Men Without Work

The rise in the unemployment rate reveals a grim picture of the impact of the recession. The overall unemployment rate has risen from 4.4% at the beginning of 2007 to 14.6% today. Male unemployment is now 17.3%, while unemployment among men aged 20-24 is 32.3%.

Concentrating on the situation of males in some key age groups, the first Chart shows the unemployment rates for those aged 20-24, 25-34, 35-44 and 45-54 (four-quarter moving average of the Quarterly National Household Survey rates). Unemployment rose dramatically in all fours age groups, but younger men were most severely affected.

During a deep recession unemployment rates do not tell the whole story because people tend to withdraw from the labour force, cease to search for work and are no longer classified as ‘unemployed’ according to the International Labour Office conventions.

The CSO publishes broader measures of unemployment as well as the main ILO rates. The broadest of these includes those marginally attached to the labour force and others not in education who want work and it now stands at 23%.

This broad unemployment rate is not available by age and sex. However, the ‘employment rate’ (the proportion of the population that is employed) is available by demographic group and it sheds light on labour market trends that supplement the information in the conventional unemployment rate.

The second Chart shows the employment rate in each of the four age groups. As we would expect from the unemployment figures, the fall in employment has been most dramatic among younger men. Since the end of 2009 fewer than 50% of males aged 20-24 have been classified as ’employed’, compared with over 75% as recently as 2007.

It is instructive to look at the distribution of ‘non-employed’ men between ‘unemployed’ and ‘not in the labour force’. This is shown in the following four Charts. The proportion of the population ‘not in the labour force’ is lowest among men aged 35-44 and highest among those aged 20-24. But in all four groups there has been a significant rise in non-participation during the current recession. In fact the rise in ‘non-employment’ was split approximately 3:1 between increased unemployment and increased non-participation in all groups. While some of the rise in the numbers not in the labour force may be attributable to increased retention of younger males in the educational system, most of it is likely to reflect drop-out due to discouragement and the belief that no jobs are available.

Previous research has shown that those most likely not to be employed are single males with low educational attainment living in areas of high overall unemployment. It is likely that these factors continue to increase the risk of being without work.

The rise in unemployment and fall in employment leveled off during 2011 but as in recoveries from previous recessions further improvement is likely to be slow and the adverse effects of the contraction in the economy will be felt well into the future.

Let us hope that the ‘jobs initiative’ to be announced later today can make some impression on these figures and will include measures to ‘re-activate’ those who have dropped out of the labour force as well as those who are overtly unemployed.

35 thoughts on “Men Without Work”

  1. Google data allows you to visualise the unemployment rates (although not at the same level of detail) and to see the differences between male/female and youth/old/total unemployment.

    http://goo.gl/2oPiC

    Interestingly, youth unemployment for men has stopped rising but after starting later female youth unemployment has been climbing fast.

  2. A necessary condition for the currency union was the free movement of labour across Member States. We have that de jure but there seems to be a sort of mental inertia which makes EU citizens wallow in the economic misery of their home region.

    When I was but a young lad, and jobs in Ireland were scarce and paid poorly, I availed of this, going to Germany to work. I needed nothing more than a kick in the arse to get myself going, and in Ireland in those days, there was no shortage of kicks in the arse to be had.

    So my advice to these young men: Go down to the Ilac Centre Library, plug in to the language lab, learn a bit of deutsch and then up sticks and go find yourself a job packing boxes into a LKW outside a German factory in Stuttgart.

    This is what young men from West Virginia did when jobs were short in Morgantown. They had to learn to talk Californian. Imagine!

  3. There are a coule of relevant links on this twitter user’s page:
    http://twitter.com/#!/LisaWixted

    “Seminar on ‘Mobility, Technology, Gender and Work ’ on 27th April 2-4pm KB118 (Kemmy Business School UL). All welcome”

    “Interesting talk by Nata Duvurry (NUIG) yest on Gendering the Recession: its a he-cession, now 52% of employees in Ireland are women…”

  4. The current holder of the Nobel prize in economics Prof Christopher Pissarides of the London School of Economics and Political Science has I understand put forward optimum and cost effective sulutions in dealing with unemployment. Peerhaps some academic bloggers might have links etc

  5. Jobseeker’s allowance in Ireland pays €188 per week
    Jobseeker’s allowance in the UK pays €77 per week

    So we could reduce the Irish payment to the UK level, save the state 1.7bn per year in transfer payments and make paid work a much more attractive prospect.

