DUBLIN — Anthony Roche is urging his unemployed son to emigrate to Australia from Ireland to escape joblessness stemming from the country’s economic collapse.
“I’ve seen the good times and the bad and these are the worst,” Roche, 45, who works a day or two a week after closing his business laying floors for bars and restaurants 18 months ago, said outside a welfare office in Dublin. “There are plenty of people there to work, but there isn’t any work out there. That’s why people are leaving these shores again.”
While signs are emerging that Ireland is beginning to recover 15 months after an international bailout, the government says the economy is in the midst of the worst crisis since World War II. The nation’s unemployment rate, at 14.2 percent in January, is close to the highest level since the 1980s when the country last endured similar austerity measures. Only Spain and Greece have a higher jobless rate in the euro region.
Unemployment may climb to 14.6 percent this year, the central bank forecast on Feb. 2, as companies such as Royal Bank of Scotland Group and Allied Irish Banks prepare to shed more workers. Prime Minister Enda Kenny said Feb. 5 that the government is finalizing policies to provide assistance to people at risk of being out of work for the long term and to help small businesses with loans.
“Unemployment is a huge problem for Ireland,” said Michael O’Sullivan, head of portfolio strategy at Credit Suisse Private Banking in London. “Ireland has the additional strait- jacket of the euro-zone austerity mantra, which for Ireland may have the short-term effect of creating lots of unemployment.”
Exports grew about 4 percent last year, as U.S. companies like Pfizer that operate in the country grow. But the gains haven’t been enough to offset job losses in the retail, construction and financial-service industries.
Irish unemployment tripled to an average 14.2 percent last year from 4.5 percent in 2007, as the economy shrunk by about 15 percent as a real-estate bubble collapsed. Emigration rose to the highest since the 19th century in the 12 months ended last April, with about 76,400 people leaving Ireland during the period, according to the Central Statistics Office.
Worse, over half have been jobless for more than a year and with 30 percent of people aged 24 and under are out of work, the office said in its quarterly employment survey.
“Unemployment among young people early on in their career can have a scarring effect right through their working life,” said Philip O’Connell, an analyst at the Dublin-based Economic & Social Research Institute. “There isn’t enough being done in terms of encouraging and assisting people back to work.”
Derek Walsh, 24, who graduated with a degree in mechanical engineering in 2008, hasn’t been able to find a job in his specialty since leaving college.
“There are more than a hundred people going for every engineering job and they all demand experience,” Walsh said in front of the welfare office. “It would even turn you off looking at them. I’m looking at leaving this summer.”
Kenny swept to power last year with a promise to fix Ireland’s “jobs crisis.” He said in November that his government is aiming to create 100,000 positions by 2015. Last year, the government reduced the sales tax to try and boost jobs, and it has cut benefits of about 370 unemployed people since April for not cooperating with measures to find work.
Many of the unemployed are “among our most talented” and are “facing a dole queue or emigration,” Kenny said during a Feb. 3 speech in Cork. “I, and the rest of Cabinet, am working day and night to get them into work.”
The government is planning a partial loan guarantee for smaller companies and a system of loans for startups. Welfare Minister Joan Burton will detail this month a plan to figure out those most at risk of long-term unemployment.
The new jobs initiatives may be too little too late, according to James Wickham, head of the school of social sciences at Trinity College Dublin.
“They are pretty irrelevant now because it’s a demand issue, and there are simply not jobs there,” Wickham said. Measures that push people into jobs “assume there is employment there, since it’s not the case at the moment, that would be merely punitive and meaningless,” he said.
Outside the social welfare office in central Dublin just off the campus of Trinity College, floor layer Roche says he is bracing for a year of suffering.
“This is going to be the hardest year of all, much harder than last year as the government is cutting everywhere,” he said. “I am trying to get my youngest son to go Australia if he can get a visa. I’ve told him we’ll even put together a bit of money to send to him every month.”
With assistance by Lukanyo Mnyanda in Edinburgh.