Neither Fair or Equitable - The Impact of Government Cuts on Traveller Services

Pavee Point published a report yesterday, on the impact of cuts over the last five years on Traveller projects and services. The report, authored by Brian Harvey, can be downloaded here.

Pavee Point asked us to provide a brief response to the report at the launch yesterday, here is the text of that response:

One of TASC’s main roles is to analysis Government budgets and to make alternative policy proposals. We also focus on transparency and democracy. This report, published today by Pavee Point, has relevance for all those issues.

After five years of austerity policies, we should not be easily shocked. However, the details and figures contained in this report are extremely stark and tell a story that exceeds in its bleakness, many of the reports we have been hearing since the crisis began.

Where government spending has been cut by 4.3 per cent, the voluntary and community sector is seeing a yearly cut of 8-10 per cent.  Cuts of this level have a devastating effect on the communities these programmes and organisations serve.

However, cuts in the magnitude of 86 per cent in Traveller education and 85 per cent in Traveller accommodation, 63 per cent in Traveller organisations over the same period far outstrip those made in other areas and it is difficult to see an explanation for this level of cuts focused on a single community other than that of marginalisation and exclusion.

In drawing together these figures and presenting a picture of cuts over five years, this report has made it possible to view a more comprehensive and honest picture of how the Traveller Community has been disproportionally affected by Government policy.

However, as the report itself outlines, the compilation and analysis of these figures was a difficult task. The budgetary process and the lack of sufficient information and data released by Government hampers contemporary research and analysis into Government spending and outcomes.

Even by Ireland’s standards, Budget 2013 was backwards step in terms of budget transparency, with some departments, such as Justice and Equality, Environment, Community and Local Government and Education and Skills providing a weaker level of detail, or spending under subheadings than the previous year.

We had to wait months until the revised estimates gave greater information, by which time, most of the budget measures have been passed and the media debate had moved on. This makes it very difficult for civil society, communities and citizens to engage and mobilise on decisions which affect them.

As the report further demonstrates, much of the support available to the Traveller community comes by way of supports available to disadvantaged communities and is not Traveller specific. This means that again, it is difficult to assess the level of support accessed by the Traveller community and therefore the level of cuts suffered by it.

In 2013 there should be no excuse for the poor level of statistics in relation to Traveller participation and outcomes in the education sector and the monitoring of the consequences of the withdrawal of services as outlined in the report.

The current Programme for Government agreed by Fine Gael and Labour contains a strong commitment to openness and transparency. Not least, on page twenty three, the pledge that “We will open up the Budget process to the full glare of public scrutiny in a way that restores confidence and stability by exposing and cutting failing programmes and pork barrel politics.”

However, confidence and stability also comes from debating and understanding the rationale, and possible consequences of budgetary decisions.

A proper system of equality budgeting would assist in this task.

One of the consequences of the closed nature of budgetary decision-making over the past few years is that budgets are passed in a vacuum, where the multiplicity of impacts on certain groups in society is not adequately considered or debated.
If you decide to target secondary benefits for example, there is a good chance that those who are most dependent on social transfers will suffer the most.

This report demonstrates the cumulative effects of decisions made across different departments on one such group. Budgets should be examined for the cumulative effects on specific groups, including Travellers, across departments and on a multi-annual basis, rather than lurching from year to year.

One of the most disappointing aspects of Government policy during the crisis is that it threatens to roll back progress made in the preceding years. Progress, as stated in the report, which was hard fought and hard won.

The Government’s main task during this crisis, as articulated by the Government (previous and current) itself, the media and our European partners is to reduce the deficit and return to growth.

However, disinvestment in Traveller services and facilities, in particular, education and accommodation, is a false economy. A return to growth demands investment, in particular in education and in capital projects.

It is not clear what is to be gained in the long-run by further marginalising a community or disinvesting in its future.

Over the past number of years, many organisations and groups (e.g. TASC, SJI etc.), have provided alternative policies for closing the deficit, ones that would not increase inequality.

There is no need for any group in our society to bear the disproportional impacts of cuts that the Traveller community has, these are political choices, not economic ones.

