JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht

Unemployment and Youth Unemployment: Discussion

Chairman

This part of the meeting will discuss what we all agree is one of the country's greatest challenges. This committee is acutely conscious of the problems faced by people and in particular by young people who are unemployed. I thank both Deputy John Lyons and Deputy Michael Conaghan for proposing that the committee report on this issue and produce a cross-departmental action plan which will link in with existing departmental proposals and action plans. This committee will also be able to suggest ideas from members and from groups who have made submissions on this subject. We hope to collate all the best ideas in order to focus minds on this issue of unemployment and youth unemployment in particular.

The committee members hope we can play our part in contributing to a solution to this problem and I thank the delegates for their attendance today. I welcome to this first session Mr. Paul Sweeney and Mr. Peter Rigney from the Irish Congress of Trade Unions. Their submissions to the committee have been circulated to members. I invite the delegates to make a presentation and this will be followed by a question and answer session with members.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give this committee. If a witness is directed by the committee to cease giving evidence in relation to a particular matter and the witness continues to so do, the witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and witnesses are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

I hope this does not scare the delegates.

Mr. Paul Sweeney

I thank the Chairman for inviting us to attend this meeting. The members of the committee may not be aware that the Irish Congress of Trade Unions is the largest civil society organisation in Ireland, being bigger than the GAA but not as big as the Catholic Church, but that is why we use the term "civil society organisation". We are the premier organisation in the labour market and we have fairly strong views, as one would expect, on this topic.

I propose to speak about the impact of macroeconomic policies on unemployment. As I noted in my submission, this is an area which is somewhat neglected. One might make the case that the country is in examinership at the moment, that we have not so much kept our creditors at bay but we are getting credit and, similar to a company in trouble, we have a scheme of arrangements. We are trying to get ourselves together and we do not have much room for manoeuvre. Some people have said it is as if we were in receivership. However, it is not like a receivership because our deal with the troika was written by ourselves. The previous Government and the Governor of the Central Bank wrote the deal and this new Government has amended it somewhat in some very welcome ways, I should add, not least of which was minimising the cut in the minimum wage which was cut by a substantial 12%.

With regard to macroeconomic policies, Ireland is a regional economy in Europe and if we want to get the whole edifice moving, we need a European-wide stimulus. I maintain that Europe has the money to do this but the major problem is that of the 27 member states, 23 states are led by conservative or right-wing governments, the premier example being Germany which does not want to do any kind of stimulus. One might say Ireland has no power in this regard but Ireland will assume the European Presidency in 2013 and this country has always had a superb record as a European Presidency. I suggest this issue could be put on the agenda.

It is natural that people are optimistic and take the best picture but I am a realist and we try to be realistic in our advice to congress that the world must be recognised for what it is and not what one wants it to be. The argument is made that we have experienced growth last year but I reply that we have had GDP growth of 0.7% but it has actually crashed since its peak in 2007. The better measure is GNP and most economists in Ireland agree that GNP is what should be examined rather than GDP. GNP has fallen substantially. Levels of employment will not start rising in Ireland until domestic demand picks up. People make the point that our exports are doing well but I will return to that point and illustrate that even booming exports will not translate into the domestic economy and therefore we must do other things to stimulate the domestic economy.

If we believe we are totally constrained then we must do other things to depress it less, which is the pessimistic scenario. The collapse in domestic demand has been a staggering 26%. The Irish Times publishes the new figures as they appear. I can show the committee a graph which illustrates four variables. One variable is exports and this figure is slightly above GDP. Exports have risen quite a bit and this has been the one positive factor from the beginning of 2007. The graph shows that GDP has fallen very substantially from €45 billion in a quarter and this is to be multiplied by four for the annual figure. It has fallen from €45 billion to €41 billion, a substantial fall. The key information is that GNP has fallen a lot and it has fallen in recent times. The worst of all is domestic demand. In the second graph I have taken out the figure for domestic demand to illustrate its fall. Until the domestic economy gets going, we will not really see jobs being created. The Government is correct to argue that there has been a significant number of announcements about foreign direct investment and this is to be welcomed but in my view, this is not sufficient. Those jobs are welcome and they will help. They are generally well-paying jobs. Multinational companies are generally not unionised, in particular in the ICT sector, companies such as Intel and Microsoft, but Apple is an exception. I have visited the Apple plant in Cork several times and SIPTU has very good relations with the company. The trade unions are well represented in the chemicals industry which is the driver of the economy and we know those companies pay well.

I said that exports would not lift us out of recession. One of the reasons for this is the growing gap between GDP and GNP. In most countries, GNP and GDP are roughly the same but because of our dependence on multinationals, we have had - not always, but for a long time - a gap between the two. It has been around 15% to 20%, but the gap is now 27%. What that says to us is that multinationals are adding to our economy - our GDP - but our GNP is still falling, as is domestic demand, so it is not really translating into the key area of the economy where jobs are created.

