WHILE it is great to note our seasonally-adjusted unemployment rate falling away down to 4.4% for May, a total of 108,200 people unemployed, which is a year-on-year decrease of 33,200, the pay and conditions under which many of those who are working leave quite a bit to be desired. But, at least, most people find it more attractive to be working than drawing the dole – something that was a problem in the past – so this lowest recorded unemployment rate since February 2005 is indeed welcome.
When one recalls that the unemployment rate was over 15% at the height of the recent economic downturn, the progress made in the area of job creation in its aftermath is to be commended. Richard Bruton’s 2012 Action Plan for Jobs provided the momentum for this and, hopefully, in his latest role, his Climate Action Plan will prove just as successful – although that is a challenge of a much greater magnitude.
During the recession, the employers ruled the roost as regards pay and working conditions, and many workers were even happy to take pay cuts and a revision of their working hours and conditions just to hang on to their jobs. In a lot of cases, depending on the area of employment, the cuts were reversed, but in the private sector in particular, they were not and many people are still working harder for less money, and therefore not feeling any tangible benefit of the economic recovery; to pretend that everything is rosy in the garden right across the board would be disingenuous, to say the least.
People who don’t have powerful unions behind them are not in a position to make strong pay demands to keep them in line with other workers, especially those in the public sector. Most of the cuts suffered by public sector workers – none of whom involuntarily lost their jobs as a result of the recent recession – have been restored, or are about to be, under various agreements their unions have forced the government into, given that they have the power to bring the country to a standstill when they want to flex their industrial relations muscles.
Unfortunately also, the private sector is developing a deeper chasm between the upper and lower echelons in terms of pay. Those in the tech sector, especially people working for big multinationals, can command high salaries at the moment and have greater mobility with their skill set.
However, even though they are well paid, they, too, are finding it difficult to afford rents, especially in and around our cities, with the average monthly rent for a one-bedroomed apartment in Dublin – if you can find one – coming in at around €1,500 a month, well more than double what they were a decade ago. How, then, can someone on low wages afford to live near their work, given that what is described as a ‘living wage’ was recalculated earlier this month at €12.30 an hour, but most low-paid workers just get the minimum wage, which is €9.80 an hour?
In between, of course, we have the ‘squeezed middle,’ which is the majority of working people in the PAYE sector, with people on 90% of the average industrial wage liable for the higher rate of income tax. They pay the greatest share of taxes collected by the government and who seem to bear the brunt of everything as they work, seemingly harder and harder, to meet the costs of rents, mortgages, childcare, expensive commutes, etc.
Now, as they struggle to keep their heads above water, they will most likely be subjected to higher property and carbon taxes come Budget 2020. And, if a disorderly Brexit leads to a more austere budget, there won’t even be any small income tax cuts to cushion the blow.
At a Budget Forum at the start of July, hosted by Minister for Employment Affairs and Social Protection, Regina Doherty TD, Social Justice Ireland called for an increase in core social welfare rates of €9 per week for single people – almost twice the fiver that has been added on annually over the past number of years – in Budget 2020 to ensure the welfare benchmark is maintained. They also want Jobseeker’s rates for young people under 26 equalised with their older counterparts and to introduce a universal state pension.
Youth (15 to 24 years) unemployment has not fallen at the same rate as that of adults and stood at 10% at the end of May, albeit down from 14.7% the year previous to that. More young people need to be given jobs that suit their skills and there are a lot of opportunities, such as apprenticeships, they should be steered towards where appropriate.
Undermining a lot of what is being done is a housing supply shortage that could stunt employment creation if people cannot afford to live within a reasonable distance of where the jobs are.