100,000 More People and our Economic Indicators

Yesterday’s preliminary Census 2011 results have suggested that the population is 100,000 larger than previously estimated.  We now have an extra céad míle daoine to be giving out the céad míle fáilte.

At first glance this would just appear to be more of a demographic than economic issue, and not one that is related to the banking, public debt and unemployment crises we face.  However, the impact of this new population figure from the Census will not have been accounted for in the other statistics from the CSO which mainly come from surveys.

A survey like the QNHS which covers 20,000 might be very good at providing the breakdown and composition of the population in proportions but it struggles when estimating the overall size.  This is why the Census is undertaken rather than rely on a survey.

As a rough division we can break the population into three groups

• 0 – 14 years
• 15 – 64 years
• 65 and over

Additions to the 0 to 14 group are likely to be mainly the result of births (though migration will also play a role).  Counting the number of births should not be a problem.  Without wanting to be morbid, exit from the 65 and over group will largely be via deaths which is again easily measurable and additions will generally come from natural aging rather than migration.  It would appear that the most difficult group to track, and the one where most of the extra 100,000 are likely to be found is in the 15 to 64 age group.

We don’t know anything about these 100,000 but we can draw some inferences based on the survey findings of the QNHS.  For simplicity we will assume that all of these 100,000 are in the 15 to 64 age group though this will clearly not be the case.  We will also assume that the characteristics of this group match the characteristics of the population as a whole, though again this may not be exactly the case.

The employment rate rate among those aged 15 to 64 is 58.9% so there could be around 60,000 more in employment than previously estimated.  This would be an increase of 3.3% on the current employment estimate of 1.8 million.

There are 456,000 people on the live register.  Of these 86,000 are casual or part-time workers so there are 370,000 people on the live register with no employment.  The CSO’s official measure of unemployment is 295,000, and when asked to self-assess there are 352,000 who classify themselves as unemployed. 

These are based on survey data from the QNHS so both could increase to closer reflect the number of unemployed from the Live Register.  It is unlikely that the revised population figure will change the estimated unemployment rate.  There has been a change in the size of the population rather than a change in the composition of it.

It is hard to know what impact this more accurate population figure will have on the National Accounts.  As in the labour market the CSO are more likely to get the rates correct rather than the absolute size.  These change to the population figure is unlikely to make significant changes to the dramatic negative growth rates we have experienced in recent years.  There could be some moderation of the drops in the past year of two but nothing huge.

What is more likely to change is the absolute levels and all GDP figures could be revised up without huge changes to the growth rates.  It is impossible to say how the CSO would go about this.  Nominal GDP in 2010 is now estimated to be €156 billion.  A 3.3% rise in that would bring it up to €161 billion.

The first revision of our 2010 GDP by the CSO saw our debt/GDP ratio fall from 96.2% to 94.9%.  If the revision here was applied then the 2010 debt/GDP ratio would be 91.9%.  We are still accumulating debt but maybe we are further away than we thought from the “terminal” level of 120% that many believe we are cascading inevitably towards.

The CSO will wait until official Census results are available but it will be interesting to see how the unearthing of these 100,000 people will play out in out economic statistics over the next few years.  This is largely a statistical exercise and does not change the hugely downbeat economic reality we face, but it will be more useful to have statistics that better reflect that reality than not.

Labour Market Status – the full-time employed

The QNHS may be beginning to signal that stabilisation in the labour market is not far away.  In a previous post we examined the principle economic status of individuals.  Here we focus on the group who classed themselves as ‘at work’ to determine how real this stabilisation is.

Here is a snapshot of the labour market status of the population aged over 15 since 2003.

Two things are immediately obvious from this graph.

1. The increase in the population aged over 15 stopped in the middle of 2007.
2. The fall in the number of people in full-time employment since the middle of 2007.

The reasons for the stalling of the population over 15 have been discussed elsewhere (it is largely the departure of non-Irish nationals).  Here we will look the numbers in employment.