That gap is quite worrying. One can say it is there because GDP is rising and GNP is falling, but until we look to our own domestic economy we will have a problem in dealing with unemployment - a serious problem for which the old types of initiative will not be sufficient. Many of the initiatives are on the supply side. There seems to be a sort of anti-Keynesian view now. I know that if Keynes were around today he would say his policies would not now work as they have certain flaws, but that does not mean we should not take them into consideration and try to implement them. The way we would do it is to spend money but consider the areas in which we would get the maximum multiplier in terms of jobs. That is what we argue in our various documents, of which the easiest to read is our last pre-budget submission. This document saves one from having to read the previous three, because in it we say the same thing for the fourth time. Unfortunately, we have been correct in saying there will not be economic growth with the level of austerity that currently exists.

Do we think there should be some austerity? Yes, of course; there is a major gap to be plugged. However, the Government, regrettably, is going too far and too fast. We should remember how the Fianna Fáil-Green Party Government was going to cut the budget deficit to 3% of GDP in three years. We thought that was daft and we said it. Then it decided on four years, and we said it was still daft. Then it went for five years, and we still think it is daft - it is too short. If we look at all the economic variables, nothing is working, except that we are, with amendments, heading towards the budget target, and exports are rising. However, there are no green shoots elsewhere. We respectfully suggest it is time for a rethink.

I could go on, but it is best if I stop so we can have a discussion. With regard to austerity measures, there is a conventional view among orthodox economists that it is best to have more cuts in public spending than tax rises. Of course, ideally one would cut taxes, cut public spending only a little bit, and stimulate the economy, but it is hard to do that, so we have to have a mix. The Government has a mix in which it has changed the balance slightly towards taxation. The main tax rise is a 10% rise in VAT - the change from 21% to 22% represents a rise of nearly 10% - which hits domestic demand and pushes it down. The Government has done absolutely the wrong thing. What it should have done was to tax unearned income, which it has done to a certain degree. In fact, the last Government and this one have increased taxes on unearned income from 20% to 30%, which is a substantial rise. Unearned income was part of the reason for the bubble, because people who speculated were rewarded with low taxes. We argue - although I will not go into it now - that there should be higher taxes for those who have the broadest shoulders and can best afford to pay for it.

To end on a pessimistic note, I am not sure there is any more low-hanging fruit to cut. It will be very difficult for the next two budgets. I will hand over to my colleague, Mr. Rigney, who will speak in more detail about youth unemployment in particular.

Mr. Peter Rigney

The committee has my paper, all the references in which are available online, so I will go through it very briefly. We welcome this discussion. If we look back to the 1980s, which is the last time we were in such a bad economic situation, there was a major debate on youth unemployment, but there is no debate now, so the committee is to be welcomed in its initiative.

In the natural run of things, even in the best of times, youth unemployment will always be higher than among the rest of the population, for a variety of reasons. Experience is required for jobs, and young people tend not to have experience. There are also difficulties with entry into the labour market, and a number of other factors. However, there are a few key warning signs in terms of where the Irish youth labour market is at the moment, and we need to take heed of those signs and try to design effective policy approaches. Forfás states that there is evidently a higher than average unemployment rate among the under 25s regardless of their level of qualifications. In fact, if we look at the monthly live register figures, there is good news; the numbers and percentages are going in the right direction. However, this is probably caused by people staying in education or emigrating.

One way of looking at this is in terms of the ratio of male to female students throughout the boom years because, by and large, students are young people. For most of the noughties, for every 100 female students there were 90 male students. That is not a reflection of the demographics of the population as a whole; it reflects the phenomenon of more young men going out into the labour market than young women. At the height of the boom, in 2006, that figure of 90% fell to about 86%, but now it is 100%, because young men are staying in college. In a way that is a good thing, but what has happened to those who made up that gap of 5% to 10% over the previous number of years?

One of the things that does not cause youth unemployment, as far as we can determine, is employment protection legislation. We have one of the most liberal employment protection regimes in the OECD, and the evidence we have is that this does not create youth unemployment. The phenomenon that must be considered is something called scarring. If someone of prime age hits a spell of unemployment he will get up off the floor like a boxer, shake himself down and get back into work. However, a spell of unemployment at the time of a person's entry to the labour market can have a long-running effect on his capacity to earn across his economic life. That is why it is important that we concentrate on this problem.

