Michael Noonan
Question:64 Mr. Noonan (Limerick East) asked the Minister for Enterprise and Employment his policy on the use of wage subsidies to encourage employers to recruit persons who are on the live register.
Vol. 442 No. 2
64 Mr. Noonan (Limerick East) asked the Minister for Enterprise and Employment his policy on the use of wage subsidies to encourage employers to recruit persons who are on the live register.
83 Mr. Yates asked the Minister for Enterprise and Employment his policy on the use of wage subsidies to encourage employers to recruit persons who are on the live register.
I propose to take Questions Nos. 64 and 83 together.
Wage subsidies can be a legitimate element in the menu of active labour market measures engaged in by Government with a view to influencing the market — determined level or distribution of employment. Research suggests, however, that it is an instrument which must be used with caution because of the potential deadweight costs that can arise from the fact that the employment may have occurred in any event, and also because of the potential it can have to lead to employment substitution and displacement. Consequently, it is best used as a closely focused and targeted instrument aimed at overcoming particular difficulties or indeed prejudices that some groups such as the long term unemployment may face in accessing the labour market. FÁS currently operates the employment incentive scheme (EIS) which aims to encourage employers recruit additional employees from among long term unemployed persons, early school leavers and other disadvantaged persons. This scheme is operating at capacity level relative to the budgetary provisions for it this year.