Looking at the total number employed it suggests that labour market conditions are back to those last seen in early 2003.  Since the peak in 2007 the numbers employed in Ireland has fallen by 346,000.  The decline is continuing and two-thirds of the fall in the past year has been among non-Irish nationals who have subsequently left the country.  However, from the perspective of overall economic performance it doesn’t matter who they are and the 55,000 decline in employment in the past year is a continuing negative sign. We can also see the breakdown on the patterns on which is it likely the CSO’s seasonal adjustment methodology is based, the problems with which were noted here.

However, looking at the total numbers employed only gives a partial picture.  Next we consider the number of people in full time employment.

This is far worse than the total number employed and the decline is showing no signs of abating. Full-time employment is now back to levels last seen in 1999.  If this continues we will drop below the levels recorded at the start of the dataset in 1998.  When we examine the breakdown by gender we see that one group already are.

Male full-time employment is back to levels last seen in 1998.  Female full-time employment is declining and is back to 2004 levels.

Although the level of full-time employment has continued to head south, part-time employment has continued onward ever upward.

And these increases have been seen for both genders.

This reduction in full-time employment and increase in part-time employment gives rise to the following.

After hovering around 83% for nearly a decade the proportion of workers who are employed full-time has now declined to 76%.

The final graph of this set looks at the change in male employees and self-employed workers.

Since the middle of 2008 the number of male employees has fallen from 925,000 to 720,000, with a fall from 299,000 to 236,000 for male self-employed workers.  The equivalent fall for females employees is from 856,000 to 779,000 while the number of female self-employed workers fell from 63,000 to 57,000.  Male employment is down 268,000 with an 83,000 drop in female employment.

Principle Economic Status – Self Assessed

The QNHS is used as the primary measure of unemployment in Ireland.  We already saw that there may be some issues with the method used by the CSO to estimate the seasonally adjusted unemployment rate.  A second issue emerges when we consider the definitions of employment and unemployment used by the CSO.

In Employment: Persons who worked in the week before the survey for one hour or more for payment or profit, including work on the family farm or business and all persons who had a job but were not at work because of illness, holidays etc. in the week.

Unemployed: Persons who, in the week before the survey, were without work and available for work within the next two weeks, and had taken specific steps, in the preceding four weeks, to find work.

Working for one hour in the week prior to the survey means that the respondent is classified as employed.  The QNHS includes an additional question that asks people so self assess “their usual situation with regard to employment” and gives the following response categories:

• At work
• Unemployed
• Student
• Engaged on home duties
• Retired
• Other

Using this measure there are 352,000 people who classify themselves as unemployed which differs from the 295,000 people on which the 14.0% unemployment rate.  Here are the proportions of the above categories for the population aged over 15 since 2003.

The changes may not be as pronounced as some might expect but the largest change since 2007 is obviously the drop in those at work and the rise in those unemployed.  Since Q4 2007 the proportion at work has fallen from 58.6% to 50.4%.  Most of this reduction has been picked up in the proportion unemployed which has risen from 3.5% to 10.0%.  The other categories are largely unchanged.

The 352,000 people who classify themselves as unemployed further belies the claims by many that there are 450,000 people unemployed in Ireland based erroneously on the numbers on the Live Register.  The Live Register is not an accurate measure of unemployment.  However, as we saw previously we could be closer to this 450,000 figure if many of those who have left employment had not also left the country (and in the majority of cases these were non-Irish nationals). 

Any claims that there are 450,000 unemployed are wrong.  The “official” figure is 295,000 and the “self-assessed” figure is 352,000.

If we use the sum of those who classify themselves as at work or unemployed as a measure of the labour force then the implied unemployment rate from this question in the QNHS is 16.1%.  The headline rate might be showing some improvement but that is not reflected in how respondents to the QNHS see their reality.

Nor is there any improvement when we look at those at work.

Using these measures it appears that the labour market is not getting any worse, but not getting worse is not the same as getting better.  Hopefully this stabilisation will convert to improvement over the coming quarters.

Adjusting Unemployment

Yesterday’s release of the the QNHS saw the headline rate of unemployment fall from 14.8% in Q4 2010 to 14.0% in Q1 2011.  This “improvement” must be examined in the light of the continued FALL in the numbers employed which fell from 1,823,200 to 1,804,200.  The unemployment rate fell but the numbers employed fell by nearly 20,000.

