ireland. This has the potential to cut our imports of fossil fuels in half in just 5 years. Rather than sending out the hundreds of millions we do, we could stand to reduce the dole que by ha quarter. Doing this would create more local spend for those local jobs that don’t export themselves. If we stepped this up and created support for Bio-fuels, not only would farm prices go up but we could export energy to the UK who will be facing a shortage in the next 10-15 years.
But we won’t. The Irish Government, like the Irish people (I am one of these) has an unhealthy approach to Capitalism : we want the private sector to make money but we want to limit how they do that and we want to promise everyone all kinds of unaffordable luxuries that even Communists wouldn’t try, like free housing, free education, free satellite tv, free water – yet the most capable who can make money are capped out of jealousy