The Irish Economy
Commentary, information, and intelligent discourse about the Irish economy
new Central Bank letter here.
“… the probability of regain-ing employment declines the longer a person stays
in unemployment, the lower their level of education and the older the unemployed worker.”
Quite a few life-sentences for the lower_echelons in store ….. consequences for their childer … and a widening of the class/income divide.
Must be “T”reason somewhere …..
…a good recession for women working in the public sector in Ireland it would appear….
[As I get older] It seems that age discrimination is damaging the economy and social fabric of the state. On the one hand we are educated to believe that re-skilling and up-skilling is the way fo the future. We are led to believe that people will be able to switch jobs as roles and technologies become redundant. However, this is in fact very difficult to do.
It seems that the ability to switch roles and careers through re-skilling is wishful thinking on the part of policy makers and educators. The policy cure is to make more education available, thereby bolstering the income of educators. It seems that education policy makers are sometimes more interested in keeping themselves in a job! Policy makers prescribe a solution that suits them and theirs rather than one that actually works.
The State needs to intervene to provide proper pathways and incentives for older people to get back into the workforce at levels commensurate with their skills. Otherwise, who would be fool enough to enter into careers in technology companies if the business plan is to sack them when they are forty and employ graduates to deal with the new technologies?
It is the state that picks up the tab for the long term unemployed and their dependents, and for all the social and health problems arising within stressed and damaged families. It is time to give people dignity and a life worth living rather than just a welfare cheque. If the private sector cannot provide the skilled work then the state should provide it.
@ zhou_enlai: “If the private sector cannot provide the skilled work then the state should provide it.”
This solution is not possible. If the Private Sector [PS] cannot ‘provide’ waged-labour employments which pay a Living Wage – then the cause is that demand for the goods and services provided by the PS is not there. That’s it: QED. All the government can do is employ persons in the Public Service.
“It seems that the ability to switch roles and careers through re-skilling is wishful thinking on the part of policy makers and educators.”
Actually its a lot more serious that this. These critters actually believe their own utterances! They are, in large measure clueless, but that does not stop them. They do not know enough to know how little they do know.
There was a significant paradigm shift in the nature of waged-labour employments in the 1980s. And the trend has simply ‘worsened’ since. There has been no parallel, compensating shift in the foundations of political policy making and social behaviours. Think: boats cast adrift without power.
“It is time to give people dignity and a life worth living rather than just a welfare cheque”
The Welfare Cheque IS the new dignity! Its just that most folk lack the intellectual and technical skills to enjoy it. Re-skilling indeed is needed. Its Lifeskills is what!
Fas is being rebranded and together with various job activation programmes, and the apprenticeship system, they are all badly run and the only hope for improvement is to hire outsiders with track records in these areas.
Ironically, the successor to Fas is SOLAS, a new ‘world class’ skills body – let there be light!!
The ILO level of unemployment of 300,000 used in the note understates the true number.
Apart from 80,000 in activation programmes (split between education courses at 30,000 and the rest in various schemes), since end 2010, self-employment (without emloyees) and ‘assisting relative’ categories, have risen by 17,000 – – it’s understandable that people would call themselves consultants and the like but most are not in employment.
@PQ: Not sure whether or not you have read through that Wray piece. Its pretty messianic sort of stuff. Borderline delusional – in a Political Economic context.
I’m reading his ‘Understanding Modern Money’ – and I was somewhat concerned with some of the things he says. And then I find the same guff in the above piece. MMT appears to be a ‘loverley’ theory. Don’t know whether or not I’d like to road-test MMT in a real economy, with real folk, and real, but finite, energy resources. Interesting, as they say.
It’s hard to change systems that benefit so many people. But 80% of the population isn’t enough to get demand off the floor. Employment is the only way to get the economy moving again.
Stiglitz’s lost 10 years may be on the optimistic side.
Are any economists studying the ongoing strategies to paralyse reform and the conflicts of interests of parents protecting their own incomes at the expense of their kids’ futures ?
Social unrest will be the motivator to reduce unemployment now that governments can borrow at rates backed by the ECB. Cheap money in the door economic reform out the window.
Germany is now more of a threat to the USA as the Euro weakened. There will be retaliation before the 2014 US elections. What the PIIGSF cannot accomplish the will.
What the PIIGSF cannot accomplish the US will.