The ESRI has confirmed that there are a number of key attributes of youth unemployment, including low levels of educational attainment, literacy and numeracy problems and a history of long-term unemployment. The other thing that represents a flashing amber light is that all of these indicators are worse for men than for women. There is the phenomenon of NEETs - people who are not in employment, education or training. These are people who do not show up on the live register or in student figures; they have just become detached. About a year ago we produced a document on skills, which is available online, called New Skills for a New Economy. I said at that stage that the phenomenon of NEETs was not really a problem for Ireland. In the intervening year, however, it has become a problem. Figures from the European Trade Union Institute, obtained from EUROSTAT, show that Ireland has had the largest increase in NEETs among the 27 EU member states. There is a huge pool of disconnected youth who are not in the labour market. The International Labour Organisation, which is the oldest international organisation in this area - it was founded in 1919 - and one to which this Government has been affiliated since the early days of the Free State, stated with regard to youth unemployment:

One has to look all the way back to the Great Depression in the 1930s to find a comparable threat to the goal of continuous economic and social progress. The loss of faith in the paradigm, however, is what makes the current youth employment crisis so significant worldwide.

One thing that jumps out is that the countries that have the fewest problems with youth unemployment are those that have good working apprenticeship systems, including Germany, Austria and the Netherlands. When people in Ireland think of apprentices, they think of electricians, plumbers and bricklayers in a three or four-year apprenticeship.

What I mean by an apprenticeship system is a system where entry into a very wide number of professions requires one to go through periods of work with widely varying periods apprenticeship. Perhaps that is one of the learning points we could take from this. One could argue that maybe Austria, Germany and the Netherlands have not been hit as hard but the presence of strong and widely based apprenticeships is something which should be noted.

Something important is going on currently and it is important that, as legislators, members know about it. An initiative was undertaken by President Barroso and a deputation was sent to the eight worst performing member states in regard to youth unemployment. We met it in February. Originally, President Barroso said he wanted to see results by April but, unfortunately, it is now looking like before the June summit before there are results. It is important we see results on that. There were hints in what President Barroso said that there would be some sort of financial assistance to particular member states to combat youth unemployment. We need to push the Commission on that.

What is to be done? The first thing, if one is designing a policy approach, is that one must measure the effect and measure and evaluate the outcomes. Forfás has identified a problem in that currently there is insufficient data available on cost benefit and quality of certain further education programmes and we need to plug that hole. There are generally three approaches to youth unemployment. There are schemes, employer subsidies and social clauses. Schemes played a prominent role in the 1980s and, in our view, they should be a last rather than a first resort and the nearer they are to the labour market, the better. The first effective employer subsidies were used earlier on in the bust where bursaries were given to employers to take on redundant apprentices and that worked very well. There is the internship scheme to which we gave a cautious welcome. As that scheme reaches maturity, it should be evaluated and we should see the results from it. The problem most classical economists will put to one in regard to employer subsidies is that of dead weight, that is, does one subsidise an employer to take on somebody he or he would have taken on anyway? That is a general problem that is always there. The JobBridge scheme provides the intern with the chance to get work experience and provides the employer with the chance to try somebody out while freeing the employer from the often exorbitant charges of recruitment agencies.

The third method is one of social clauses which is not seen in Ireland. If one mentions social clauses, certain people in the Department of Finance will threaten any sort of dire results up to and including plagues of locusts. If one looks slightly northwards to the programme for government in Northern Ireland on the website of the Office of the First Minister and Deputy First Minister, one will see they have gone through this and found that the EU, in certain circumstances, will encourage the use of public procurement to promote social objectives. It must be done in a particular way and it cannot be used as an aid to industry or as an excuse for keeping out companies from other member states. We think social clauses should be tried out in public procurement and we should say to the successful tenderers that they will have to demonstrate to us a mode whereby they will link up with a particular training centre or college and will take a certain number of people into regular entry level jobs, whether apprenticeships or something else. That has not been tried. It is not toxic or forbidden by the EU and it has been tried in Northern Ireland.

What should we do? We should collect the data and measure and evaluate. We should retain people in education and training and minimise early school leaving. We are doing pretty well on that but the biggest danger is that we become complacent. We need to give priority to NEETS because there are people at all levels of qualification who are unemployed and we must give priority to those in danger of becoming detached. We must focus on the issue of the underperformance of young males. Much work is being done, chiefly by Sean McDonagh, the former president of Dundalk Institute of Technology. Boys do worse than girls, to put it at its most simplest, and that feeds through into the labour market.

We must maintain the quality of our apprenticeship system and extend its scope to a wider range of occupations. If one looks at the OECD website, one will see it did a country report on Ireland last year. One of the things John Martin, who is a fairly senior person in the OECD, said was that we should broaden our apprenticeship system.