Debt, Growth and Coding Errors

Tom McDonnell: Reinhart and Rogoff's finding that the growth rate starts to decline once the public debt to GDP ratio exceeds 90% has become embraced as a stylised fact by the commentariat and in particular by the austerians. However, a recent paper by Thomas Herndon, Michael Ash and Robert Pollin has critiqued this finding. As Slate reports here, Herndon et al. find that the Reinhart and Rogoff result is attributable to a coding error, and they also raise other methodological objections. Herndon et al. find that overall the evidence contradicts Reinhart and Rogoff's claim that public debt loads greater than 90% of GDP consistently reduce GDP growth.


It will be interesting to see how Reinhart and Rogoff respond to the Herndon critique.


 

Optimal taxation of top incomes

Tom McDonnell: You can find an interesting paper on optimal top marginal tax rates here.… The authors find that the optimal top marginal tax rate converges to about 2/3. You can read a synopsis of the findings here.

Bringing Balance to Imbalance

Tom McDonnell: The results of the EU Commission's review of macroeconomic imbalances can be seen here. Andrew Watt attacks the partiality and findings of the report here.

Conference on "Understanding the Changing Worlds of Capitalism", May 1st

Understanding the Changing Worlds of Capitalism:
New Perspectives on the Political Economy of Work, Production and Employment Regimes

A Research Conference
NIRSA/ Sociology
May 1st 2013, Renehan Hall, NUI Maynooth

Sponsored by the European Research Council and the Irish Research Council

The various forms of capitalism are in crisis, as are many of the theories that have dominated understandings of capitalism in recent decades.  This conference draws together leading international scholars to examine changing European capitalisms, with a particular focus on how the organisation of work, employment and production regimes is changing. We explore how theories must shift to account for changing capitalisms.

Speakers include Dorothee Bohle, Rossella Ciccia, Bernhard Ebbinghaus, Eoin Flaherty, Béla Greskovits, Peer Hull Kristensen, Frances McGinnity, Lars Mjoset, Mary Murphy, Seán Ó Riain, Luis Ortiz, Karen Shire, Markus Tünte. 

Full programme and information here.
 
The conference explores a variety of theories of political economy (e.g. Polanyian, institutionalist, pragmatist); different forms of capitalism in Europe (liberal, Christian democratic, social democratic, post-socialist, Mediterranean); and various institutions shaping work (e.g. welfare regimes, industrial relations, family, transnational work and technological change).

Registration is free but places are limited.
Please register here.
Enquiries to newdeals@nuim.ie
Click here for information on how to get to NUI Maynooth Campus by road or rail

Workshop on Industrial policy in Comparative Perspective, Thursday April 25th

Whither Industrial Policy? The Future of Public Institutions and Economic Development

3-6 pm, Thursday April 25^th 2013
Institute of Bankers, 1 North Wall Quay, Dublin 1
Sponsored by NUI Maynooth (NIRSA/ Sociology) and UCD Geary Institute

Globalisation, regional economic clusters, open systems of innovation, financialisation, legal restrictions on state aid and a range of other factors appeared to have consigned industrial policy and the developmental state to history. However, as economies struggle to restore growth and seek models of sustainable prosperity, there is renewed interest in the role of public institutions in promoting industrial and regional development. Moreover, recent decades have seen significant experiments with new forms of ‘old’ institutions – ranging across the industrial development agencies of Israel and Taiwan, the state investment banks of Germany and Brazil and the diverse network of agencies promoting innovation in the US.

This workshop explores the new forms of industrial and innovation policy that have emerged in recent decades. It examines their distinctive features, limitations and potential and asks what futures there might be for a developmental role for public institutions.

3-4.20 Public Institutions, Innovation and Growth in the Knowledge Economy  

Chair: Seán Ó Riain, Sociology/ NIRSA, NUI Maynooth

Danny Breznitz, College of Business, Georgia Tech

“The Diverse Paths to Rapid-Innovation-Based Growth: The Strategic Role of the State”

Shiri Breznitz, School of Public Policy, Georgia Tech

“The Fountain of Knowledge? University Technology Transfer and Economic Development"

4.20-4.45 coffee

4.45-6 Round-table Discussion

The Role of the State in Development Strategies in a Changing Economic Landscape

Chair: Niamh Hardiman, Geary Institute and SPIRe, UCD

Short contributions from the following will be followed by discussion.

Seán Ó Riain, Sociology/ NIRSA, NUI Maynooth

Philip O'Connell, Geary Institute, UCD

Aphra Kerr, Sociology/ NIRSA, NUI Maynooth

Patrick Paul Walsh, School of Politics and International Relations, UCD

The workshop is funded by the European Research Council and the Irish Research Council for the Humanities and Social Sciences. It is sponsored by the ‘New Deals in the New Economy’ project at NUI Maynooth (NIRSA/ Sociology) and ‘The Political Economy of the European Periphery’ at UCD Geary Institute.