Another issue to consider is the fact that it is the seasonally adjusted rate which is usually given the most weight when assessing changes in unemployment.  However, over recent quarters this seasonally adjusted rate has exhibited a volatility which may not be reflective of actual outcomes in the labour market.  Here are the adjusted and unadjusted unemployment rates.

Over the past three quarters, the adjusted rate has gone from 13.5% to 14.8% to 14.0%.  Over the same timeframe the unadjusted rate has been 13.9%, 14.1% and 14.1%.  The volatility in the adjusted rate suggests that labour market conditions deteriorated markedly in Q4 2010 and then improved again in Q1 2011.  It is likely that neither occurred and there has been no significant change in unemployment as reflected in the unadjusted rate.

There seems to be some problem with the Q4 adjustment made by the CSO.  If we look at the 2009 numbers we see that in Q4 another gap emerged between the adjusted and unadjusted rates.  This also happened to a lesser extent in 2008.

It may be that the CSO itself needs to adjust its adjustment method for the unemployment figures to better reflect the muted performance of the Irish economy in recent years.  The headline unemployment rate may have gone from 14.8% to 14.0% but I don’t think we’ll be cheering it just yet.

“It’s all Greek to me”

Students of economics are often faced with a plethora of Greek symbols leading many to despair “it’s all Greek to me”.  For the past while all things Greek have jumped from econometrics textbooks to the economics headlines.  And the turbulence is being felt over here.  This graph from Bloomberg shows an average 10-year yield for Irish government bonds.

You can see that actual yields at yesterday’s close for the outstanding Irish government bonds in this daily report from the NTMA.

Since the start of the year Irish bond yields have been rising almost incessantly.  The only notable decline took place in the 10 days following the March 31st stress tests of our ailing banks, which did garner some international credibility.  That fall was quickly reversed and the yields quickly rose back above 10% and have recently settled above 11%.

Today has already been a volatile day and after opening at 11.55% an hour ago the yields are up to a record 11.69%.  The Department of Finance, IMF, European Commission might be saying that the rescue package is working but we are getting further and further from a return to these markets to raise money rather than closer. 

When the IMF rolled into town the 10-year yield was 8% and it was felt that was sufficient to warrant calling on external help.  Six months into that rescue package and the yields are racing to 12%.  The torpor in the Irish economy continues but there has not been negative news in the past two months that can explain our surging bond yields. 

It is been political rather than economic developments that have driven the changes and it is clear that political institutions at national, European and international level do not have a credible strategy for dealing with this debt crisis.  This is now coming to a head in Greece and it is expected that a similarly disjointed approach will be taken when the circus returns its focus on Ireland. 

Ireland may not be Greece but with the same people providing the “solutions” it is not hard to see why our yields are moving so closely together.

From an Irish perspective this can be readily summarised using Michael Noonan attempt at kite-flying from Washington during the week when he suggested that burden-sharing with the €3.5 billion of senior unguaranteed unsecured debt in Anglo and INBS was back on the table.  What has been the reaction of the ‘troika’?

• According to Noonan the IMF support this idea but no one in the IMF has actually come out and said this.
• The European Commission have said they “always ready to consider any proposal” but hadn’t heard anything about this latest move.
• And the ECB? Well, the ECB is so opposed to burden-sharing that they still think that Greece can pay back all its debt.

And we wonder why the markets are reacting as they are.  Seems perfectly rational to me.

UPDATE: Today’s volatility has continued and the breakfast time rise to 11.7% percent has been followed by a lunchtime drop to below 11.4%.  Check out the 1Day graph here though movements like this at these levels are largely academic.

Wages remain ‘sticky’

UPDATE: The original version of this post was based on incorrect numbers that were posted to the CSO website yesterday.  This has now been corrected and so has this post.  The correct figures do not suggest that wages are as ‘sticky’ as the post title might suggest.

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As well as the QNHS, the CSO have today released the Q1 2011 Earnings, Hours and Employment Costs Survey.  Here are the average weekly earnings for the overall economy with the public and private sector averages also provided.

The average weekly wage in the economy in Q1 2008 was €704.  Three years later and after the deepest, and swiftest, recession this economy has seen the average weekly wage in the economy is €675.  Average gross weekly wages have fallen by 4.2%.  Income Tax increases will have further reduced net pay.