Last, but not least, we should look at the issue of public clauses in social contracts. An argument is made about public expenditure and people will say this is a small open economy and that if one spends money, it will leak out of Ireland and that stimulus does not work in Ireland because it is a small open economy. Social clauses is one way to ensure public money being spent on public infrastructure or public procurement serves a social cause. In our view, one of the prime social causes, given the warning signals, is youth unemployment.

Chairman

I thank Mr. Sweeney and Mr. Rigney. That was interesting. We will move to questions. I call Deputy Conaghan and Deputy Ó Riordáin.

Deputy Michael Conaghan

I thank Mr. Paul Sweeney and Mr. Peter Rigney, two very distinguished public figures. They can make a significant contribution to what we are trying to do and put some urgency into the debate about long-term unemployment and youth unemployment, in particular. It is very relevant to this committee that we produce an actionable report which can be monitored and benchmarked against the huge task that needs to be undertaken because long-term unemployment is casting a very long shadow over the country, in particular urban working class communities. It is doing enormous damage to personal, family and community life. We need more urgency in tackling it and in that regard, I am delighted the Chairman has agreed to this initiative.

I would like to ask Mr. Rigney about apprenticeships. Apprenticeships were very highly regarded 20 to 40 years ago. How can we gear up, in comparative terms, to other European countries? They seem to have been able to sustain the significance and esteem of apprenticeships whereas the esteem of apprenticeships in this country has gone below the radar. How can we gear up so that apprenticeships can play the kind of role they seem to be playing in other economies? What are the obstacles and how can we remove them? How can we get a stronger public debate going about expanding, deepening and broadening the whole apprenticeship area?

I refer to the best use of EU funding in terms of President Barroso's ideas. How does Mr. Rigney envisage it being most credibly used? Would it be on education and apprenticeships? Are there obvious best ways to expend that to make an impact?

Deputy Aodhán Ó Ríordáin

I thank the gentlemen for attending the committee. I would like to make points on macroeconomic policies and on youth unemployment. However, I will start with a criticism because I note the document talks about the partnership years and how the Irish Congress of Trade Unions and member unions were strongly critical of deregulation and so on. It states that voices were heard but seldom heeded and it was provided with opportunities to express its contrary views on privatisation. I have a criticism of unions which now say they were not heard or listened to during the partnership process. I wonder why they stuck around because during that time when inequality was deepening and there were 150,000 people on the live register, 50,000 of whom were long-term unemployed, there were opportunities to offer an opposing viewpoint but that was not done. It is difficult when we have gone through the process and have had an economic crash to listen to union leaders criticise Government policy when those union leaders were sitting at the partnership table eyeballing and swapping croissants with Bertie Ahern and various Ministers during the boom time.

Having said that, I would like to ask specific questions on the macroeconomic situation. I was at a meeting on Monday morning with some employers. It was a jobs roadshow and the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, were in Clontarf Castle to talk about the jobs action plan. One of the points raised was the need to focus on import substitution. Rather than talk about exports so much, we need to talk about import substitution, as in the production line and the manufacturing line, and about substituting in the domestic economy that which is being imported. Are there any comments on that issue?

On the issue of broadening the tax base, I ask the witnesses to discuss their reference to a higher tax regime. Given that many employers say they are subventing local government in terms of commercial rates, water charges and so on, is Congress in favour of a property charge to take the pressure off the commercial sector? My view is that a fair and progressive property charge is a wealth tax and is the most effective way of implementing such a tax.

The issues of youth unemployment and young men have not received enough focus. It should be noted that young men are not succeeding as well as they should. It is not a young man versus a young woman situation but it is an issue.

What are the views of the witnesses in respect of the national literacy strategy, implemented by Government, and the new SOLAS proposals, the further education proposals and VEC proposals and their likely effects?

Chairman

We will take a reply to those questions.

Mr. Paul Sweeney

I will deal with Deputy Ó Ríordáin's question on why we got stuck around social partnership. Members will have seen trade unionists going in and out of Government Buildings constantly being interviewed and it appeared as if we were running the country. The Deputy mentioned that Ministers Rabbitte and Bruton met business leaders the other day. Business leaders get to see governments all the time; that is clear from the Ministers' books. One of the issues about social partnership is that workers representatives got to see government Ministers as a right. As Members may know, we have entered into a process of social dialogue with the Government. It is informal but it means we have access to the Ministers which is useful to them because we can tell them of trouble coming down the line, be it an issue on the labour market front or an industrial dispute.

In 1998 I worked in the research department of SIPTU making a budget submission and put in a quantity for the tax allowance; this was before tax credits. I recall my colleague, Mr. Manus O'Riordan, said not to put a figure on it because, he said, last year Mr. McCreevy gave us twice what we sought. We were troubled by the amount of tax breaks and have since written saying he was reducing income taxes too low. The average worker on the average industrial wage used to pay 25% of their income. Four years later, in 2011, they paid only an effective rate of 11% on total income. We thought this was crazy. The economy was booming on the property side and the taxes and stamp duty were not being increased. As the money was rolling in, the Government decided to be popular. Those of us who were economists said this was bad.