Registration is free but places are limited. To register please email geary@ucd.ie  with the subject line “Industrial Policy” before Monday April 22nd.

Information on Venue and Transport is available here 

'Social Security for All'

Nat O'Connor: Compass in the UK have produced a short briefing document entitled 'Social Security for All' as a way of (re)making the case for the welfare system/welfare state. Although they are writing in a UK context, a lot of the principles and basic challenges they highlight are very relevant for Ireland.

What's a Euro anyway?

Is a euro in a Cypriot bank, locked down by withdrawal limits and capital controls, the same as a euro in an Irish or French bank? 

Is a euro sitting in, say, a payroll account in Laiki with a balance of more than €100,000 (and subject to an unspecified “haircut” on Thursday ) the same an “Irish euro”?

They’re both euro, both promises to pay the bearer, but honestly, do you have a preference? Of course you do. You’d prefer your money to be outside Cyprus. You’d prefer an Irish euro to a Cypriot one. So they’re not the same. Do we even have a single currency now, then? What does the Euro mean?

And how did this happen? At least in part, it happened because all the finance ministers of the Eurozone sat around earlier this month and let the Cypriots leave the room with a proposal to make depositors pay for bank losses, including insured depositors with balances of less than €100,000. They rowed back on that part, but you can’t undo the damage of their having taken it seriously to begin with.  Imagine a snowed-in family just once agreeing “if we get really hungry, we can eat the rabbit”. You can take that back all you like – everybody knows the rabbit’s not safe any more. He’s not just a pet, he’s protein. Depositors aren’t just protected customers now, they’re also a source of money to save the bank. 

We sat back and let that happen – all the Eurozone countries did. We let deposits in Cyprus undergo that subtle shift in meaning. We let their banks be closed for ages, with devastating impact on small firms and families. We let their tax rate be changed. We let them hang out there, hoping it would save us, the rest of this uneasy union. Where does that leave solidarity, in this European Project under our presidency?

Just now, you’d prefer an Irish euro to a Cypriot one. Remember that feeling, because, as Martin Niemöller might have written were he more interested in money, and living in more peaceful times, “First they came for the Cypriots ...”

Sheila Killian

@islandtotheleft

Drivers of progressive tax

A recent OECD  report olooks at the progressivity of income tax systems in their 34 member countries. A progressive tax is often simply defined as one where you pay a higher rate at higher income, but the OECD goes a little further, incorporating social security contributions, child benefits and some other measures. They also consider different sorts of taxpayers – single people and single-income couples, both with and without children. The big limitation of their analysis is that they only look at how progressive the tax system is up to the level of twice the average wage. This matters because countries with a welfare system targeted at low earners will tend to be progressive at those levels. In fact, across the OECD, taxes are more progressive at low incomes, and less so as incomes rise. Despite this caveat, the report has interesting analysis, and gives a really interesting picture of where Ireland is, albeit at lower income levels.

So how do we fare, as a country?  Well, we stand out in a number of ways. The headline result is that on average our tax system looks really progressive – we’re at or near the top of most tables across the OECD. When you drill into our individual charts, however, you can see that this is largely driven by how our system works at the lowest income levels. We are progressive here, particularly when social security contributions are taken onto account because the USC is charged a lower rate in this level.  As you reach and exceed the average industrial wage, our progressivity drops dramatically, which is why in Ireland in particular it would be nice to see this study extended into higher income brackets.

We show a few interesting kinks  in our system especially when you compare tax wedges and tax rates for taxpayers with and without children. Much of this kicks in at income levels of around €50,000 and probably derives from the shift from the low to the high tax bracket. 

The analysis is tantalising, but because it only looks at incomes up to around €85,000, it sheds no light on the fairness or otherwise of higher taxes on the higher-paid. The full report is available here  

Sheila Killian

@islandtotheleft

 

Effects of the minimum wage on the jobs market

Tom McDonnell: TASC made a short submission last week to the Labour Court review of the JLC wage agreement mechanisms. The submission is available here.

