Only a third of accommodation workers in early 2020 were with same employer after Covid

Two-thirds of people who worked in the accommodation sector in early 2020 were no longer working with the same employer two years later, according to a paper looking at the impact of Covid-19 on the labour market.

In a comprehensive overview of changes in labour practices in Ireland between 2019 and last year, the independent Parliamentary Budget Office (PBO) found that 30 per cent of people who worked in hospitality accommodation before the pandemic had moved to a different sector by the second quarter of last year.

The report, An Insight into the Labour Market from 2019 to 2022, gives a detailed picture of the churn that occurred in many job sectors during and after the pandemic. The hospitality sector was hardest hit, with employment falling 40 per cent. The other two sectors most affected were construction (16.5 per cent decrease) and retail (down 11.5 per cent).

Schemes introduced to assist workers during the pandemic – the pandemic unemployment payment (PUP), the temporary wage subsidy scheme and the employment wage subsidy scheme – cost a total of €20 billion. In all, 900,000 people received PUP, with a further 1.4 million benefiting from the other schemes.

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Some sectors experienced dramatic employment growth amid the pandemic shutdown, according to the report, including ICT and ecommerce, which grew a staggering 75 per cent from 2019 to the end of last year.

“During the lockdown, many low-paying sectors were forced to close, while other, better-paying industries needed staff. The data shows that the ICT sector hired heavily throughout the pandemic, increasing its workforce by almost 30 per cent since [the winter of] 2019,” it says.

[ Labour force figures paint an uneven picture ]

By the end of last year, the economy had fully recovered from pandemic closures, with the unemployment rate lower than it was at the end of 2019, the last quarter before Covid emerged. Young people returned to the labour market in much greater numbers than the over-55s, who found it more difficult to find work and also may have had health concerns.

The report says some 215,000 more people were working in the final quarter of last year than before the pandemic. However, some businesses were finding it hard to recruit staff.

“The job vacancy rate for education, professional, and construction have increased the most since 2019. This is reflected in issues like the growing shortage of teachers, lab workers, and builders.”

The report points out that with 33,000 houses required annually under the Housing for All strategy, an additional 27,500 workers will be needed in the housing construction sector, an increase of almost 7 per cent on the employment levels from 2019-2020.

By the end of last year, Irish hourly wages were 4.2 per cent higher than the same period in 2021, the paper states.

“However, inflation was significantly higher over the period and, as a result, real wages fell by 4 per cent. While rising wages benefit workers in the short term, it can create inflation and even hinder economic growth if firms cannot find workers and deliver the same level of output.”