The Challenge of Long-Term Unemployment

2011 marked a year where Ireland was in deep economic crisis as the banking and property crash continued to unfold. Unsurprisingly, the labour market is transformed since then with an additional 407,000 people in the labour force, an extra 620,000 at work, higher participation rates and 212,000 less people in unemployment. Compared to the pre-pandemic labour market, the situation in quarter four 2021 illustrates how strongly the labour market has recovered from the period of closures and lockdowns throughout much of 2020. Although the numbers unemployed are slightly increased, all other indicators report a strong improvement.

The consequence of the 2009-2013 crisis period job losses was a sharp increase in unemployment and emigration which took some time to dissipate. Dealing with unemployment, Table 1 shows how it has changed between 2011 and 2021, a period when the numbers unemployed decreased by almost 60 per cent. As the table shows, male unemployment fell by almost 150,000 and female unemployment by 65,000; changes that illustrate the depth of the economic crisis a decade ago. Most of the 2021 unemployed are seeking to return to a full-time job with just over 25 per cent indicating that they were seeking part-time employment.

The improvement in the number and rates of long-term unemployment are also highlighted in Table 1. The number of long-term unemployed exceed 200,000 in 2011 but had fallen to less than 40,000 by late 2019. The 2021 figure, of 44,300, implies that one-third of all those currently unemployed are in that situation for more than one year. During 2022, as the pandemic unemployment payment is phased out, there is potential for the numbers unemployed and on welfare supports for more than one year to increase. While the improvements over the last decade are very welcome, the experience of the 1980s showed the dangers and long-lasting implications of an unemployment crisis characterised by high long-term unemployment rates. While this remains a policy challenge, Social Justice Ireland regrets that it is a policy area which receives limited attention.

Addressing this ongoing issue remains a major challenge and we outline our suggestions for targeted policy action later. However, it is clear that reskilling many of the unemployed, in particular those with low education levels, will be a key component of the response. Using data for the fourth quarter of 2021, 40 per cent of the unemployed had no more than second level education with 17 per cent not having completed more than lower secondary (equivalent to the junior certificate). Post-pandemic, as employment recovers and as unemployment declines, Social Justice Ireland believes that major emphasis should be placed on those who are trapped in long term unemployment – particularly those with the lowest education levels.

Table 1:		Unemployment in Ireland, 2011 - 2021
			2011	2019	2021	Change 11-21
Unemployment			340,100	110,500	127,400	-212,700
Gender
Male			215,800	62,100	68,100	-147,700
Female			124,300	48,400	59,200	-65,100
Employment sought
Seeking FT work			289,100	79,200	90,800	-198,300
Seeking PT work			37,800	28,400	32,700	- 5,100
Age group
15-24 years			86,300	28,100	35,000	-51,300
25-44 years			174,500	49,400	51,600	-122,900
45-65 years			78,700	32,100	38,900	-39,800
Region
Border			n/a	7,100	7,400	n/a
West			n/a	9,600	11,200	n/a
Mid-West			n/a	11,000	11,300	n/a
South-East			n/a	14,300	14,300	n/a
South-West			n/a	13,100	13,000	n/a
Dublin			n/a	33,800	42,700	n/a
Mid-East			n/a	15,400	20,300	n/a
Midland			n/a	6,300	7,100	n/a
Duration
Unemp. less than 1 yr			129,200	66,600	76,500	-52,700
Unemp. more than 1 yr			206,500	38,600	44,300	-162,200
LT Unemp. as % Unemp			60.7%	34.9%	34.8%
Source:	CSO, LFS on-line database.
Note:	All data is for Quarter 4 of the reference year. LFPR = ILO labour force participation rate and measures the percentage of the adult population who are in the labour market. Employment % is for those aged 15-64 years. Underemployment measures part-time workers who indicate that they wish to work additional hours which are not currently available. n/a = comparable data is not available. LT = Long Term (12 months or more). LF = Labour Force.

Previous experiences, in Ireland and elsewhere, have shown that many of those under 25 and many of those over 55 find it challenging to return to employment after a period of unemployment. This highlights the danger of the long-term unemployment and the potential for the emergence of a structural unemployment problem. Given this, Social Justice Ireland believes that a major commitment to retraining and re-skilling will be required in the years ahead.

Upskilling and Retraining the Unemployed

Live register data offer a useful insight into the skills and experience of a large proportion of those who should be the target of further upskilling and retraining initiatives. Table 2 presents a breakdown of the February 2022 live register number by people’s last occupation, and also examines the differences between those over and under 25 years. Among this group, the figures highlight the need for targeted retraining of people who hold skills in sectors of the economy that are unlikely to return to the employment levels of the pre-pandemic period. As such, they frame several of the challenges for upskilling and retraining of many unemployed and underemployed individuals.

 

Table 2:	Persons on Live Register by Last Occupation – February 2022
Occupational group		Overall	Under 25 yrs	Over 25 yrs
Managers and administrators		6,956	121	6,835
Professional		8,420	283	8,137
Associate prof. and technical		4,372	191	4,181
Clerical and secretarial		14,272	574	13,698
Craft and related		22,192	1,451	20,741
Personal and protective service		17,662	1,437	16,225
Sales		12,793	1,749	11,044
Plant and machine operatives		19,432	1,654	17,778
Other occupation		18,136	1,752	16,384
No occupation		39,013	7,553	31,460
Total		163,248	16,765	146,483

Source: CSO Live Register on-line database.