New generation of workers find unemployment a shock

For the first time since the Celtic Tiger was born, a new generation of workers is coming to terms with the sort of insecurity…

For the first time since the Celtic Tiger was born, a new generation of workers is coming to terms with the sort of insecurity that was endemic in the Irish labour market of old. If anyone was in doubt the record jump of 7,500 (seasonally adjusted) in the live register in November shows we were well and truly over the hump of the roller coaster and on the way down.

The seasonally adjusted figures for unemployment have been rising almost continuously since April and they are now rising in absolute terms as well. The unadjusted total of 147,121 is the highest since August 2000. December and January will be worse because of seasonal factors.

Many commentators prefer to measure unemployment by the National Household Survey (NHS). These figures, although only available up to the third quarter of the year, show an increase of 12,700 in those claiming short-term benefits and 1,600 in the number of long-term unemployed.

This is the first year-on-year increase since 1996, when rising gross national product (GNP) finally began to make inroads into unemployment.

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As the cut-off date on the NHS figures is September 30th, they clearly indicate the slowdown was well under way before the September 11th attacks in the US.

What is new about the return of unemployment is that the long-term unemployed and low-skilled groups are being joined by middle-income earners.

Last month, the number of people claiming unemployment benefit increased by almost 3,700 while those on unemployment assistance, or long-term unemployed, rose by 1,500.

The contrast is even more striking over the past year. In the 12 months to November 30th, the number of short-term unemployed rose by 13,446 while the number of people drawing long-term benefit fell by 2,579.

Workers from tourism and construction, traditionally seasonal and cyclical industries, are being joined by casualties of the first slump in the new ICT (information and communication technologies) sector.

Tourism job losses are hard to quantify. However, the chief executive of the Irish Hotels Federation, Mr John Power, puts the figure at between 6,000 and 7,000.

At present, the home market is providing a seasonal boost but he warns the losses could rise to about 15,000 next year if domestic, British and European tourists do not make up for the expected US shortfall.

The impact of the recession on construction is only just beginning in Dublin, but in the south, midlands and west more than 10 per cent of the workforce has been laid off in recent weeks. Housing production has slumped and the National Development Plan (NDP) may not be the panacea some had hoped.

Increasing international competition means that foreign firms, bringing foreign workers in some cases, will probably secure a significant share of NDP contracts.

The Construction Industry Federation (CIF) has developed a policy of joint ventures between foreign and indigenous firms. It has also reached agreement with the building unions that agency workers, many of them foreign, should receive the same pay and conditions as Irish workers. Whether this will be enough to avert large-scale use of cheap labour from countries such as Turkey - with a high risk of a racial backlash - remains to be seen.

In the ICT sector, about 10 per cent of the workforce, or 10,000 people, have lost their jobs, 80 per cent of them in foreign firms. These are the new unemployed.

Ms Noeleen Hartigan of the Irish National Organisation of the Unemployed (INOU), said the organisation's welfare rights team "daily receives calls from people who are about to loose their jobs. When we tell them that, including the budget increase, their income on unemployment benefit as a couple will be just over £155 or €197 per week they are shocked".

Some of those seeking advice are young couples from the ICT sector.

Even though both have been working and paying full PRSI for years they are only entitled to 1.6 times the unemployment benefit rate.

"This is a great shock to many people who believe that having paid their stamps, they should be entitled to a payment in their own right.

"Our staff also have to tell people that their unemployment payment only increases by £13.20 a week if they have a child."

The Government has been slow to respond to the changing scenario. In the Budget the Minister for Finance Mr McCreevy raised dole payments by £8 a week, just over half the £14 being sought by groups such as the INOU. It falls far short of the 27 per cent of average industrial earnings target set by the Programme for Prosperity and Fairness working group on social welfare.

Nor was there any increase in the rate of statutory redundancy or the tax threshold of £20,800 for redundancy payments. The tax threshold was only £10,400 until last April.

It was raised then, primarily to help resolve a major dispute at Tara Mines, but the figure is still very low in a situation where increasing numbers of well-paid workers face the dole.

SIPTU general secretary Mr John McDonnell has been campaigning for many months to raise statutory redundancy payments to at least three weeks' pay.

At present, workers under 41 years old are only entitled to half a week and workers over 41 to one week.

Until recently the norm for redundancy payments in most closure situations was around six weeks pay per year of service, irrespective of age, but the figure appears to be falling.

As the prospect of life on the dole becomes a reality for growing numbers of people, issues of unemployment, including dole payments will move up the political agenda.