The Joint Committee on Jobs, Enterprise and Innovation published a report in February on actions to address youth and long-term unemployment. It can be found here. One of the recommendations (Number 26) states that there should be an investigation into the effects of the minimum wage (both positive and negative) on the jobs market. This is a sensible recommendation. The independent Low Pay Commission (LPC) in the United Kingdom does this every year. What does the evidence suggest?;

The LPC's 2012 Annual Report is here and their discussion of the minimum wage's impact on the UK's labour market begins on page 48 of the pdf. They state that: The general consensus...is that the NMW (i.e, the national minimum wage) has not significantly affected employment . 

Both the theoretical and empirical literature are ambiguous concerning the impacts on employment. While the standard competitive model suggests there should be a negative effect on the jobs market, institutional models and dynamic monopsony models both suggest that the effect is actually much less clear cut. Increased aggregate demand and reduced search costs are just two reasons why the effect on net employment might be minimal or non-existent. Recent empirical work suggests minimum wage have little or no overall effect. See for example this study by Arindajit Dube, William Lester and Michael Reich.

John Schmitt asks why the minimum wage appears to have 'no discernible effect' on the minimum wage here while Barry Hirsch, Bruce Kaufman and Tatyana Zelenska try and explain the lack of effect on employment here through the framework of differing 'channels of adjustment'.

While innovative solutions to the jobs crisis are needed, reduced levels for wage floors are unlikely to be helpful in reducing unemployment. The major effects would likely be to increase financial hardship and vulnerability for low wage workers, and increasing income inequality, without any meaningful impact on overall employment.

Pension Fund Charges

Jim Stewart, School of Business and Bridget McNally, NUI Maynooth, have written "A Note on Pension Fund Charges in Ireland". This is Working Paper No. 5 from the TCD Pension Policy Research Group.

A PDF is available on their website (click here).

London Debt Agreement

Tom McDonnell: Today marks the 60th anniversary of the start of negotiations concerning post war debt relief for Germany. The "London Agreement on German External Debts", also known as the London Debt Agreement, was a crucial component of Germany's post war economic miracle. You can find the text of the agreement here. The guardian has coverage here and Deutsche Welle has coverage here.

Martin Wolf

Nat O'Connor: Martin Wolf, chief economics commentator at the Financial Times, was in Dublin yesterday, to deliver a talk to the TCD Phil society. TASC helped sponsor the event. The topic of his talk was "The State of Economics". Despite refering to this as the "most arid" of the topics that he had offered to speak about (and you can blame the TCD Phil committee for the choice), Mr Wolf made a number of observations that confirm, in his estimation, the need for a major rethink of economics.

"We did not know what we thought we knew" about the economy. That was one of the strong themes of Martin Wolf's presentation. He talked about his own, belated, interest in the work of Hyman Minsky. Minsky posed a deceptively simple (and for years ignored) question to macroeconomists. Minsky argued that for any model of the economy to be realistic, it had to allow for a Great Depression as one possible outcome. Yet, orthodox macroeconomic models of recent decades were simply incapable of allowing for that. In other words, no matter what configuration of variables were used in those models, they did not and could not allow for a major crash. Little suprise then that the crash was not predicted and, moreover, that many prominent economists thought that inflation control had eliminated the possibility of such a major crash occuring.

Mr Wolf has come to the conclusion that the macroeconomic paradigm "failed" and the orthodoxy was simply "wrong", in relation to the importance it gave to inflation targeting and the mistaken belief that "cleaning" after a crisis would be cheaper than "leaning" against one, in terms of Government policies to prevent a crisis from occuring.

What this implies, he said, is that a good deal more leaning against risky behaviour is required by governments, including regulation of banking, less risky financing of property, and much larger counter-cyclical capital investment.

In hinting at what a new economic paradigm might look like, Mr Wolf used the analogy of a bridge building project. Although the fundamental laws of physics apply to the construction of bridges, we do not ask theoretical physicists to undertake their design. Rather, we employ the profession of engineers, who have an array of practical skills, including rules of thumb, that better qualify them to oversee the construction of a durable bridge in the real world. By analogy, we need more "economic engineers" in future rather than theoreticians to advise governments and business about how the economy works in reality, rather than according to the idealised, orthodox models (the same models, I might add, that failed to allow for the possibility of the major economic crash that we just experienced).