“It is the state that picks up the tab for the long term unemployed and their dependents, and for all the social and health problems arising within stressed and damaged families. It is time to give people dignity and a life worth living rather than just a welfare cheque. If the private sector cannot provide the skilled work then the state should provide it.”
I would certainly agree with that as a stated policy aim. But why confine the proposed solution to ‘skilled’ work?
The FAS schemes, now being treated as a joke and ‘wasted’ money by the mandarins and beurocrats, were an attempt in the direction you suggest; the direction of providing some dignity while doing much admired local improvements.
On the question of older people being lost to economic and social life and consigned to a despairing existence, is that not equally true of younger people.
Your point on the difficulty of changing jobs etc is well made, except in the case of routine manual labour. We have been listening to blather from politicians and mandarins for years regarding the supposed normality of switching careers ‘four, five or six times’. This from people who have never suckled a day at any other teat than that of the public purse, where in many cases they were nurtured from one flowing teat to the next.
Hopping from one State or corporate boardroom, or entrepreneurial venture to the next may be de rigueur for a tiny minority, but it is a non reality and a nonsense for the vast majority of people.
[Brendan] Behan, Patrick Kavanagh and Brian O’Nolan standing outside Neary’s pub in Dublin in the pouring rain waiting for the doors to open after holy hour.
Behan reportedly turns to the other two and says: “The problem with Dublin these days is that there are just no characters.”
[…] “Behan, Kavanagh and O’Nolan – they were tortured souls,” says Dunbar. “They were the only dissenting voices in Ireland at the time, and they paid a very heavy price for it.”
@The Oirish Underclass
Text from Blind Biddy in Beirut:
Rise up ye eejits – yez have nothing to lose but the dole!
@ Mickey Hickey
There is a bit of a contradiction, if you do not mind me saying so, in your comment. Whatever the Germans can be blamed for, the introduction of cheap money is not one of them.
The problem of youth employment is a common feature across economies where there is a refusal of those in employment to agree a set of rules which creates a situation where those without employment are viewed as having the same rights as those that have. Denmark provides the best example of so-called flexicurity.
Germany, of course, also sets a very good example in terms of its excellent apprenticeship schemes but the situation there is not comparable in terms of social equity with that which exists in Denmark.
The question posed is a societal one and can only be answered at the level of the nation state. In Ireland’s case, the answer can be summed up in one word; emigration.
I read Wray’s paper now 🙂 and I wouldn’t call it delusional. Public works schemes have a long history. There are also economies within economies, and people are motivated in all sorts of ‘non-economic’ ways. I am sure you will agree that GDP isn’t the measure of everything.
German companies are enjoying a prime rate of 0.6%. Prime rate in Germany is not exactly what it means in the Angular Saxon world but it is one of the great benefits of austerity as it forced funds out of the PIIGSF to the safest of European safe havens, without currency risk. Thus raising rates for the countries out of which the funds flowed.
The ECB have now reduced borrowing costs for the ROE (rest of EZ) thus cutting slightly the German business advantage. The Euro dropped which benefits us all but benefits the biggest exporter to non EZ countries the most of all.
Its all about jockeying for advantage and on balance the PIIGSF benefit most from the lowered ECB rate. There is now a greater risk of Germany blowing a bubble. I for one will not be crying when they do.
Germany is now riding high on low labour costs and low borrowing costs vs the ROE. All the training in the world will not help Irish youth find jobs in Ireland which is where we need them to prop up the tax revenue and property market. Cuba with a highly educated population has opened up the exit gates to all, hoping to gain from remittances from abroad. The debate is, our investment of $100,000- $200,000 is flying off to benefit some other country.
In Ireland the debate has not even begun. There is actually no serious consideration being given to the shocks to the economy that will occur when the USA wakes up and one of the larger PIIGSSF flies the EZ coop.
I do not in any way shape or form believe that Ireland should find it necessary to forcibly export young people. Bankruptcy of ideas at all levels of society.
Blind Biddy should stop feckin around the Middle East dere is more than enuff ass to kick rite here at home.
@ Miickey Hickey
Denmark is a country comparable to Ireland in terms of location and development, a de facto member of the euro area and swimming in the same international business and economic waters as Ireland. If it does not set us an example, at least in terms of analysis, I do not know what does.
On the other issue, the cat is well and truly out of the bag at this stage, the best quote being from Ollie Rehn who suggested that an inquiry could help end a long-running dialogue between Germany and its critics who “simplify a complex reality in a way that kills any serious policy debate”.
