80 Years to Deflate Unemployment Crisis in Ireland?

by Constantin Gurdgiev, TrueEconomics.Blogspot.in

Continuing with the Ireland Live Register data theme: in the first post I covered broader long-term trends in the LR, with the second post looking at some sub-trends relating to nationality of Live Register signees. Here: a quick note on the size of the problem overall.

Total number of persons (officially) on the Live Register declined 2.07% y/y in March, following a steeper decline of 2.40% in February. Compared to March 2011, current reading is down 3.65%.

Thus, March 2013 reading was 165.8% ahead of the 2004-2007 average, 36.1% ahead of 2008-2009 average and is 3.38% below 2010-present average. Taking Q1 2013 average, the Live Register (again, this is official count, excluding those on State training programmes) was up 1.76% on Q4 2012, down 2.26% on Q1 2012 and down 3.37% on Q1 2011.

For the adjusted Live Register (accounting for state training programmes participation), Q1 2013 q/q rate of increase in the Live Register was 1.53% and y/y rate of decrease was -1.38%.

Let me remind you the size of the problem overall:

Click to enlarge

At the above annual rates of decline (based on Q1 2013 data), it will take

  • 12.5 years from now to reach 2008-2009 average Live Register levels (which would be consistent with unemployment supports at the levels well above those observed in the 1980s and 1990s) and
  • 40.5 years to reach 2004-2007 average or 37 years to reach 2000-2007 average.

If you want a really scary number, using y/y change in Q1 2013 in Adjusted Live Register numbers, it will take us 81 years from today to reduce Adjusted Live Register counts to 2000-2007 average level. As a robustness check, the number will be 79 years were we to use Q4 2012 annual rate of decline.

Clearly, the ‘turnaround‘ being signaled by the Live Register is simply not enough to deal with the current problem of unemployment and equally clearly, at current rates of economic ‘growth‘ we either need to raise the speed of economic activity expansion by a factor of 10 or carry out some drastic measures on reforming our unemployment supports in order to see significant reductions in Live Register any time soon.
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