In relation to Ireland, Mr Wolf noted that the interests of taxpayers were "sacrificed" for senior bondholders, seemingly due to pressure from the EU. He described this as "insane" and "immoral" and noted that the blanket guarantee was a "catastrophe" that resulted in Ireland holding a great deal of debt that we shouldn't have. With that said, Mr Wolf did express the view that Ireland's economy was doing better than others, such as Spain, with their unemployment over 25 per cent and youth unemployment over 50 per cent. He also expressed concern about the French economy. Crisis in France would of course strike to the heart of the Euro zone and EU economy, which will accelerate the need for changes to EU-level economic policy.

The question I would then pose is whether the EU is capable of seeking a new paradigm, with a greater role for practical "economic engineers", or whether EU policy (to Ireland's disadvantage) will continue to be dictated by a failed, theoretical economic orthodoxy.

Ireland Drowning in Private Debt (4 of 4)

Paul Sweeney: Ireland has many core strengths. It has a well-educated workforce, albeit with too many unemployed, skills are being lost, there is high emigration and very high debt, much of the public which was run up as private corporate debt. It one of the most open economies in the world; we export a high proportion of our GDP and these exports are high value added and are largely recession-proof, and include a high proportion of service exports. We are running a balance of payments surplus. The programme of public sector reform is progressing well.

In spite of the severely damaged reputation of Irish business, the World Bank listed Ireland as 9th best place to do business out of 183 countries. Taxes are extremely low on business and employers’ social contributions are amongst the lowest in the world. Ireland has a barrage of state agencies devoted to assisting businesses. The rise in productivity (ULC) and on the much more useful wider definition of competitiveness , Ireland performs very well, though there are issues with our international reputation for business, and also serious problems for domestic firms in access to credit and also due to the collapse in domestic demand. The official “pro-business” culture was so uncritical that it contributed in a major way to the economic collapse and to the collapse of many viable businesses too. That mind-set needs to be addressed.

This relative stability in real incomes, in welfare rates and in public employment is the key to the explanation of why there has been no rioting in Ireland, despite our travails. In the circumstances, these are equitable income and welfare policies.

It is crucial that the core EU economies which are performing well should act in solidarity and not in punishment to the underperforming peripherals.

The best action would be an EU-wide coordinated stimulus. There is no shortage of social and infrastructural needs and refurbishment in Europe. But the cut in the EU Budget last week does not auger well for such intelligent action at EU level. However, large countries may yet take action, individually or in concert.

A Common Fiscal Policy in Europe (and a coherent Banking Union) is key to addressing inequality, sorting out the banks and boosting demand by underwriting an EU-wide stimulus programme. It may begin with a small budget overall, but a small budget in EU terms is still a lot of cash.

It would be preferable to have tax coordination rather than harmonisation where member states may set rates within bands, though a common tax base for companies makes sense in a single market. This means that Ireland’s low Corporation Tax regime should be re-negotiated as part of the deal on the socialised bank debts as we move towards greater fiscal union. The Irish government is making a policy error in its undying defence of its low Corporation Tax rate and against the FTT, while it simultaneously seeks assistance on Ireland’s unsustainable bank debts.

So what can the IMF as a key part of the Troika do to further assist the Irish people?
It is the view of Congress that the IMF has been the least negative member of the Troika in Ireland, with more pragmatic view of what needs to be done. However, there are some issues on labour market “reforms” with which we are unhappy.

It is our impression that the IMF would have insisted that the Irish people should not carry the total burden of the banking adjustment alone. Regrettably, the ECB, while moving considerably from its initial position, has insisted that the Irish Government/taxpayer repay the bank bondholders in full, in order to safeguard the European banking system. Last week’s deal on the promissory notes on the two dead banks, while a great improvement, still means the bondholders are left untouched.

While the EU banking reforms are progressing, it is unclear whether they will go far enough to address the Geithner Doctrine that no big bank must fail nor any bondholder must be left behind. It is vital that the sovereign and public debts are separated and that Europe assists Ireland on its socialised debt. We are being punished for being the first in dealing with our failed banks and for the foolishness of the government which guaranteed all the creditor as well as the depositors of the banks. The people threw that government out for that and for its appalling economic policies, which squandered much of the real sustained progress of the Celtic Tiger period.

Without a significant deal on Ireland’s €64 billion bank debt burden, there is little chance of economic recovery in the near future. Figures from Eurostat show that Ireland has paid more for the bank crisis than any other EU state. So far, the bank bailout has cost us €41 billion, while Germany – with an economy almost 20 times our size – has paid €40 billion. We have also paid more than the UK, France, Portugal and Spain.