    Is there a good reason for not doing this and continuing to borrow from the UK taxpayer instead?

  6. @Brenda Walsh

    The upper unemployment figure, isn’t that hitting the worst case scenario in the recent CB bank stress tests? Mortgage defaults must worsen in this case which brings me back to job creation on low wages. If some form of mortgage default/restructuring isn’t introduced, welfare rates may well continue to keep married men out of manual employment. It’s a question more than an assertion.

    @Ludwig HE
    I might be wrong but I recall that the colleges (all or some?) dropped the ‘foreign language’ requirement for engineering courses.

  7. @ Alchemist: Yes on the for lang requirements. Very contentious matter between undergrads, faculty and admins. Caused all sorts of bust ups.

    Undergrads saw little util gain – they had a heavy workload with their major, and the lang was simply dumped onto them. They rebelled! You had bad situations where a candidate passed all technicals but missed out on lang. Caused uproar at exam board meetings.

    Faculty were either hostile or in favour: 10:1. Varied: scientists generally pro, engineers generally against. Computer geeks thought the whole idea was totally mad. The real big bugbear was with poor English skills. Can’t learn a foreign lang if you are not so cool with you own!

    Admin, who lived in Cloud Cuckoo Land were in favour: 100:0. No other comment.

    The outcome was inevitable. A very good idea trashed by p**s poor planning. Sound familiar?

    BpW

  8. @Brendan Walsh

    Great article and very timely given the announcement on jobs today.

    Out of interest, what % of those over 54 are unemployed? I would have thought those people would be in the worst possible place to get re-employed, regardless of how good any jobs initiative is….. though I guess the figure might get warped by unemployment/redundancy posing as ‘early retirements’.

    I think there’s an interesting documentary to make here about unemployment in different age groups. Do you have your own website/blog (please point me at it) and would you be willing to be interviewed for it?

  9. @ John corcoran

    Sorry John, but their model is more for the long term. The ‘Shimer puzzle’ shows how it doesn’t handle business cycles well.

    There are hundreds of papers about the Shimer puzzle, so I don’t know if it has been credibly resolved (allowing the Mortensen Pissarides model to be used for business cycles).

    Also an issue is they assume people are risk neutral, which implies the marginal propensity to consume doesn’t change with income. This is fine for a long run model, but not really for a short term model.

  10. How should any “jobs initiative” be structured for optimal effectiveness? The historical track record for jobs initiatives is generally poor, but the current need is great. Hoping they might work seems not enough.

  11. The focus of the jobs initiative will presumably be on active labour market policies (ALMPs), training schemes, internships and all that. As Greg says, the track record for ALMP’s is not great especially if they are not well designed & I doubt if we have the knowledge base to construct smart policies. However, much of the evidence will be from labour markets that don’t remotely resemble what we have now i.e. other countries & with lower rates of unemployment.
    While unpopular, consideration should be given to passive labour market policies: reforms to the welfare system which currently appears to generate high replacement rates as well as to the various restrictions on wages such as the NMW, JLCs etc.

  12. The 20-24 year olds have one thing going for them, they are less likely to own property, hence have more mobility and more importantly, less debt.

  13. It’s the 25-34 year olds you have to feel sorry for, shafted by the ‘boom’ as well as the bust.

  14. @ Ludwig Heinrich Edler

    We have that de jure but there seems to be a sort of mental inertia which makes EU citizens wallow in the economic misery of their home region.

    Surely you can see that it is a lot more painful for a young man or woman to move across a border than it is for a unit of capital to make the trip, Ludwig. You call it mental inertia, but utility is not solely a function of wage.