We have made a submission to the banking commission outlining exactly what we said since the mid-1990s. It is clear we were cautious on tax policies. Why did we stay in? On balance, our leadership considered that it was better to be in, rather than out. It was us who walked out of social partnership, not the Government or the employers.

SIPTU has a programme on the question of import substitution. Some time ago SIPTU said we are always bashing employers with whom we get on well and perhaps we should stop. I worked for SIPTU for so long that I am inclined to use the word "we". One of its initiatives where it has people in unionised employment is that it promotes the good employer guide and buying Irish. I do not know if Members are familiar with the scheme but it appears to be a good one. EU rules are against one being too active in this area. Like many people, I try to buy Irish when I can. We all need to be reminded of this and there is no doubt it helps the economy.

In regard to employers' rates and the property tax, I will be straight with Members. I am an economist. Nearly all economists agree that a property tax is a good one for all kinds of reasons. It is hard to evade and is stable. I have always favoured a property tax. It took us a long time to persuade Congress to go along with the property tax but happily we are in favour of such a tax and have made a submission to the commission, chaired by Mr. Don Thornhill. We are not very prescriptive because we are slightly divided on it; we are not unanimous. It is unfortunate that the timing for a property tax is now and not during the boom when some of those generous income tax cuts could have been traded for it. Had that been done we would not have had the crash because if one knew one would have to pay €10,000 per year property tax on one's mansion, one would not have bought it and people would not have built those horrendous houses wrecking the country. I think I was the first person to pay the current property tax, having tried ten times to get past the awkward software system. It will be difficult for the Government. As a socialist it is amazing to see Left wing tea parties operating in Ireland, people who say they are on the Left and are anti property tax. It is extraordinary. When I speak about it abroad, people do not believe it. That is how far left those people are; they are actually on the right.

Mr. Peter Rigney

We were asked for our views on the apprenticeships, SOLAS and the literacy strategy. We were invited here as congress, which is a broad umbrella body. In respect of restructuring in the State sector there are unions who will have their own views and sometimes when two organisations merge their views will conflict; therefore, we have no views on that matter. As stated in our document, our view is that training and education, particularly vocational education and training, should be close to the labour market and involve employers because they give jobs. If the apprenticeship system was to be expanded, one should approach employer bodies to see what works for them and the unions in the sector. It is important to bear in mind that the European Social Fund is being renegotiated. Rain forests are regularly being cut down at EU level to show the latest proposals. In terms of the proposals from the OCED to restructure our further education and training system, there may well be the facility to draw down EU funding to pilot and develop new programmes which can be expensive. One cannot walk into a classroom in a training centre and announce a new curriculum. The development of such a programme is extremely labour and time intensive.

We would support the national literacy strategy and, I presume, the proof of the pudding will be in the eating in terms of the PISA statistics in the next few years and the school retention figures as they evolve. Deputy Ó Ríordáin asked for our views on SOLAS and the restructuring of the sector. We have had no engagement on the matter but our thoughts on the issue are set out in the document, A New Skills Policy for a New Economy. Everyone says the dual system in Germany is wonderful. Germany is a big country and has a tradition going back to the time of Chancellor Bismarck. Smaller countries, such as Denmark, Norway and the Netherlands, have highly developed apprenticeship systems to their own models but with close links to the labour market. These are the values that need to be maintained in this process.

Chairman

I call Deputy Lyons and then Deputy Anthony Lawlor.

Deputy John Lyons

I thank the delegates for their presentation to the joint committee. In their presentations, they repeatedly referred to a sense of urgency. I have now been in the Oireachtas for over a year, and as a member of one of the parties in Government, I see how that sense of urgency does not work in the same way. That is one of the frustrations of being in Government. Every single day the number of young people who are unemployed or those who suffered the wage scar is growing. I agree with the points made by the witnesses on the social clause and the way the apprenticeship system operates in Germany. I researched how Germany operates active labour measures and its relationship to apprenticeships. While it is excellent, Germany also falls down in dealing with the disaffected group of young people. The research shows that the disaffected young people in Germany are in the group which is at highest risk of unemployment. In my area of Ballymun and Finglas, I am all too familiar with the number of people in the age cohort 18 to 21 who are completely disaffected. I am aware that the proposed roll out of the one-stop-shop to assess people's skills and engage and direct them is too slow to meet the urgency of their situation.