The Irish people’s recent experience of capitalism is that when wealthy bankers and bondholders take risks that fail, the public bails them out. Combined with the decline in labour’s share of national income over the past three decades, economic policies and governance must change fundamentally.

While the IMF is not in favour of domestic stimulus, especially in crisis countries, there is a strong case for an EU-wide action for a stimulus. The IMF commendably revised it multipliers in the light of the depth of the recession and other factors and this means that a stimulus in Europe would work every effectively in reducing its vast unemployment of 26.06 million.

However, the lack of interest by the European elite in dealing with the vast level of unemployment in Europe threatens its institutions, including democracy itself.

Ireland Drowning in Private Debt (3 of 4)

Paul Sweeney: Employment is the key indicator of a successful economy. Unemployment is very high at 14.6%. This is up from 4.3% for many years. Employment peaked at 2.1m but is now down to 1.77m. The number of unemployed was 325,000 persons at Q3, 2012.

Emigration is taking the heat of increased unemployment. The number of job losses was 360,000 down from peak in 2007. 87,000 people left Ireland in year to April 2012 and 53,000 entered, leaving a net figure of 34,000.

Labour market participation is down as people are staying at home or in education. A key indicator of unemployment is those who would like to work but who stay in education or at home because they are discouraged workers. The total of those who would like to work was up to 25.6% at end September 2012 as Figure 2 shows.

FIGURE 2:

Source: CSO, Indicators of Potential Labour Supply in QNHS QNQ32

We have seen that industrial employment has been in decline each year since the Crash of 2008 and it has not stabilised yet. If we are lucky, we may stabilise on job losses in 2013.

However, the real issue here and in Europe is that there is a growth of precarious employment, as the following graph (Fig 3) shows. As full time jobs declined – rapidly and by 360,000 since peak in 2008 – there was a rise in part time employment. Indeed, one could believe that many once full-time jobs had become precarious jobs. It can be seen that the rise in part time jobs was around 15 per cent while full time jobs fell by over 21 per cent.

FIGURE 3: Growth in GDP, GNP, Full-Time & Precarious Employment

Source: CSO National A/Cs & QNHS

This growth of long term unemployment is illustrated in the following graph.

FIGURE 4: Growth in Long Term Unemployment, 2007-12

Source: CSO & M Collins, NERI

The future outlook is hardly encouraging. It appears to be for more or less jobless growth, according to official data including the IMF as Table 1 below shows:

TABLE 1: Unemployment Projections and Estimates of the Unemployed, 2012-2017

Source: NERI QEO Autumn (2012:9) and M Collin’s calculations.
Note: Estimate assumes the labour force remains constant to 2017 at the average level for the four quarters of 2011 (2,113,975 individuals).

The key issue is how are we dealing with the unemployment problem? The shift to active labour market policies is welcome, but we in the unions constantly ask, what is the point in training people when there are few jobs? We are constantly told by workers who have been trained that it is really demoralising when they end up with no jobs after “training”.

Policy should be informed by the existing situation, its likely duration and the composition of the workforce. All economic forecasts in recent times do appear to be overly-optimistic and that should inform a realistic outlook on employment.

Figure 5 below shows that the jobs being created and found by young people in Europe are not exactly high-paying, with most jobs being in catering, shop work, personal care and domestics.

FIGURE 5:

Source: EU Vacancy Monitor Jan 2012

In 2010, the latest data available, on average approximately 4.9 million people aged between 18 and 29 found a job in the EU27. Interestingly, the top four occupations for young people in 2010 were the same as for all age categories. While these jobs have relatively ease of entry and so offer prospects for new entrants (youth) to the labour market, they are not the best jobs. Significantly, 23 of the 25 top jobs for young people were also in the top 25 occupations in terms of job-finders for all age categories.

An important indicator is the job vacancy rate. The chart below (Figure 6) show that there are 7.4 unemployed per job vacancy in the EU27, but in Ireland, there are 31 unemployed. It is not as bad as Portugal, Greece, Spain and Latvia, but this scale of unemployment is at a dangerous level.

FIGURE 6: Vacancy Rate in European Countries 2010


If all the jobs were filled instantly, 30 of the 31 in Ireland would still be unemployed; i.e. there are so few jobs that no amount of training will have a significant effect. This illustrates the depth of the crisis; it would be different if we were close to full employment.

In conclusion, this indicator of growth and employment reinforces the view that it is demand which is required.