Later this morning, the Equality Commission for Northern Ireland will formally publish the results of research it commissioned into the effects of the economic downturn on employment status and prospects.
The research covers 16+ year olds over a period from Q1 2006 (two years before the recession) to Q3 2009 (after which the UK emerged from recession – in Q4 – with a 0.1% gain in GDP).
In many ways, reading the 115 pages of the report confirmed my shallow understanding of the recession. People who’ve never worked – eg, the young – are struggling to get jobs. People who have lost jobs are struggling to regain employment. Vulnerable groups are finding it tough. And blue collar has so far been worse than white collar.
At today’s launch, Chief Executive Evelyn Collins is planning to say:
Fully understanding the impact of the recession on people in Northern Ireland to date is absolutely vital. Decision makers faced with greatly reduced budgets will have tough choices to make. The data in this research can inform their thinking on the impact of the recession and strategies for dealing with it.
The doubling of unemployment rates for young men may have profound implications for the shaping of our future society, especially where there is a risk of damage to future careers and a possibility of long-term unemployment.
In the 15 years before the recession Northern Ireland experience sustained economic growth resulting in increasing employment and declining unemployment.
That has built us up for a fall.
Over the period April 2008 to September 2009 there was a 2.3% point fall in the employment rate; and of all the nations Northern Ireland had the largest fall of 4.2 percentage points compared to 3.1 percentage points in Wales, 2.7 percentage points in Scotland and 2.1 percentage points in England.
Levels of inactivity (eg, students or those deliberately not working) in Northern Ireland have risen slightly during the recession (40.1% in Q1 2006 to 41.5% in Q3 2009). However, “inactivity remains significantly higher in Northern Ireland than other regions of the UK”.
DETI’s May 2010 figures show that levels of confirmed redundancies are slowing. 3,444 in the year to end-April 2010, a decrease of 19% on the 4,269 the year before. 307 confirmed redundancies in April 2010 and 249 in March 2010 are lower than the 545 a year before in April 2009.
Between 2006 and 2009, levels of employment in the NI manufacturing sector have fallen by 12% (10100 fewer jobs) and 17.9% (7480 jobs) in the NI construction industry. In contrast there has been a 2% increase (10920 jobs) in the NI service sector.
Unemployment levels in every country in the EU – except Germany – have risen since the start of 2008. The greatest rises have been in Spain (18.8%) and Ireland (12.5%).
In Germany employment has actually increased during the recession and it is argued that this was helped by a number of agreements between employers, unions and government that promoted temporary working and shutdowns in reaction to falling demand (Oxford Economics, 2010).
Between 2006 and 2009, levels of private and public sector employment have remained stable. This equilibrium is unlikely to continue.
Where’s the geographic impact? Benefits claimant levels (NOMIS, January 2010) are highest in Derry (7.3%), Strabane (7.3%), Limavady (7.1%) and Belfast (6.7%). Within Belfast claimant levels were already highest in the west and north. During the recession, they have grown most quickly in those areas too.
AGE & GENDER
The effects are being felt the most by the young, particularly – though not exclusively – young males.
The unemployment rate for 18-24 year olds has more than doubled from 9.9% in 2006 to 20.4% in 2009. This is “almost three times the overall unemployment rate and four times the rate for older workers; furthermore it is also above the UK average youth unemployment rate of 18.0%”.
The graphs below show the employment, unemployment and inactivity rates by age in NI.
In Northern Ireland, Young people [particularly the 18-24 age group] have experiences the greatest negative employment impacts …
[NI] men have been disproportionately affected, especially those in young age groups.
Unemployment rates for females have increased from 2.2% (Q3 2006) to 2.3% (Q3 2009), while over the same period, male unemployment has increased from 3.8% to 6.4%.
A far higher proportion of young women [in NI have been] affected by unemployment compared to other age groups of women.
There as been a significant decline in female employment rates in the 18-24 age group.
While there is general evidence that “people with disabilities are disadvantaged in the labour market and have employment rates far below that of the non-disabled population … little evidence exists at the NI or GB level … that people with disabilities have been disproportionately affected by the current recession”.