We have come together as a committee and invited people with the experience and knowledge to advise us so that the recommendations in our report to Government will be acted upon. There is a real sense of urgency about the necessity to address the problem. Do the delegates have an opinion on the possibility of establishing a specific task force, with State, private and community sectors involvement to address the urgency of the issue within a limited timeframe? In my opinion, the one-stop-shops will not be established in every single local employment agency and the education and training board, SOLAS, which is just getting up off their feet will not be able to address all the needs of people in this year. As the legislation has not been tabled, young people face yet another year when their needs will not be addressed at local level.

I am concerned about the snowball effect, and the impact of waiting for the wheels of power to come into play which, in fairness, is how Government works and that takes time. I personally believe there is a need for a task force with a specific criteria and time line to achieve a number of actionable targets.

Deputy Anthony Lawlor

I thank the delegation from ICTU for appearing before us, especially Mr. Peter Rigney whom I met earlier when we put together a paper, which I very much appreciated.

I am fascinated by economists. One could have a roomful of economists but still not come to a conclusion, whether a right or left wing view, because of their ability to see the argument on the one hand or on the other hand. I concur withDeputy Ó Ríordáin that the unions should have called "Stop" during the boom and pulled out then, rather than when the crisis arose in 2007.

Is there a benefit when young people engage with education? There is some Danish research on the monetary value of the loss to the economy of a person who has not done a post leaving certificate education course as compared to somebody who has done it. I have the name of a contact person, which may be helpful and avoids the repetition of the same research.

Europe is experiencing a serious skills shortage. We focus on apprenticeships in certain narrow fields but we need to broaden it to encompass the skills shortages, which are clearly in the IT sector. We have companies linking in and we need to get young people involved in apprenticeships in the IT sector. We are recruiting people from overseas to fill vacancies in companies in Ireland. Other countries, such as Germany, Denmark experience the same problems in various sectors.

Does Mr. Sweeney perceive that this is a right wing or a liberal socialist Government?

Chairman

Who would like to respond first?

Mr. Paul Sweeney

Deputy Lyons asked our opinion on setting up a taskforce. This raises the issue of social partnership. We had a high level group on labour markets, of which I was a member, as well as representatives from employers and Government, and it was pretty useless. The real problem with that group, chaired by a senior official from the then Department with responsibility for Enterprise and Trade, was that it hardly ever met. We kept writing and now that I am reminded of this, I wonder why we did not pull out, but I will return to this point, when I address the questions raised by Deputy Lawlor. It was very frustrating for us. The group comprised some very good people from the various employers' groups, but we did not meet. We had been more effective when we met and worked on earlier agreements. We kept warning about the bubble, but as we had no real unemployment issue, the then Government was not too exercised about it.

It is a very good idea to have such a taskforce. It might come as a surprise, having said what I said but it needs an effective chairman, and members know who is best. In our opinion - we have said this publicly - the Government has been too focused on the fiscal crisis and not enough on the jobs crisis. On the question of whether we should have pulled out, I am a person who believes that if you are in, you stay in and if there are disagreements they are aired in the appropriate place. It is best not to pull out, because when one pulls out, one is out in the cold. In this economy, the employers own the companies, and make the decisions on whether they will invest or not, raise capital, the level of their own pay and what they will pay others. They have most of the power, and trade unions do not have such power. When we get a chance to get in and talk to governments we take it. We never fell out with the employers and as soon as we walked out of the social partnership, we quickly, within a month or so, had done a deal with IBEC. We have continuous negotiation with the employer body. In a modern European country, there is a very good case for social partnership and the most successful economies are those that have social partnership, which is the term used in Europe but here we now call it social dialogue. There is a future for it. I accept the Deputy's criticism. I also know that Senators or Deputies, especially backbenchers, felt precluded and felt sometimes that we had more power than them. We did not feel that way but I understand the criticism and there is a lot of validity in it.

Mr. Peter Rigney

Mr. Peter Rigney

We think they could pick up on existing practices. The easiest one to improve, because we are on the same island and share the same language, is the practice in Northern Ireland.

First, we have intensive ICT and pharmachem industries that will gobble up a large amount of engineers and scientists who take at least four years, and possibly more, to produce. The more successful we are in those sectors the more we will have a skills shortage.

Second, a lot of the industries are multinational and so will require foreign language speakers. The level of fluency needed to run a help-desk for Holland or Scandinavia, and they are the difficult languages, is not impartible by a university education to an Irish person. The companies must bring in people.

Third, the Restaurants Association of Ireland commented on the matter. By all means it should be asked for what it can bring to the party. If it talks about apprenticeships under the new arrangement I would see it inequitable if, for example, an employer of an apprentice chef was more favourably treated financially than the employer of an apprentice electrician. I would agree if it is a genuine attempt to develop apprenticeships and give people skills in areas that are needed. I would decline if it is a disguised request for a subsidy from an industry that has already received a VAT cut and, anecdotally, it took a long time for menus to change in some cases. The association should be invited to air its views.

