Notes on the Front

Relief throughout the nation – employment rising, joblessness falling; the new CSO release should give us something to cheer about.  Some quick notes on what the numbers are telling us:

Employment has risen by 58,000 – or 3.2 percent.  This is good but puzzling – how does this square with an economy that is still stagnating?

Agriculture employment – an area where the CSO has warned we should tread carefully – has risen by 25,000, or 29.4 percent.  Self-employment (without paid employees) rose by 28,400 or 14.4 percent.   This makes up a substantial amount of the employment rise.  Does this skewer the overall results?  Some say no – the overall figure of a 58,000 increase stands, it’s just a problem in the distribution of gains in different economic sectors (e.g. agriculture, industry, retail, etc.).  

This may be so.  However, the CSO Quarterly National Household Survey registers an increase in the number of employees at 27,200, or 1.8 percent.  The CSO’s Earning and Labour Costs, also released yesterday, showed a similar number of non-agriculture employees rising by 21,900 or 1.4 percent (the Earnings and Labour Costs only measures firms with three employees or more which may account for the small difference).  So the CSO’s warnings seem valid – agriculture and self-employment numbers are artificially inflating the job numbers.

Nonetheless, the rise in employees is the biggest since the crisis started.  What were the biggest growth categories?  The Hospitality sector grew by 15,900 – or 72 percent of the total increase.    This is the lowest paid, lowest value-added sector of the market economy.   Other categories to gain were manufacturing and professional & scientific – which provides some balance.  Only 3 out of the remaining categories (12) saw employment increases.  So the employment rise is not spread out.

Big question:  is this increase the bounce after years of recession?  How much higher will this bounce go?  And when will it settle down?  The Government and the ESRI predict that the rise in employment will be lower in 2014 than this year.  Again, this may be due to the statistical bump the CSO has warned about this year.

Unemployment has thankfully fallen – by 18,000.  But to what extent is this due to the rise in the number of employees and the number of people emigrating?  We should expect more than 60,000 people emigrating this year in the key age category of 15-24 years.

Tentative conclusions – the employment rise looks to be settled in but it is not spread throughout most categories; it is concentrated primarily in the low-paid hospitality sector with small gains in the manufacturing and professional & scientific sections.  The statistical problems will go away in the final quarter of this year so it won’t be until next year until we get a sense of the real trend.  Employment will increase but key questions remain:  where will it increase, what kind of jobs will be created, what value-added will be produced and what wage levels will be paid?

Final Note:  we all expect Government Ministers and backbenchers, and opposition politicians to make political hay with these types of states, moulding them to their agenda.  No problem in that (unless it amounts to outright fabrication); that is the stuff of political debate.  However, it is incumbent upon commentators to provide a more exacting analysis and not merely repeat headline numbers.  Unfortunately, that doesn’t happen much and the debate is the poorer for that.