The best simplification would be to say that the governments of the countries of the EU should agree not to out-compete one another through administrative actions which deliberately favour the export sector of their economies over others. There are innumerable examples of such actions, the Commission being left to try and maintain some order. Germany can afford it because of its already highly efficient, in any case, export sectors. Other countries, and notably France, cannot.
The cross-subsidisation inherent in such actions invariably creates losing sectors in the economies concerned. It is these that have given rise to the domestic political forces in Germany insisting on change, many elements of such change now being fought out in the current coalition negotiations.
Indeed, the overriding conclusion that can already be drawn is that it is only such domestic political pressure that can effect change (except in circumstances where action is clearly in breach of binding competition rules e.g. as in the case of the energy sector in Germany where consumer interests have lodged a formal complaint with the Commission).
Expect little in the way of radical change at EU level from your ordo_liberal fellow travellers:
Tepid Talks: A Coalition Devoid of Vision
The coalition taking shape in Berlin between Chancellor Angela Merkel’s conservatives and the center-left Social Democrats will have a huge majority in parliament. But the halfhearted discussion that’s gone on so far suggests that the government won’t tackle big projects — and Merkel is to blame.
Blind Biddy needed a break – and the one-eyed Shia Sheik is providing it.
She was devastated at the death of Patricia_the_Irish_Sovereign_in_Exile – Patricia simply pined away following the conversion of the odious promissory notes to sovereign debt. The sovereign is no more – and her grand daughter is not keen to enmesh herself in futility on the €100 dole in Ireland. Following the foolish ill_thought out decision of the present gov. to close the embassy in Tehran – Biddy is considering accepting the offer to become honourary consul – personally I wish she would come back to take up the reins again at the Blind Biddy Hedge School, the Blind Biddy Hedge Fund and the ICA (Irish Citizen Army). There is no truth in the rumours that she is advising Hiz_bolla and recruiting members of the Irish under_class to the cause or that she is advising Kerry on how to proceed in the region.
An impromptu poll: Does anyone on the blog think Olli Rehn or the organization he is a figurehead for have done anything useful in the European Union since the start of the global financial crisis and if so what is it?
It just occurs to me that thus far no institution of the EU (with the possible exception of the EIB) has come out well of the crisis. I think while the debate goes on here about our possibly overpaid public servants we should give a thought to Olli Rehn and his cohort of senior European Union technocrats.
You see Mr Rehn is paid almost quarter of a million Euro per year (ex any special allowances), in a favorable tax environment. I think this explains a number of things about European economic and monetary policy rather nicely.
Never forget that the European Union has created a layer of wealthy technocrats whose allegiance is to their institutions and who are all political appointees.
they are all badly run and the only hope for improvement is to hire outsiders with track records in these areas.
This is to simplistic. Theyre more mixed then this would let on. Ive known people retrain (and get jobs) through FAS, and have done specific courses (myself) that were helpful while on the dole
Its obviously more difficult to enourage people when they are being made through it by the dole office.So its more compliated, as always. Obviously
first para is a MH quote
Only the expertise of the thrusting, vital, go getting private sector can save us from the collapse of the vulnerable, critical, under siege private sector.
One might ask why the private sector can no longer be bothered training workers themselves, but that might raise too many awkward questions about which sector of the economy is doing the parasitizing.
That is what sticks most in the craw about the right wing narrative of the European component of the global financial crisis – the private sector is seen as both the victim and the hero of global financial crisis when it is the ultimate villain and the most shocking coward.
@PQ: Got that. I was just trying to imagine the Irish trades union reaction (ie: the leaderships of). They would probably be apoplectic. I just thought he was being very tongue-in-cheek. Maybe not.
Basically the guy is saying that every able-bodied adult needs an income (however one defines it) to keep themselves. And parents need an adequate income to raise their kids. I agree with this, but I believe the way to do it is to ensure that those without a waged-labour income are ‘gifted’ one by the state. I know, I know, but we can re-visit this.
The Full Employment metric is neither attainable nor sustainable. Just try to ensure that all available waged-labour opportunities are filled. Its up to the Private Sector [PS] to respond to consumer demand and increase (or decrease) waged-labour opportunities. The problem arises when the PS proffers its Oliver Twist begging bowl and ‘pleads’ with the government for ‘more’ – or else They should be told to ‘shove it’ – and in blunt, undiplomatic terms if necessary. If they cannot, nor will not, provide waged-labour opportunities out of their own resources – that’s it. If they are true entrepreneurs and capitalists – they will. If not, they’re duds and cads.