  15. The Edler solution will work for many individuals, but it worsens the situation for Ireland. Guys packing boxes in Stuttgart won’t be paying the taxes that pay the bondholders.

  16. @ Enda,

    I dunno, I once met a Heidelberger offset printing press in Cork that was drowning its sorrows in machine oil while singing Oswald Sattler Volksmusik…

  17. @ Kevin,

    That’s true – and we need more than just labour mobility to make EMU work. I’m all for a realistic evaluation of liabilities relating to the financial crisis, EU-wide.

  18. @Brendan Walsh

    Very useful – rediscovering those skills from the 1980s …..

    What this ‘depression’ is also contributing is to further cement inter-generational immobility in certain areas – and to further cement the flow of young unemployed in the underclass into the battalions of the dark side ………… the ‘capital’ originally promised for re-generation in these areas has instead flowed from the NPRF into the banking system – and I’m not talking about the banking system of education.

    Again we experience the ludicrous situation of exporting newly qualified graduates.

  19. Unfortunately continental European countries had a long experience with “active labour market policies” ,thirty years in the case of Germany and France .The lessons of that experience are very clear: they do not work. They are probably unavoidable ,no government can afford to do nothing against unemployment without appearing to be cynical or insensitive ;but they are in fact, useless.
    They are based on a fallacy: if only the workers had better skills ,they would find work. In fact periods of high unemployment are also periods when overqualified candidates accept jobs they would never contemplate in normal times .It is a buyer market :employers can afford to choose and pick whoever they want.
    Usually “active labour market policies” are a game of musical chairs ,they give an advantage to one or several categories deemed to be particularly meriting ( the young, the senior worker, the head of family etc) .That advantage slightly increases the prospects of that category at the detriment of the others. This is a zero sum game. The only way out is growth .As long as Ireland will not attain a rate of growth higher than its labour productivity plus its population natural growth, there is no hope.

  20. @ Brendan Walsh

    This is an impressive presentation and there are interesting parallels with the US.

    Economists at the Hamilton Project of the Brookings Institution, say that up until the early 1970s, virtually all prime-aged men were gainfully employed – – regardless of whether they had a high school diploma or a college degree. Over the last 40 years, however, the United States has witnessed a dramatic change in the employment situation for men, particularly for less-educated workers who have faced greater challenges finding jobs and have increasingly dropped out of the labour force.

    Separately, Michael Spence and a colleague have produced research which shows that in the period 1990-2008, almost all the additional increase in US employment was in the non-tradeable sector led by government and health care.

    http://www.finfacts.ie/irishfinancenews/article_1022193.shtml

    In the last decade of the Irish boom, almost all the new jobs were in the non-tradeable sector.

    To me one of the enduring problems at policy level in the jobs area is that spin invariably trumps an unvarished assessment of the challenges.

    In the FDI area, because we already host most of the top firms in high-tech, health/pharmaceuticals and financial services, it’s evident in recent years that new projects tend to be small and while only 10,000 jobs were added in the tradeable sector in the period 1998/2007, recent job losses have reduced employment in the tradeable goods and services sectors (FDI + local) to about 268,000 – – back to 1997 when the workforce was 25% smaller.

    The number of Irish firms involved in exporting is much lower than comparable firms in other small economies. Irish SMEs do not grow to a size that is considered essential for developing overseas markets.
    There is very little useful data on firms. Stephen Kinsella has done some work on firm mortality but there is no useful data on startups, survival rates and no longitudinal studies tracking growing firms.

    According to Forfás, science related public spending across 39 government departments and agencies rose from €1.2bn in 1999 to €2.5b in 2009.
    €500m could likely be chopped off this sector without impacting outcomes.

    The so-called smart economy has got the lion’s share of Irish enterprise public funding in recent years with research and development spending in higher education almost trebling from €322m in 2002.

    While research can have several benefits, direct commercialisation is an insignificant one. For example, in the US the income from intellectual property is 4% of university research spending and in England in 2009, only £73m was earned.   