I am mindful of what the Chairman said about privilege. I dealt with some of the most headline making restaurateurs in Ireland on behalf of some of their employees and tried to get a basic week's wage from them. Everyone goes to work on the basis that the cheque will arrive in their bank account at the end of the week or month and I had dreadful problems dealing with those restaurateurs. The association needs to examine the industry's reputation problem. If it has concrete ideas then it should be invited to the party but their suggestions should be based on a new type of apprenticeship and not an additional subsidy for the industry.

Senator Michael Mullins

Mr. Rigney mentioned a recent discussion with José Manuel Barroso, President of the European Commission, on making financial assistance available to countries to tackle youth unemployment and previous speakers referred to the skills shortage, particularly in the IT sector. If we get additional funding we need to invest it quickly in upskilling and reskilling people. We have a lot of well educated people across a range of sectors that are now unemployed. In the past they would never have been unemployed. We should create a structure to re-equip them for a different role in life.

A lot of technical people, apprentices from the construction industry and engineers are now unemployed. How do we get them to create a job for themselves and perhaps employ a few people?

We talked about import substitution and there are great opportunities in that area. The availability of funding to people with good ideas is another factor. There is a need for an umbrella organisation to pull people together and to concentrate on job creation while harnessing a great range of existing skills, particularly technical ones, and get them thinking about manufacturing. We will never get ourselves out of this mess until we manufacture and export more. Import substitution makes a lot of sense and opportunities do exist. There are a lot of committees and talking shops but what practical steps can we take to get firms up and running quickly?

Senator Marie-Louise O’Donnell

I welcome the delegation and thank them for their informative contribution. Forgive me if what I say is a bit "Noddyish" because I do not come from a background of economics although I worked in Ballymun and Finglas for 23 years and have some idea of unemployment, youth unemployment, disaffection and dispossession.

I would like to take Senator Mullins up on what he said. Recently I was in Taiwan and one evening I attended a meeting with Theodore Chang, a chairman of an enormous corporation and we talked about Ireland. He said that the problem with Ireland is that we spend too much time in the financial centre installing blinds, painting it and making it enormous and not enough time on manufacturing. We have upskilled to the point of no return and have nowhere to go, apart from pharmaceuticals and the computing sectors. He made a further interesting but stark point that we had left mould making and manufacturing behind.

The delegation's apprenticeship idea is excellent. Let us examine the education systems in South Korea or Finland, who we will meet today. Their apprentice system in education is significant, including within the third level education system. It is one of the reasons those two countries are so successful in education.

I note there are no such apprenticeships here, not even in medicine. One of the reasons many young doctors are moving to other countries is that they cannot get apprenticed to consultants or cannot get on a line of apprenticeship. I take the delegates' point, therefore, which is a very interesting one. One thinks of apprenticeships applying only in technical or working areas but they also exist in high-functioning areas. When people cannot get apprenticed in some areas of expertise or cannot have some line of inquiry in a certain route, they will run away.

Where can I access the delegates' submission to the banking sector?

Chairman

From the banking commission.

Senator Marie-Louise O’Donnell

That is all.

Mr. Paul Sweeney

I will send it to the Senator. The submission to the Commission on Banking is also on our website and it is interesting. I should not say, "Talk about economists", but there was a bit we did not publish. We said what we had said over the years but there was a big section we did not publish on what the bank economists who dominated RTE, The Irish Times and the Irish Independent had said-----

Senator Marie-Louise O’Donnell

They are running the country. It is outrageous.

Mr. Paul Sweeney

-----about getting on the property ladder, etc. Some of them are still with us, telling us what to do now but there is a little more caution.

On Mr. Chang's comment about the IFSC versus manufacturing, my personal view is that we must emphasise manufacturing. However, when one looks at the figures, Ireland has quite a large manufacturing base compared to most other European countries, being second behind Germany. The problem is the Germans own theirs but we do not own all of ours although we have some very good Irish multinationals.

If I want to be really unpopular I will say something else about the emphasis on the IFSC, namely, that we have urged caution about silver bullets such as the low corporation taxes which have served us very well. However, it is dangerous to say that is the cornerstone of a country's industrial policy when we do not control that policy instrument. We have warned on this for years. We need to build on our real strengths such as upskilling the workforce and getting our children to learn foreign languages and so on. I am optimistic enough about manufacturing although sometimes when one listens to certain people one might think all our problems would be solved if we could get a few dodgy old companies to invest. There are some really dodgy operations in the IFSC though perhaps I should not say that and should be cautious. There are brass plate operators in the IFSC and they will not do us any good. There are some very fine companies there too and I must emphasise that.