In the public sector, the last three years has seen the average weekly wage move from €905 to €871.  The drop below the Q1 2008 level that occurred in Q1 2011 is partially the result of 5,200 temporary employees hired for Census 2011.  If these employees are ignored average weekly gross pay in the public sector was €881.  Average weekly gross pay in the public sector is down 2.6% since the start of 2008 but is unchanged since Q1 2010.

This is even after the public sector wage cuts announced in the December 2009 budget which gave rise to the largest fall seen in the graph.  It should be noted that these gross figures do not account for the public sector pension levy introduced in April 2009 which resulted in an average 7% reduction in take home pay for public sector workers that was not applicable to private sector workers.

In the private sector average weekly wages have fall from €643 to €603, a fall of 6.2%.  It can also be seen that private sector wages have continued to fall with a 1.8% fall recorded in the year since Q1 2010.

A word of caution should be noted when interpreting these averages.  These averages are simply the total pay bill divided by the number of employees.  In recent times both the numerator and denominator of this ratio have been changing.  For example, although wages are showing little change, this could because job losses are concentrated among lower paid workers (causing average wages to rise), while wages fall for everyone else (causing average wages to fall).  The aggregate effect of this could be static average wages.

To show the effect of job losses here is an index of total earnings for the public and private sector. 

Gross earnings in the public sector are down about 6% since the start of 2008 (and over 10% since the end of 2008).  In the private sector gross earnings are down 24% on the start of 2008.

In both the public and private sectors aggregate earnings were largely unchanged during 2010 and the seasonal drop usually recoded in the first quarter is also seen in 2011.  Here is a snapshot of aggregate earnings for the entire economy.

Employment by Sector

In this instance we will use today’s QNHS figures to look at the change in employment by sector, and in particular the changes in employment for Irish and non-Irish nationals. Here are the numbers employed by sector.

Nearly two-thirds of non-Irish national employees are in just four sectors: industry, retail,accommodation and food service and health.  In the fourth quarter of 2007 there were 48,000 non-Irish nationals working in the construction sector.  Now it is just 9,000. 

These are the proportions of workers in each sector who are non-Irish nationals.

Here are the changes in employment by sector.  The huge drop in construction employment for non-Irish nationals can clearly be seen.

Employment for non-nationals has fallen in all sectors since the peak in the final quarter of 2007.  If we look at the same graph for the past year we see the following:

Employment is still falling in 13 of the 14 sectors.  The only sector with growing non-Irish national employees is the Agriculture sector.

Finally we will compare the last 12 months for Irish and non-Irish nationals. Click to enlarge.

A somewhat contrasting picture emerges of the labour force outcomes for Irish and non-Irish nationals.  Both groups have continued to see job losses in construction,  retail and, to a lesser extent, financial service.  For Irish nationals, there continues to be a large number of jobs shed in industry.

However, while agriculture is the only one of the 14 sectors shows an increase in employment for non-nationals, over the past year employment of Irish nationals has risen in seven of the 14 sectors, but it must be noted that these rises are modest and do not offset the jobs lost in declining sectors.

Over the past year there has been a decline of 18,800 (or 1.2%) in the number of Irish nationals employed, while at the same time there has been a decline of 34,500 (or 14.5%) in the number of non-Irish nationals employed.

Changes in Employment and Unemployment

Here’s another quick update from today’s QNHS release.  Here are the absolute changes in employment and unemployment since the third quarter of 2007 (peak employment).

Since 2007 there has been a reduction of 345,000 in the number employed.  Over the same period the number unemployed has risen by 198,000.  Over the past three quarters the number employed has fallen by 47,000 and over the same time the number unemployed has also fallen (though only by 3,000).

If the reduction in the numbers employed had corresponded exactly to the increase in the numbers unemployed, then the number unemployed would be nearly 450,000 rather than the current figure of 295,700.

As before the question is: where did these 150,000 people go?

We get a small part of the answer if we look to Irish nationals.  The gap here is around 50,000.  There has been a fall of 216,000 in the numbers employed and a rise of 168,000 in the numbers unemployed.  We can also see that over the past two quarters both of these measures have been largely unchanged.

