Ireland: a jobless recovery is no recovery at all

Those espousing austerity measures for the UK might want to look at the bitter experience of those across the Irish Sea.

Jason Walsh

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Ireland’s economy is a mess; everyone knows this. After two decades of rapid but uneven growth, the country’s economy crashed and burned along with the rest of the world following the credit crisis.

The result has been one of the harshest austerity programmes in Europe. Public spending has been slashed, tax has risen, the banks have been bailed-out, and a controversial ‘bad bank’ scheme- the National Asset Management Agency (Nama) – was created to buy delinquent property debts from the country’s financial institutions. All of this has been done in order to prove the county is a ‘good financial citizen’.

Seemingly the plan is working. Accountancy firm Ernst and Young has announced that the citizens of Ireland are about to enjoy a recovery. The snag is, it will be ‘jobless’. Just what is a jobless recovery, you ask? The answer is simple: a decade of pain. You see, Ireland has been here before.

The Irish government’s Central Statistics Office announced that the ‘live register’ of unemployment rose by 6,000 in May bringing the jobless total to 439,100 – 13.7 per cent of the workforce. The rise in unemployment is lamented by the press and public alike as a an unfortunate side-effect of government policy. Alas, it is nothing of the sort. In fact, it is an intentional consequence of a policy designed to restructure the economy.

Unemployment hasn’t been much of a political issue in Ireland for a long time. Until recently, the country had effectively full employment, but even when unemployment was obscenely high during the 1980s it wasn’t quite a political issue in the way we normally understand.

In 1986, we had Self-Aid, a benefit concert for job creation (yes, Bob Geldof was there). Whatever one makes of Live Aid, at least its objective was clear. Just how a telethon and concert can fill in for an employment strategy, on the other hand, is anyone’s guess. Whatever it was supposed to do, it didn’t work. Ireland’s unemployment rate in 1986 was 17 per cent. A year later it was 16.8, a mere 0.2 per cent lower. In fact, unemployment didn’t drop to under 10 per cent until 1998 and it wasn’t until 2001 that it finally dipped below five per cent.

Throughout the 1980s, Ireland was a country marked by grinding poverty and yet only one year during the decade qualified as recessionary. The economy grew, but jobs were not created – and 400,000 Irish citizens emigrated in search of work. A cynic might say that during the 1980s, Ireland saw a ‘jobless boom’.

Here and now in 2010, the 1980s appear to be upon us again. From 2001 until 2007, unemployment was steady at just above four per cent, but 2008 saw the economy collapse. Unemployment rose to 6.1 per cent and then, in 2009, doubled to 12 per cent.

Neither the government nor the opposition have anything even remotely like a jobs strategy, unless you count the opposition party Fine Gael’s desire to create 100,000 jobs in the semi-state sector through off-balance sheet borrowing. In other words, a make-work scheme linked to a bizarre financial instrument that has no relationship to actual economic activity. It’s growth Séamus, but not as we know it.

Instead, we are continually told that the ‘tough measures’ the country took – nationalising a bankrupt bank, part-nationalising three more, and bailing out out a further two, along with huge tax rises along with the imposition of new levies and swingeing cuts in public service provision – were not only necessary, but will inevitably be aped by other countries such as Britain.

Fringe voices from the left and right alike have screamed blue murder, but Ireland’s cosy coalition politics leaves little room for, well, politics. Elite opinion, whether represented by the governing Fianna Fáil and Green parties or the opposition Fine Gael and Labour, is not entirely homogeneous, but it does operate within an indescribably narrow ideological framework. In Ireland, there really is no alternative.

The trade union movement, meanwhile, is morally bankrupt in the eyes of the public, having spent the past 20 years supporting corporatist ‘social partnership’ schemes, and does little more than express the grievances of public-sector employees. Even then, the unions buckled to government pressure, signing-up to the austerity measures under the so-called ‘Croke Park deal’.

Amid all the uncertainty facing the Irish public today, two things are certain: a jobless recovery is no recovery at all and political leadership, from any quarter, is entirely absent.

Jason Walsh is a journalist based in Dublin. He is the editor of forth, an online current affairs magazine.

Previously on spiked

Jason Walsh did not buy into the idea that a sudden spate of strikes in Ireland signalled a return to the 1970s. Earlier, he said that, while Irish people are angry about the recession, there’s little evidence that the land of green is turning red. Tim Black deplored officials using financial threats to get the Irish to vote ‘yes’ in the Lisbon Treaty referendum. Or read more at spiked issue Ireland.

To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.

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