Unemployment crisis in perspective

MackQ

Wednesday, 4 February 2009:
"Jobless rate could hit 400,000 by the end of the year" - Cowen
http://www.rte.ie/news/2009/0204/employment.html

May 2009 Unemployment Figures released:
Unemployment now 402,000.
http://www.rte.ie/news/2009/0605/liveregister.html

This government has demonstrated a staggering inability to grasp any sense of reality time and time again. How much longer can these clowns be allowed to lead the nation towards the brink?

partyguinness

and this morning they are saying that a recovery will begin in 2010 which basically means 2015 this does not seem to be based on any sound economic basis save "Oh well it has to stop some time.."...

We are going to be listening to this crap forever...:mad:

nesf

partyguinness wrote: »

and this morning they are saying that a recovery will begin in 2010 which basically means 2015 this does not seem to be based on any sound economic basis save "Oh well it has to stop some time.."...

We are going to be listening to this crap forever...:mad:

Eh, recovery could begin because the export sector in this country (which is relatively large) will recover when the international economy picks up, not when our internal market picks up. House prices could still be falling, the construction sector still in the doldrums yet companies who mainly export goods could be doing quite well for themselves, with the accompanying increase in tax receipts from these areas.

utick

irelands wages will need to fall significantly for it recover its exporting busness

nesf

utick wrote: »

irelands wages will need to fall significantly for it recover its exporting busness

Ish. Some businesses are less wage concious than others, chip manufacture etc.

jmayo

nesf wrote: »

Eh, recovery could begin because the export sector in this country (which is relatively large) will recover when the international economy picks up, not when our internal market picks up. House prices could still be falling, the construction sector still in the doldrums yet companies who mainly export goods could be doing quite well for themselves, with the accompanying increase in tax receipts from these areas.

nesf, as you know well I keep saying that our manufacturing base is not what it used to be 10 years ago.
We lost small indigenous companies and we have lost multinationals all masked by our greate celtic construciton/retail boom.
How many export based companies will survive until the worldwide economy picks up is the real worrying thing.

Companies can't afford to wait, they need to become as competitive as possible right now to survive and the government are doing shag all to facilitate that.

Even if/when exports pick up they will never be able to meet the exchequer spending currently in place.
Unless we create massive amounts of jobs in the manufacturing and service industries we will still have huge amounts of unemployed with it's subsequent drain on our revenues.

nesf wrote: »

Ish. Some businesses are less wage concious than others, chip manufacture etc.

Chip manufacturers are more wage and cost consious than you think.
Besides it is energy costs and other costs such as freight that can have bearing on company profits.
Take a look at Xilinx. Intel have been investing more in China over last few years and not investing as much in Leixlip as in the old days.
Thus long term Intel will probably not be in Ireland.
Also factor in any changes Obama makes to multinational tax repatriation and you might have see some changes with regard to Microsh*te and Intel.

Économiste Monétaire

MackQ wrote: »

Wednesday, 4 February 2009:
"Jobless rate could hit 400,000 by the end of the year" - Cowen
http://www.rte.ie/news/2009/0204/employment.html

May 2009 Unemployment Figures released:
Unemployment now 402,000.
http://www.rte.ie/news/2009/0605/liveregister.html

This government has demonstrated a staggering inability to grasp any sense of reality time and time again. How much longer can these clowns be allowed to lead the nation towards the brink?

Live register figures were released, not unemployment figures. A SUR figure of 11.8% was released, which obviously doesn't come near 400,000 persons.

nesf

jmayo wrote: »

nesf, as you know well I keep saying that our manufacturing base is not what it used to be 10 years ago.
We lost small indigenous companies and we have lost multinationals all masked by our greate celtic construciton/retail boom.
How many export based companies will survive until the worldwide economy picks up is the real worrying thing.

Companies can't afford to wait, they need to become as competitive as possible right now to survive and the government are doing shag all to facilitate that.

Even if/when exports pick up they will never be able to meet the exchequer spending currently in place.
Unless we create massive amounts of jobs in the manufacturing and service industries we will still have huge amounts of unemployed with it's subsequent drain on our revenues.



Chip manufacturers are more wage and cost consious than you think.
Besides it is energy costs and other costs such as freight that can have bearing on company profits.
Take a look at Xilinx. Intel have been investing more in China over last few years and not investing as much in Leixlip as in the old days.
Thus long term Intel will probably not be in Ireland.
Also factor in any changes Obama makes to multinational tax repatriation and you might have see some changes with regard to Microsh*te and Intel.

I don't disagree with much of what you said. I was thinking of small sector recovery here, not economy wide recovery. It's going to be a long, slow and painful process for this country to recover its competitiveness in the broad sense.

tedstriker

Économiste Monétaire wrote: »

Live register figures were released, not unemployment figures. A SUR figure of 11.8% was released, which obviously doesn't come near 400,000 persons.

I think most people regard the live register figures as unemployment but they shouldn't although in real terms it is counting the amount of people that receive money from the government so it is important in this way. If live register figures are high and tax receipts are low then we're in trouble.

The figures are staggering though, to be fair:

Seasonally Adjusted Standarised Unemployment Rates
Irish Live Register Figure

silverharp

just to add to the theme of looking at the US for any hope of a stabilization here. The markets seemed to like the US unemployment numbers initially but on closer analysis the internals look pretty poor

Friday, June 5, 2009
Payroll Data In Perspective

Posted by Tyler Durden at 3:26 PM
We have to put the data into perspective. Before the Lehman collapse, when equities were in a moderate bear market and bonds in a moderate bull market, the worst nonfarm payroll result we saw was -175,000. We don’t seem to recall too many pundits rejoicing over employment declines at that time, which were basically half of what was just posted in May. Moreover, the worst nonfarm payroll number in the 2001 recession — right after 9-11 — was -325,000; and before that, at the depths of the 1990-91 recession, the worst report showed a -306,000 print. So basically, what we saw today was a number consistent with a deep recession — just not quite as deep as the near-6% at an annual rate contraction we saw in the first quarter. It is difficult to rejoice over an employment data that is consistent with real GDP still declining anywhere from a 2% to 4% at an annual rate. Now here we are, close to nine months after the Lehman collapse, and we are still printing employment numbers that are double what they were before pre-Lehman. That is the bigger picture.