The picture is somewhat different when we look at non-Irish nationals.  There is a huge gap between the reduction in employment (139,000) and the increase in unemployment (24,000).

We can also see that there has been an acceleration in the reduction in employment for non-Irish nationals which fell by 17,000 in the first quarter of 2011.  At the same time the number of unemployed non-Irish nationals also fell (by 5,000). 

It is clear that a lot of the recent dynamics in the Irish labour force is being driven by the departure of non-Irish nationals from the country.

Changes in the Labour Force

The CSO have just released the Q1 2011 Quarterly National Household Survey (QNHS).  The headline number is that the seasonally adjusted unemployment rate has fallen from 14.8% to 14.0%.  Here we will continue our series that looks at the composition by nationality of the labour force.

First up, the number of non-Irish nationals in the labour force.

Since peaking at 366,000 at the end of 2007, the number of non-Irish nationals has declined by nearly one-third and now stands at 248,000.  There has been a reduction of 143,000 in the number of non-Irish nationals in employment but an increase of only 24,000 in the number of unemployed non-Irish nationals to 45,000.  In fact over the last two quarters both the number of non-Irish nationals employed and unemployed has been falling.

As a percentage of the labour force the number of non-Irish nationals is now back to levels last seen in 2005.

As in previous quarters the biggest driver of these changes has been workers from the EU-Accession states who account for more than half of the drop of the number of non-Irish nationals in the labour force.

Although the numbers of unemployed non-Irish nationals has been falling the unemployment rate among non-Irish nationals (18.1%) remains higher than among Irish nationals (13.1%) 

Of the 296,000 total unemployed, 45,000 are non-Irish nationals and 251,000 are Irish-nationals.  The proportion of those unemployed who are non-Irish nationals has been steadily declining since 2009. 

In the first quarter of 2009, 22% of those unemployed were non-Irish nationals.  This has now fallen to 15%.  The final graph in this post gives a breakdown of the unemployment rates.

How far back?

Today’s release of the Q4 2010 Quarterly National Household Survey makes for grim reading.  Here will we consider the decline in the some of the main employment measures and how much of the Celtic Tiger growth has been given up.  These are non-seasonally adjusted figures.

First here’s total employment in the economy.

Total employment is now back to levels last seen in the middle of 2003. Employment peaked at 2.15 million in the middle of 2007.   Since then employment has fallen by 326,600 and now stands at 1.82 million.

This just gives the total numbers in employment.  Another issue to consider is the type of employment.  At the start of 2007, 82.6% of those employed were in full-time employment with 17.4% employed part-time.  The figures for Q4 2010 show that percentage of those employed in full-time employment has fallen to 76.8%, with a corresponding increase in the percentage part-time employed to 23.2%.

If we focus on the total numbers in full-time employment we find we have to back further than 2003.

Those in full-time employment is now back to a level not seen since 2000.  On the other hand the numbers employed part-time have never been greater as shown here.

Until 2007, the increase in the numbers part-time employed was because of an increase in female part-time employment.  Since then this has been largely unchanged and the increase in part-time employment since 2007 is because of increasing male part time employment.  Graph in here.

To finish we can look at the patterns in the numbers in full-time employment by gender .

It is evident that the drop in employment has been more severe among male workers.  The number of males in full-time employment was 853,000 in Q4 2010.  This is lower than it was in Q3 1998 when 868,900 males were in full-time employment.  At that time there was 71,000 unemployed males looking for full-time employment.  Now there are 199,200 seeking similar.

Male full-time employment is now back to 1998 levels.

Employment and Unemployment

We know that Ireland currently has 299,000 people classified as unemployed by the CSO.  This is an increase of nearly 200,000 since the peak of employment was achieved in the middle of 2007.  However, in the fall from this peak the number of people in employment has fallen by nearly 300,000.

Our unemployment figures understate the destruction of jobs in the economy by almost 100,000.  A lot of people have left the ranks of the employed but have not added to the numbers unemployed.  This gap is substantial.

This gap have significant consequences.  It gives a lower unemployment rate than might otherwise be the case.  It ‘saves’ the government substantial social welfare payments which it would otherwise have to meet.

