Irish Diseases Return to Economy as Jobs Scarcity Spurs Exodus

Irish Diseases Return to Economy
A protest sign, which reads "High rents are killing our jobs", hangs from a building in Dublin. The jobless rate plunged to as low as 3.7 percent even as emigrants returned home and east Europeans poured into Ireland seeking work before the boom shuddered to a halt in 2008. Photographer: Aidan Crawley/Bloomberg

Unemployment and emigration, the twin diseases that blighted Ireland in the 1980s before its economic boom, are returning to ail the country after the bust.

The jobless rate will probably remain above 14 percent through the next year, according to economists at Allied Irish Banks Plc and Ulster Bank in Dublin. That’s double the level of three years ago. The unemployment rate was 14.2 percent in June and the statistics office will publish July data at 11 a.m. tomorrow. Meanwhile, more people are leaving the country than at any time since 1989.

“Things are desperate,” Joe Cox, 51, who lost his job 11 months ago after running a hardware store before Ireland’s property bubble imploded, said outside a welfare office in Dublin. “Employers don’t even reply a lot of the time.”

While the pain of austerity is kicking in for the growing ranks of unemployed in Europe’s most indebted nations, Ireland has history catching up with it after the collapse of the Celtic Tiger economy and Europe’s worst banking crisis.

Irish modern history has been marked by emigration since the Great Famine, which began in 1845. The population shrank by more than a third to 2.8 million in 100 years through 1961. Unemployment averaged about 14 percent between 1992 and 1996, before an influx of overseas investment sparked a boom.

The jobless rate plunged to as low as 3.7 percent even as emigrants returned home and east Europeans poured into Ireland seeking work before the boom shuddered to a halt in 2008.

‘Painful, Protracted’

Job losses started in the construction industry before rippling through the economy. Ireland now has the third-highest rate in the 17-nation euro region, behind Greece and Spain, and unemployment will average 14.6 percent this year, according to the European Commission forecasts, compared with 10 percent across the euro area.

“It will be a painful and protracted process to reduce unemployment,” said Austin Hughes, chief economist at KBC Bank Ireland in Dublin. “The government’s finances are in such a perilous position there isn’t any significant wherewithal to throw at the problem.”

Rebecca Halliday, 32, lost her job as a legal secretary 18 month ago. An oboist, she’s working part time as a musician after giving up on finding another law job.

“I looked for about two years, and went to more to 50 interviews but there was absolutely nothing there,” said Halliday, speaking on Tara Street, close to the glitzy offices along the old docks where many law firms are now based.

Heading to London

Emigration has also resumed. After drawing almost 400,000 immigrants in the nine years through 2008, some 35,000 people left in the year to April 2010, according to the latest figures published by the statistics office.

Alan Courtney, who graduated from Trinity College with a degree in biochemistry and immunology in 2009, decided to move to London after he couldn’t find a job at home in nine months.

“I have a good degree and a masters,” Courtney, 24, said outside a welfare office in the center of Dublin. “I’m a prospective graduate-course candidate, and I can’t find a job.”

With the budget deficit forecast to be 10.5% of gross domestic product this year, more than three times the European Union limit, the government lacks the resources to fund any large-scale job-creation plan. Still, some companies are adding workers. Ericsson AB, the largest maker of wireless networks, said in June it would add 100 software engineers at a facility in Athlone in the Irish midlands.

Google Search

Two thirds of technology companies in Ireland are seeking to hire people in 2011, according to a July 27 report by Mazars LLP, a U.K. financial and accountancy firm.

Trouble is, many people who lost jobs after the boom don’t have the skills to fill the positions. Eric Schmidt, executive chairman of Google Inc., which employs about 2,200 people in Ireland, met with government ministers to discuss its struggle to find graduates with math and science degrees, the Sunday Business Post reported on July 3.

Welfare Minister Joan Burton, who said last month unemployment is becoming a “lifestyle choice” for some, is cutting benefits for those who refuse jobs or training opportunities.

“We’re still coming off the Celtic Tiger era when there was such a buoyancy of revenue that finding the extra money was not difficult,” Burton said in an interview on July 29. “That situation has changed utterly and we have to adapt.”

Outside the welfare office in downtown Dublin, Cox says he feels betrayed by Burton, a Labour Party minister in Ireland’s five-month-old coalition government.

“She knows nothing about living with a family on 188 euros a week,” Cox said. “Once they get your vote, they turn their back on you.”

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