Despite government bluster, it is clear from the latest live register and GNP figures, published today, that the real recession is far from over.
The number of people on the dole has hit another all time high of over 450,000, with a rise of nearly 15,000 in the last month alone. The live register would be well over half a million were it not for the return of mass emigration, which the ESRI expects to reach a whopping 100,000 between this year and next.
GNP stretches its losing streak to 8 quarters, or two full years, and is now at levels not seen since 2003 and 2004. GNP is widely regarded as a better measure of the strength of the domestic economy. It excludes the multinational sector whose profits are repatriated.
Fallout from the property and construction bust sees no sign of abating with this sector’s contribution to the economy having more than halved from its quarterly peak of €3.6bn Q1 2007 to less than €1.6bn in Q1 2010. Last month’s seasonally adjusted live register figures showed that men joining the dole outnumbered women by four to one, as job losses in the construction sector continue to mount.
The Government is talking a good talk and would have us believe that their ‘tough decisions’ are bearing fruit, and that the economy has ‘turned a corner’. The Minister for Finance has seized on the quarterly national accounts, published today by the CSO, to proclaim that ‘Ireland is out of recession’ because GDP grew in the first three months of the year.
Long-term unemployment is the single greatest social and economic challenge facing the country, but the Fianna Fáil government continues to obsess with the mess it created in the public finances and the banking system.
Fianna Fáil’s approach to the economy is self-defeating. By focussing almost exclusively on bailing out the banks, the government has lost sight of what is really important. They have so far refused a tackle a jobs crisis that continues to spiral out of control.
The Labour Party has proposed a series of job creation initiatives including:
• A Strategic Investment Bank which would use €2bn, less than 10% of the total, from the National Pension Reserve Fund to support commercial investments of up to €20bn in critical infrastructure projects and innovative start-ups and SMEs.
• An SME Working Capital Guarantee Scheme which would ensure that viable small and family businesses can get the loans they need.
• A €1.15bn jobs fund to support training schemes and labour intensive capital investment.
• A PRSI holiday for employers taking the long-term unemployed off the dole.
• A Graduate & Apprentice Programme which would guarantee relevant, work-based training and an opportunity to obtain new qualifications for all young people out of work.