Where did these 100,000 people go?

About 1/4 of the answer is to be found in the changes to the numbers for Irish Nationals.  The gap for Irish nationals is likely a combination of a number of factors

• people leaving the labour force or reaching retirement age
• people continuing or returning to education
• people emigrating

The remaining 3/4 can be see if we look at non-Irish nationals and it is likely that most of this is down to people leaving the country.

The numbers of non-Irish nationals who are classified as unemployed is essentially unchanged since the start of 2009 even as the number employed has continued to fall relatively unabated.

Who’s unemployed

A lot of time is spent looking at unemployment rates, here we just look at the numbers.  According to the latest QNHS there are now 299,000 people unemployed in Ireland.  The decrease in the numbers seen during the short-lived ‘turning the corner’ period at the end of 2010 has been replaced by a consistent increase during 2010.

Who are these 299,000 people?

According to the CSO data 248,900 are Irish nationals and 50,100 are non-Irish nationals. 201,500 are male and 97,500 are female.  Since the start of 2007 the number of males unemployed has risen by 233%, with a 160% rise in the number of females unemployed.

If we look at the current figure of 299,00 we can break it down by age as well as gender.

Although for both genders the numbers in the younger age categories are the largest, these categories have seen a reduction in the numbers unemployed recently (perhaps as people in these categories return to education or leave the country) while the numbers unemployed are the older age categories is continuing to rise. Click to enlarge.

Finally, for now here is the region breakdown of the 299,000 unemployed.

Unemployment and Education

The CSO’s Quarterly National Household Survey can be used to give an insight into the employment performance of the population when divided by educational attainment.  This graph uses the most recent QNHS release which gave data up to Q3 2010.

It is, perhaps, an unsurprising picture.  Unemployment is lowest amongst those who have some form of third-level education; non-degree (9.1%) and degree and above (7.1%).  No other category has an unemployment rate of less than 15%.

There has been some minor shifts in the relative rankings of the categories since the fall from peak employment in late 2007.  The category with the highest unemployment rate is not lower secondary (Junior Certificate) at 23.3%.  This is now worse than unemployment amongst those with  only primary education but this is likely a function of participation rates as well as employment changes.  Participation amongst those with only primary education is 37.8%.

The second switch has seen the unemployment rate of those with a post-Leaving Cert qualification (19.2%) move above the unemployment rate of those who leave education after the Leaving Cert (15.2%).

It would be very useful if we had a breakdown of these educational attainment categories by age as we could examine the employment performance of those who have recently completed their education across the different categories versus those who would have finished their education well before the current crisis.

One break down by age that is provided is the differences between early school leavers and those who continued further in education.  A person is defined as an ‘early school leaver’ of they have a highest educational attainment level of lower secondary (Junior Cert) or below and have not received formal education in the past four weeks.  The CSO provides details of these groups in two age categories; 18-24 years and 25-64 years.  Here are the unemployment rates.

The unemployment rate amongst early school leavers in the 18-24 age category was always the highest but is now a staggering 56.5%.  For male early school leavers the rate is 61.6% and 45.7% for female early school leavers.

Those in the 25-64 category who left school early have a lower unemployment rate then those in the 18-24 age category who continued in education to Leaving Cert and beyond.

Back to School?

The Construction Sector has seen the greatest destruction of employment in the ongoing recession.  Employment in this sector peaked at over 270,000 in the middle of 2007 but has now fallen to just 113,000.  The biggest sufferers of this decline are men, and in particular young men.

When construction output was at its peak there was 160,000 males aged between 15 and 24 in employment across the whole economy.  The most recent figures show that there are now just over 80,000 males in this age category in employment.  The number of unemployed males in this age category has ‘only’ increased from just under 20,000 to nearly 59,000.  Of course, these cohorts are not suitable for a direct comparison as the 2010 cohort of 15 to 24 year olds will be a much different group to those who were in the same age group in 2007.

One impact of the demise of the construction sector has been the relative increase in the attractiveness of education to males as a result of the decline in their employment and earnings potential. 

After declining steadily relative to females during the construction-fuelled Celtic Tiger II phase, the number of males aged over 15 in education has been rising since 2007.  This can be readily seen if we look at the ratio of male to female students.