Moreover, the internals of today’s report, in a word, were awful. Not only are businesses still cutting jobs but they are also reducing the hours that their employees are working; the private workweek hit a new record low of 33.1 hours (from 33.2 hours in April). So, total labour input was much weaker than the headline payroll suggests and this is vividly illustrated in the aggregate-hours worked index, which fell 0.7% MoM and something ‘green shoot’ advocates will not like discuss since this was actually worse than the 0.3% MoM drop in April; this takes the three-month trend to a -8.6% annual rate. Think about that for a moment because what goes into GDP is total hours worked and productivity — so the latter better continue to hang in there or else we are going to be seeing some nasty output data going forward that may well take Mr. Market by surprise. Put another way, if companies had held hours worked constant in May instead of cutting them, to achieve the total labour input they achieved last month would have required — get this — a 927,000 payroll cut. ‘Green shoot’ indeed.

Économiste Monétaire

tedstriker wrote: »

I think most people regard the live register figures as unemployment but they shouldn't although in real terms it is counting the amount of people that receive money from the government so it is important in this way. If live register figures are high and tax receipts are low then we're in trouble.

The figures are staggering though, to be fair:

Seasonally Adjusted Standarised Unemployment Rates
Irish Live Register Figure

The OP is comparing a statement on unemployment numbers with live register figures, they're not the same thing, which is what I was pointing out. Here's two other posts on the unemployment figures:

http://www.irisheconomy.ie/index.php/2009/06/05/unemployment-rate-up-to-118-in-may/
http://www.irisheconomy.ie/index.php/2009/06/06/perspective-on-the-labour-market/

Taking the last labour force number of 2.2227 million, one infers an unemployment number of around 262,000 persons. The next QNHS release isn't far away.

SkepticOne

One problem with all unemployment measures and estimates (such as the one based on the live register) is that someone who loses most of their job (e.g. from 5 days a week down to 2 days) is technically employed. Unlike the 80's people are more likely now to be put on short time working arrangements. This partial unemployment measure needs to be added to the unemployment figure if comparisons with the 80's are to be made.

Firetrap

It's all well and good to talk about cutting wages to be more competitive (not a bad idea as our wages are too high) but what about all the people who got massive mortgages on houses? They need high wages in order to pay for them.

jimmycrackcorm

Wages are being cut already. I and almost everyone I know has had some level of wage cut over the last 6 months - 10% or more.

irish_bob

Firetrap wrote: »

It's all well and good to talk about cutting wages to be more competitive (not a bad idea as our wages are too high) but what about all the people who got massive mortgages on houses? They need high wages in order to pay for them.

what about those people who have massive mortgages , thats not me ( the tax payer ) or the states problem

Firetrap

No, but for the people who are in that boat (I'm not one of them by the way - I refused to engage in the madness) it's going to be a real problem. How much do wages need to be cut by?

MackQ

irish_bob wrote: »

what about those people who have massive mortgages , thats not me ( the tax payer ) or the states problem

Well, it is to an extent. Those with massive mortgages and falling wages will have less disposable income and will spend less resulting in less VAT receipts. This has to recouped from somewhere e.g. the taxpayer.

Hasschu

Deflation is now under way in Ireland and will last well into 2010. Wages have fallen dramatically (50%) in the competitive part of the economy e.g. independent tradesmen, commission sales, small enterprise owners and a host of others. Wages are very sticky in the non competitive sectors particularly the government bureaucracies and closely related quangos which make up a significant proportion of the work force. The biggest hurdle to overcome is the governments inability to spread the pain evenly and fairly based on sound economic and social policies. As I see it taxpayers bailing our bank bond holders and developers is exacerbating the unemployment problem and could lead to social unrest and far more serious problems for the country. Bite the bullet, put the banks out of their misery using receivership/bankruptcy followed by nationalization with no compensation for shareholders or bond holders in the case where the liabilities exceed the assets. Do not drag on a rescue which the country cannot afford and could lead to bankruptcy for the nation and years of poverty and chaos.

Hasschu

Deflation is now under way in Ireland and will last well into 2010. Wages have fallen dramatically (50%) in the competitive part of the economy e.g. independent tradesmen, commission sales, small enterprise owners and a host of others. Wages are very sticky in the non competitive sectors particularly the government bureaucracies and closely related quangos which make up a significant proportion of the work force. The biggest hurdle to overcome is the governments inability to spread the pain evenly and fairly based on sound economic and social policies. As I see it taxpayers bailing our bank bond holders and developers is exacerbating the unemployment problem and could lead to social unrest and far more serious problems for the country. Bite the bullet, put the banks out of their misery using receivership/bankruptcy followed by nationalization with no compensation for shareholders or bond holders in the case where the liabilities exceed the assets. Do not drag on a rescue which the country cannot afford and could lead to bankruptcy for the nation and years of poverty and chaos.

ceret

jimmycrackcorm wrote: »

Wages are being cut already. I and almost everyone I know has had some level of wage cut over the last 6 months - 10% or more.

Me too. 15% cut in salary.

Hence I've switched jobs. :P