Thursday, August 2, 2012

Cork Independent 02/08/2012

The text of a short article from today’s Cork Independent is below the fold.  It offers some brief comments on the unemployment figures published recently as part of the results from Census 2011.  The newsprint version of the article can be seen on page 30 here alongside a rather colourful picture of some Naked Bike Riders!

The Real Problems

At times it can seem as if the news headlines and media debates are far removed from the real problems faced by households and businesses on the frontline of our economies.  The focus is on bond markets, eurozone debt crises and EU/IMF bailouts.  The unemployment crisis in Ireland is a case in point.  There are few statistical releases or dramatic announcements that capture the attention.

Unemployed surged in 2008 and 2009 when the property bubble burst and there were huge job losses in construction with knock-on consequences in retail and other areas.  The recent Census results showed that there in April 2011 there were 425,000 who listed themselves as unemployed.

The 2006 Census showed that there were nearly 12,000 people working as plasterers in April of that year.  The employment results of the 2011 Census indicate that there are now fewer than 3,000 people working as plasterers in Ireland.

Falls such as this are reflected across the construction sector and have resulted in more than 125,000 direct job losses in the sector with possibly half as many again in related areas. 

One statistic from the Census that did attract a lot of attention is the unemployment rate of 40% for those aged between 15 and 24.  This led to numerous claims along the lines that “nearly 1-in-2 of our young people are unemployed”.  Claims such as this are wide of the mark.

The Census showed that there are around 580,000 people in the 15 to 24 age category.  Of these 22,000 are unemployed looking for their first job and 60,000 are unemployed having lost their previous job.  This means there are 82,000 in the youth unemployment category.   This is 1-in-7 of 15 to 24 years olds rather than the claimed 1-in-2.

The reason is that most people in this age group are not in the labour force; they are in full-time education.  The unemployment rate is the percent of the labour force that do not have a job.  Of 15 to 24 year olds around 212,000 are in the labour force and the 82,000 unemployed is 40% of this sub-total rather than 40% of all 15 to 24 year olds.

The majority of 15 to 24 years olds in are secondary or third-level education and do not feature in unemployment statistics.  Claims that 1 in 2 young people are unemployed are misleading when the reality is that more than 350,000 of them are in full-time education.

Ireland’s unemployment crisis needs to receive far more attention.  The financial woes of the government and the euro area will be resolved but until that happens they will remain the focus of attention.  When the unemployment crisis does get a look-in it would be helpful if the statistics available were used appropriately so a true reflection of the problem is reported.


  1. I find the changing of the big number representing 15-24 year olds in this blog confusing.

    First it's 580,000 people (total 15-24 y/o)
    Then it's 212,000 people (labour force 15-24 y/o)
    Then it's 350,000 people (in education 15-24 y/o)

    so it's about:
    - 1 out of 7 if it's 82,000 out of 580,000
    - 1 out of 2 if it's 82,000 out of 212,000

    Then again, if that means 212-82 = 130,000 working and so 580,000 less 130,000 = 450,000.

    Then it's about:
    - 3 out of 4 if it's 450,000 out of 580,000.

    I get the feeling it's a whole lot more complicated than this blog or the CSO can explain in a single stat

    1. These stats are summary of Table 5A in the CSO publication

      Persons aged 15-24

      At work 130,286
      Looking for first regular job 21,557
      Unemployed having lost previous job 60,596
      Student 351,209
      Looking after home/family 9,104
      Other 7,498

      TOTAL 580,250

  2. You cannot consider full time students among the unemployed, although some may well be joining their ranks upon grgraduation. The figures are going to be difficult to tally, as they are constantly in flux, especially when one considers the rapid exodus of our young people to greener economic pastures. The statistics which were used to drag up this lazy "1 in 2" red-top style headline are absolutely typical of the garbage which is rife in the Irish TV and newspaper media today. It is exactly this type of negative attention-grabbing sentiment which drives the culture of saving and risk aversion which is maintaining the downward pressure on our already weak economy. The fact that such a large percentage of our 15-24 year olds are in full time education is a sign of a developed nation with prospects of regaining our competiveness.

    While I would be slower than many to brand our educated workforce as world-beating, I believe that we have a great deal to be optimistic about. There is a tendency to write about the current crisis as though the likes of it has never been seen before, as though it were an apolocalyptic event which we cannot hope to see an end to. The only thing is that the world has been here before, several times in one form or another and ultimately the wheels of commerce have started to turn again. The downswing has every bit as much irrational exuberance attached to it as the Celtic Tiger ever had, the zealots may be from an alternative political persuasion but their willingness to clasp onto the negative sound bites in every press realease rather than engage in reasoned analysis could prove every bit as damaging as the "speculation" which arguably led the economy to this point.

    Irrational optimism and confirmation bias may have got us to this point, but the willingness of the floundering hack journalists to cling to irrational pessimism as a tactic to retain punters may keep us here for longer than we necessarily should be. Economics is ultimately based on sentiment and as simplistic as it may sound, we need to raise spirits in order to get the real economy of Ireland moving again.