    The officially policy is a muddle but the goal to create a jobs engine from research is a delusion.

    A UCD study shows that in 2009, firms supported by venture capital companies, employed 9,700 people; according to Enterprise Ireland, 100 spinouts from research created 1,000 jobs in 10 years.

    Given the growing world population, there should be focus on food and commercial research should prioritise this area.

    In the EU in 2006, manufacturing as a percentage of total employment was 18.2%, 13.3% in Ireland and 22% in Germany.

    Despite the recession, the costs of doing business in Ireland are still excessive.

  21. @ OSC: “As long as Ireland will not attain a rate of growth higher than its labour productivity plus its population natural growth, there is no hope.”

    Growth rates can no longer be levered up, except in developing economies which have a sufficiently well educated workforce to utilize modern technology, with access to credit at low rates, access to cheap energy and low costs of living. We (in Ireland and most developed economies) have spent the last 30 – 40 years levering up our G*Ps with credit and energy and we now have a decreasing marginal product in credit (maybe in energy too). US and UK are equally badly off, just not so obvious at the moment. Growth paradigm is over.

    We need new economic ways of doing things. The old ones are creaking antiques.

    BpW

  22. Having been out for a few hours I’ve just logged on and read the main points of the government’s so-called jobs initiative.

    Talk about pi55ing into the wind….. 5,000 internships here, 3,000 back to education places there, etc. There are four hundred and how many thousand unemployed?

    This really does lack imagination and boldness.

  23. @Ludwig

    I needed nothing more than a kick in the arse to get myself going, and in Ireland in those days, there was no shortage of kicks in the arse to be had.

    If packing boxes as a gastarbeiter in Stuttgart is the best economic or socail advice you can give the thousands in those charts, then the real tragedy is that you did not get half enough kicks up the arse back “in those days”.

    Or indeed any day.

  24. Thanks for the comments and for the compliments on the graphs – it takes some arcane skills to get them up on this site – that’s why so few of them appear.

    On the question of the how the 55-64 year olds have fared, the QNHS gives results for the 55-59 and 60-64 year olds separately. The 55-59 year olds have not done too badly – labour force participation has held up well compared to the youngest age groups and the unemployment rate rose by much the same percentage as the younger age groups, so the employment rate fell much in line with that of the 45-54 year olds.
    Even the 60-64 year olds didn’t show a very big fall in the employment rate (although their unemployment rate – which had been very low – rose significantly). All in all, including these two older age groups would have reinforced the conclusion that this recession has hit the younger age groups hardest.

  25. @Paul Quigley

    I just Googled ‘arschloch’ 🙂

    That’a a pretty good multi-purpose word they have there. It seems to have a lot of different definitions that all point in the same general direction.

    Would you know if there is a similar word in Gaelic?

  26. @Joseph

    I suggest Amadán – it is quite a strong word in Irish and should be familiar to most in this country.

  27. Great to see some graphs up on the site. It should be easier to than the presence of them would indicate. Well done Brendan.

    There are a few more pictures of the unemployment situation here.

  28. @ Joseph

    One of the great strengths of our country is that we have a rich linguistic heritage, which includes quite a number of colourful native synonyms for idiot. Dinneen’s Dictionary is a great resource. We should probably reintroduce them in the current crisis, just to lower the old stress levels withour recourse to drink.

    ‘Amadan’, I remember from my youth as a relatively mild reproof. The word ‘ludraman’, however, indicated the need for prudent exit. “Oinseach’ was the whistle of ‘incoming’ fire.

  29. @ Peter Stapleton

    Oinseach is another great word , a female version of amadan. Tionlacan na n-oinseach is a gathering of clowns and would cover bini Smaghi and co.

  30. @ Joseph, Paul & others

    Okay, then, forget I said anything. Let them stay in Ireland and cry into whatever quantities of crappy, chemical beer their dole payments can afford them. (Just don’t expect the German taxpayer to fund a FG/Lab “jobs growth” spending spree)

    And they’ll have plenty of time on their hands to practice profanities in a dead, useless language like Irish!

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