Frances Coppola on why the job guarantee wouldnt work as advertised.
Vincent Browne writing about “Love/Hate” mentions Niamh Hourigan’s book on Limerick ”
” Understanding Limerick: Social Exclusion and Change ”
The failure to understand eats up a good chunk of Government spending.
Unemployment re engagement is as poor as management of Limerick.
Photos: Press conference calling for destruction of Promissory Note Bonds at Buswells Hotel, 12th November 2013
Ballyhea says NO. I concur.
Methinks very few Limerick citizen_serfs watched Love/Hate – they had witnessed, and suffered through, the ontological reality in their daily lives for far too long.
As to the reasons – the ghettoisation and the disgraceful neglect of education and opportunity provision by a range of governments – 7 of top 10 unemployment black spots are in Limerick City. For certain cohorts, entry to the ‘gangs’ was/is a [to borrow a one-side economic term] ‘rational’ decision.
Limerick – City of Culture 2014. Feck em all says the boys from Southhill!
@ David O’D
Closing the Tehran Embassy Feb 2012 one more serious blunder. Suitcases of bank notes needing an outlet through IFSC (Diplomatic Bags). A rich location for a branch of AIB.
We have no Embassy in Baghdad, we got most of our oil from Iraq for decades. Ireland and Iraq escaped British clutches in the same year. With our success intermarrying Protestants and Catholics in the republic we could solve the Sunni-Shia stand off in no time as soon as Martin McGuinness becomes Taoiseach.
Limerick had a thriving industrial sector on the south bank of the Shannon for decades as we imported grain and exported ham. Then the Yanks pulled the plug in 1932 and what you see today is a city that suffered a shock from which it has still to recover. It used to be a mecca of sophisticated living for Kerry people, there were traffic lights, escalators, elevators. There was Cruise’s Hotel where the Kerry man sat down for lunch and they put two potatoes on his plate. He cut one open and called out they are done you can take them up.
It may surprise you that I would support the terming out of the PN nua for 1000 years at 1% or maybe even 0.01% on a unilateral basis. I also think we face facts that this would involve cutting welfare to the levels of our trading partners, reducing academic salaries to Greek levels, making the tax system a lot less progressive and anti job creation. Finally we would almost certainly have to leave the EU and impose capital controls. I betcha Ballyhea would not like that. They would much prefer the free lunch.
‘It may surprise you that I would support the terming out of the PN nua for 1000 years at 1% or maybe even 0.01% on a unilateral basis.
That’s my line – hence I agree with you; is this the second time?
As for the rest of your comment – the usual balderdash and your innate hatred and fear of the lumpen proles – NONSENSE.
I thought the Kerry man only came to Limerick to find a lady and whisk her pronto, spancelled, behind the Barna Gap.
Still lots of industry in Limerick for educated/skilled but, as you note, the traditionals are long gone. The city centre is struggling to ‘hold’ and it would probably take a genetic combination of Con Colbert, Richard Harris and The Claw to really wake the place up.
Alternatively, free of the shackles of the EU , we could print our way to a Venezuelan standard of living . Or win the lotto.
“Alternatively, free of the shackles of the EU , we could print our way to a Venezuelan standard of living . Or win the lotto.”
From the Independent
“Ms Connolly was now seeking an additional sum of €3,750 a month to rent one of two properties which she considered appropriate. Both properties – at Upper Leeson Street and Serpentine Avenue, Ballsbridge, looked “attractive and desirable”, the judge said.”
If this continues, a Venezuelan printing machine would not be able to cope with the demand.
Last time I was in Dublin, I saw a a very nice house that would suit my daughter. The house looked especially “attractive and desirable”.
I mean, failure is built into any program looking to care for/retrain large amounts of l/t unemplyed people. Obv we should try to do it as best as we can, but also have some reasonable expectations – stop expeting Utopian resolutions etc
The “ms Connolly” story is amazing. Can’t understand why there hasn’t been an outcry about it…….People being kept in the standard of living to which they have become accustomed. Ah Ireland……Utopia for some. Must have been an Irish politician who thought that up……! Complete bollox but shows just how f****d up the place is.
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