When we consider the unemployment rate, now in 2019, is at 5.4%, it is a very different picture to that which we experienced in 2012, when it peaked at 15.9%.
When you look at the long-term unemployment figure you find that it is now at 2.1% as against 9.8% in 2012. But that is still 50,000 people. 9,000 have been unemployed for more than 10 years with 8,000 young people (aged under 26 years). But we should never forget that behind each of these statistics is a person or family. We should put lie to the claim that welfare payments are too generous and that unemployed people are better off on the dole. These people deserve to have every opportunity to develop their careers, to have viable income streams and experience the dignity of decent work.
The causes of long-term unemployment are multiple and complex and are often very difficult to reverse. They are often categorised as cyclical or structural and while we know that cyclical unemployment usually occurs consequent on a recession, structural unemployment happens when there's a mismatch between workers skills and the skills required in the job market as new sectors in the Labour Market emerge. The longer workers remain outside the Labour Market the more deskilled they become, which can result in a deterioration of self-confidence and indeed lead to significant mental and physical health issues.
Alongside the serious financial effects including poverty and deprivation social exclusion is also a key feature. Vulnerable groups who find it difficult to get jobs face a number of barriers including limited English, lack of work experience and contacts and a history of addiction or time in prison.
Just like the causes of long-term unemployment, the remedies are also multiple and complex. Considering the experiences of other European countries and Irelands previous experience in the 80s and 90s, what we have seen in the last decade is Government taking a more activist approach on unemployment. This is a shift in policy from financial support for unemployed people, to an emphasis on the responsibility of claimants to take action which will move them back into the workplace. Probably the most controversial manifestations of this paradigm were changes to the One-Parent Family Payment, reduced rates for young people and the dreaded Job Bridge Scheme. However, currently, the State through Community Employment Schemes, Back to Work interventions and Enterprise Allowances spent in the order of €.8 Billion Euro per annum on such schemes.
Direct rewards to employers who offer employment opportunities to people long-term unemployed amount to an average of €30 million per year the point to be emphasised here are, I believe, that at least some of these schemes amount to corporate welfare. While undoubtedly it is vital that such social transfer is provided given the current level of low pay in this country, it would, in our view, be far more beneficial if employers paid decent wages for the labour produced.
The current level of social transfer required today could be reduced if the level of precarious work available was decreased.
We all know that no worker can survive on the National Minimum Wage as the sole source of income. Our policy in Congress has always been to achieve a living wage while we believe should be the minimum income for any worker. While we are unlikely to ever see the statistics, I think the list of employers claiming the Job-Plus subvention would make interesting reading. I suspect the same companies would not be devoid of profit, do not require State subvention and would be perfectly capable of paying a living wage.
Across Europe one of the main policy instruments used by Governments to tackle long-term unemployment has been to introduce a gradual reduction in the value of jobseekers payments over time. This is not a policy instrument available to us as our welfare payments are paid at a flat rate and are not earnings related. However, Ireland has started to use sanctions and we are seeing increasing use of these. Nordic countries and some continental countries have also adopted the use of private companies to deliver activation services. In some cases, they have also reduced Jobseekers Payments to young people.
Congress consistently opposed the introduction of the Job-Path Scheme, which is operated by two private companies who receive in the order of €3,000 per jobseeker upon achieving sustainable employment. The recent WIT report on the topic highlighted that none of the interviewees reported positive experience with this programme. The researchers called for these schemes to be discontinued and we agree with the proposition.
I think the most recent research carried out by NESC, on which we both our organisations are represented, reference some of the main difficulties being experienced by jobseekers. While they find the welfare system to be generally supportive of jobseekers it did point to key gaps e.g. people find it difficult to get information on all of the options available to them. It can be very challenging for vulnerable job-seekers to engage, particularly, where there is a history of jobseeker households. The report also pointed to the requirement for more intensive engagement of support for those most distant from Labour Market e.g. literacy or education issues.
Congress has always strongly supported alternatives to school-based education. I personally, take very opportunity available, in my capacity as a member of the Apprenticeship Council, to advocate for further roll-out of the Apprenticeship model of education. This as you know, endorses dual learning and earning. This is very prevalent in countries such as Germany, Finland, and Denmark. Where there are particular barriers, people need support pathways such as pre-apprenticeships programmes which would automatically roll onto full apprenticeships. I am a great believer in everybody having access to education through various routes. This as you know, provides a range of benefits to the individual, it lifts confidence, it provides dignity, it allows the individual to progress and achieve throughout their lives. Education doesn't have to be just for those who get points in school it can be an option for all and it can provide the necessary self-development pathway.
In conclusion, I think it is fair to say, that we have developed a lot of very useful data which indicates beyond doubt that we need far more intensive engagement and support for those distant from the Labour Market.
Employers need to exercise their corporate responsibility and pay people a decent wage for work done. The scourge of the low pay and precarious work mentality within certain economic sectors in our economy needs to be eradicated. From our point of view, the best delivery mechanism for a fairer distribution of wealth is not through corporate welfare schemes but through a reformed Collective Bargaining System, where workers can bargain the real value of their labour.
