The Labour Force Survey: Quarter 4 2019 - NERI point to a growth in part-time work

18 Feb 2020

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The latest Labour Force Survey results for the final quarter of 2019 show a number of welcome trends in the Irish labour market.

The seasonally adjusted unemployment rate fell to 4.7% in the final quarter of 2019 from 5.6% in quarter 4 2018 amid strong employment growth of 79,900 or 3.5%. Long-term unemployment is down to 1.6% from 2.1% in the same quarter last year. However, economists at the NERI point to a need to take a closer look at the data to discern other, less welcome trends.

Thirty-eight per cent of employment growth over the year was part-time employment (30,400), compared to a national part-time rate of just 20.9%. Related is the number of underemployed in the Irish economy, barely changed over the year of strong employment growth (108,500 to 108,400) in quarter 4 2019. This is a particularly precarious form of employment, associated with high levels of in-work poverty and financial insecurity.

Growth in the number of self-employed with no employees also took up a disproportionate share (10.3%) of employment growth compared to a share of 4.1% of overall employment.

Significant regional differences persist in labour market outcomes. A 3.7% unemployment rate in the South-West is surely close to full employment. On the other hand, the South-East remains a notable laggard at 6.8%.

NERI economist Ciarán Nugent argues that “the persistence of poorer labour market performance for young people is not given enough attention.”  Although the participation rate tipped up slightly in the past year (62.2% to 62.7%) it is still only 1.5 percentage points above the rate in the final quarter of 2012 and 3.5 percentage points below the last quarter of 2007. Participation rates for the younger cohorts remain well below rates recorded in the years leading up to the financial crisis. For 15-19-year-olds, this dropped from 43.5% in quarter 4 2006 to 20.4% in quarter 4 in 2019 and 86.2% to 70.5% for 20-24-year-olds in the same period.

Colleague Paul Goldrick-Kelly points to the absence of international comparisons of relative labour market performance. “Falling unemployment should be welcomed but that rate doesn’t represent the be-all and end-all of labour market performance. We rarely hear about our relatively low levels of aggregate employment – in terms of the percentage of the working population employed, we are distinctly average by European standards.”

Large gaps in labour market engagement persist between men and women with a difference of 12.4 percentage points in participation rates (69.0% v 56.6%) and 10.8 points in employment rates (75.6% v 64.8%), likely in large part due to the continuing excessive cost of childcare. Although the Irish employment rate comes in at average relative to the EU28 (69.6% v 69.6%), the economy lags way behind top performers such as the Netherlands (78.4%) and Sweden (78.1%) due in large-part to barriers for women.

A drop of 13,000 skilled trades’ workers in the context of continuing problems in housing is also of concern.