So far “the recession has only had a small impact on lone parents”. However, interviews conducted by the researchers indicated “that there had been a decline in lone parents being able to access employment programmes”. This is coupled with the already low levels of childcare provision in NI compared to GB.
[NI has] only 92.5 day nursery places per 1,000 children aged 0-4 years (based on 2005 mid-year estimates), compared with 195.5 in England in 2006 (ECNI, 2007).
There has been “a decline in employment and a rise in ILO unemployment for both [Protestant and Catholic] communities” though the increase in unemployment for the Catholic community has been slightly greater. There are also age profile differences between the two communities (the Catholic community is younger) which accounts for some – though not all – of the differential.
There is little data on the Black Minority Ethnic population in NI due to its small size. There are reports of many migrant workers in NI “being made redundant or dismissed, mainly due to them being on casual or temporary contracts. However there is little evidence of migrant workers returning home because of the recession, although the number arriving in Northern Ireland has declined.”
The report adds that “should the recession deepen or ‘double dip’ then there may be different response”. Stakeholders identified issues of “lack of awareness of rights and entitlements among migrant workers”.
This was often due to language barriers, lack of union representation, not having proper employment contracts. For example, one organisation reported that they had quite a lot of incidents of pregnant women being dismissed or having their hours reduced, and having difficulty accessing maternity benefits.
SEXUAL ORIENTATION & EX-OFFENDERS
There is little labour market data on employment rates and sexual orientation. Similarly, there is a lack of evidence about ex-offenders, though interviews “indicated that, due to the recession, ex-offenders were finding it increasingly difficult not only to find work, but also to enter employment programmes”.
Single people (who tend to be younger) and those who are separated have been most negatively affected by the recession.
One feature that distinguishes the current downturn from previous economic cycles has been the lower than expected fall in employment rates. This seems to have been due to employers implementing savings through wage cuts, pay freezes and reduced hours rather than cutting jobs.
… greater investment in human capital and skills means that many employers are less willing to let go of skilled staff. This however, would mean that the less skilled are just as vulnerable and may be more likely to be made redundant before more skilled workers, as was the case in previous recessions. Although maintaining employment is a positive outcome for many there are a number of negative consequences, not least a reduction in wages, but also possible loss of flexibility, reduction in training and limited career progression.
With NI public sector job cuts only arriving now, and mortgage and loan rates likely to rise faster than wages, the pain is only starting.
And the problem with unemployment is that it has all kinds of consequences that can spiral.
One of the risks of recession is that the unemployed drift into long term joblessness which can be seen as one of the most persistent impacts of a recession. This occurred in previous recessions and it was this group of long term unemployed that proved very difficult to get back into work. The long term unemployed are far less attractive to employers and their skill and employability levels diminish over time. Long term unemployment also brings with it other social problems including poverty, homelessness, ill heath, crime, drug and alcohol abuse and the impact on the wider household.
Stakeholders reported to the research team that “centres and other employment support services. Stakeholders reported that job centres were now having to deal with clients who were highly skilled, had long work experience and no experience of unemployment” but “had expectations about what kinds of jobs and pay they wanted”.
One of the issues reported as facing the newly unemployed was that many of them will not be able to return to the same type of employment, for the same level of wages, and will instead have to transfer their skills to areas of the labour market which may not command such high wages.
The increase in the number of unemployed was also seen as having an impact on the long term unemployed in terms of increased competition from those who are better qualified and have more recent work experience to offer employers. The impact of this has been to possibly put the long term unemployed at even more of a disadvantage in the labour market.
The longer you’re out of work, the harder it gets to find new employment – no matter what sector or role you previously had.
It’s a bleak picture – particularly if you believe that the worst is yet to come – and even more so if you’re young or vulnerable.
It will be interesting to see the political reaction to the Equality Commission’s research. Will any parties articulate policy proposals to reduce the effect on the young and vulnerable? Or will their social consciences be put on the back burner and instead they’ll engage in finger-pointing and doomsaying?