We can see that at one stage there were only 85 male students aged over 15 for every 100 female students.  Now the numbers are close to parity.

One useful comparison we can make between the 2007 and 2010 groups is the Labour Force Participation Rate. 

Labour force participation has fallen from around 60% four years ago to 45% now.  Even with this increased enrolment in education and ensuing drop in labour force participation the collapse in employment for young males has still seen extraordinary unemployment rates recorded.

The unemployment rate is over 30% among 20 to 24 year old males and is over 40% among 15 to 19 year old males who are in the labour force.   We are in the midst of a major unemployment crisis but look at how moderate the increases in the overall rate seem when compared to the increases in the unemployment rate among males aged under 24.

It would be useful to see targeted suggestions to tackle this problem rather than the usual platitudes we get about “solving the jobs crisis”.  For a start it would help if there was a greater degree of understanding of the problem we face.  And 35% unemployment among young males is a serious problem that will not be solved by hoping they all go back to school.

Composition of the Labour Force

We can get some useful numbers from the QNHS on the composition of the labour force.  Here we will look at the nationality of workers in the Irish labour force.  Click all graphs to enlarge.

The number of non-Irish nationals in the labour force peaked at 366,500 in the final quarter of 2007.  Since then it has declined and by the third quarter of 2010 was down to 276,600, though this decline has eased considerably over the last three quarters.

Over the same period the number of non-Irish National employees has fallen by 119,400 while the number of unemployed non-Irish Nationals has only increased by 29,400.  Most of the non-Irish Nationals who have lost their job have also left the labour force.  By extension we can assume that they have left the country. 

Since Q4 2007 there has been a 167,900 fall in employment among Irish nationals.  During the same period the number of Irish nationals classified as unemployed has risen by 168,600.

The percent of the labour force comprised of non-Irish nationals has fallen from nearly 16.5% at the end of 2007 to 12.8% now, a level last seen at the beginning of 2006.

Most of this decrease can be accounted for with workers from the EU Accession States leaving the workforce (country), though there was an increase in workers from these countries in the last quarter.  The number of workers from outside the EU has also declined with only slight decreases in the number of UK and EU15 (excluding UK and Ireland) workers in the labour force.

There has been a consistent, though small, difference in the unemployment rates of Irish and non-Irish nationals.  This gap has increased in recent quarters.  For the third quarter of 2010 unemployment among Irish workers was 13.3% and was 18.1% for non-Irish nationals.

Workers from the EU15 (excluding UK and Ireland) have the lowest unemployment rate though this did jump from under 7% in Q2 to over 11% in Q3.  A tad under 20% of workers from the EU Accession States are now out of work.

The QNHS also provide data on employment by sector.  Nearly 62% of all non-Irish national workers are employed in just four sectors; Industry (17.8% of non-Irish national employees), Retail, Wholesale and the Motor Trades (16.8%), Accommodation and Food Service (14.8%) and Health (12.5%).

The next figure gives the percent of non-Irish employees in each sector.  This ranges from 20.7% in the Accommodation and Food Service Sector, 16.7% in Industry to 4.9% in Education and just 1.2% in Public Administration and Defence.

We can also consider the change by sector since the peak level of employment seen in 2007 Q4.  The numbers of non-Irish Nationals employed has fallen in all 14 NACE categories reported by the CSO. 

The largest falls have been in Construction and Retail, Wholesale and the Motor Trades.  It is also useful to look at the proportionate reduction  in the numbers of non-Irish nationals employed by sector.  There has been a nearly 80% reduction in the number of non-Irish nationals employed in the Construction sector since Q4 2007.

The smallest proportionate decrease in the number of non-Irish nationals employed has been seen in the health sector with a fall of 11.3%. 

If we look at employment among Irish nationals we see that employment levels have actually increased in six sectors.  These are Accommodation and Food Service, Information and Communications, Public Administration and Defence, Education, Health and Other.  The following graph combines the previous one with changes in employment among non-Irish nationals with the equivalent numbers for Irish nationals.

The only sector where there has been a worse proportionate change among Irish employees is the Agriculture, Forestry and Fisheries sector.