Again, to be slightly controversial-----

Chairman

I must suspend the meeting in two minutes because of a vote. There is no point in the delegates waiting here.

Mr. Paul Sweeney

I will hand over to Mr. Rigby.

Senator Marie-Louise O’Donnell

Mr. Sweeney should not let his controversial comment drop.

Mr. Paul Sweeney

It refers to young people setting up their own businesses. There is a very well-intentioned argument here but when one is setting up one's own business one needs people of some maturity and expertise. Often a person who is a technically good engineer does not have a clue about how to do accounts. It is better to have more mature people or, even better, to have monitors.

Chairman

Mr. Sweeney is fine now but when the bell sounds we must adjourn the meeting.

Mr. Peter Rigby

Briefly, in regard to upskilling, there is a body called Skillnets, the enterprise training programme in which unions and employers are involved, which funds training for upskilling. One of the things done in the latest round of talks is that the training provider has to put up 50% of the money in cash and the Government will put up the remainder, through Skillnets. According to this round, a certain percentage of places on each course must be for people who are on jobseeker's benefit or jobseeker's allowance and that runs right across the sector. One of the interesting things to have evolved was in regard to aviation leasing, in which area Ireland is one of the exemplar countries. Some of the companies took in unemployed architects and lawyers, people who were shipwrecked by the property boom. They found that although these people would never have thought of going into aviation leasing some of their skill sets were applicable. That is very practical.

Yes, there are a huge number of technical people who have been unemployed, many of whom would have come from a construction background. One of the problems, which is seen as the safety valve, is emigration to the southern hemisphere, in particular to Australia. As I gather from unions which help their members to migrate to Australia, one of the showstoppers on an Australian visa is having more than 13 months of unemployment, or, basically, being long-term unemployed. That is my understanding but members should not take it as 100% certain because it is semi-anecdotal.

Chairman

I must suspend the meeting. The delegates are welcome to stay but there is no point in keeping them here for half an hour. This has been a very useful and informative session. We might engage further with the delegates on this topic which will be debated throughout the coming months. I have some questions that I will send on in writing. If there are other answers the delegate wish to give they might correspond with us. I realise I am cutting them short. There may also be other questions.

On behalf of the committee I thank the visitors for attending. We are taking this issue seriously, we take on board what was said and we appreciate the contribution. The committee will now suspend until after the vote.

Sitting suspended at 11.15 a.m. and resumed at 11.35 a.m.

Chairman

We are joined by witnesses from Social Justice Ireland and NUI Maynooth. I welcome Dr. Seán Healy, Sr. Bridget Reynolds and Ms Michelle Murphy from Social Justice Ireland. I also welcome Dr. Mary Murphy from the sociology department in the NUI Maynooth. We see her quite a bit on "Tonight with Vincent Browne". Dr. Seán Healy and his team appeared before the committee previously. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence you are to give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise nor make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. I hope that does not scare off the witnesses.

Dr. Seán Healy

Social Justice Ireland is very happy to be invited to make a presentation on this important issue, which is close to our hearts. Social Justice Ireland is focused principally on building a just society with individuals and organisations where human rights are respected, human dignity is protected, human development is facilitated and the environment respected and protected. Part of a just society requires that issues around unemployment are addressed, particularly long-term unemployment and youth unemployment. We have prepared a briefing, which has been circulated. Members will be glad to know that I will not read through it but I will pick out a few key points. We will be glad to address any questions that arise.

This is a difficult reality and the committee does not need to be briefed on it. We have record highs for the number of people unemployed and, more significantly, the number of people who are long-term unemployed. It is unlikely to reduce any time soon.

We argue that the Government needs to address a number of issues. Youth unemployment will not be addressed solely by supply-side measures. It is important processes and programmes are put in place for people who require training or development of skills and education to be improved but those developments alone will not produce employment for the vast majority of people who are unemployed. A major investment programme, focussed on creating employment, is necessary and it should prioritise initiatives that strengthen social infrastructure such as school buildings or social housing for the 100,000 households on waiting lists. We and others have come up with proposals for how such a programme could be funded, even within the context of the difficulties of the Exchequer and the reality of the coming years. We are happy to develop that point further if committee members are interested in it. It is also important to resource the up-skilling of those who are unemployed and at risk of becoming long-term unemployed through integrating training and labour market programmes. It is also critically important to maintain a sufficient number of active labour market programme places for those who are unemployed. We should also adopt policies to address the worrying trend of youth unemployment. These should include education and literacy initiatives as well as retraining schemes. There is a serious literacy issue and it will be difficult for sophisticated training programmes and up-skilling to produce results for a group of people with literacy issues. There is at last a recognition across the policy system that we have a problem in terms of literacy both among adults, including young adults, and young people coming out of the education process. Therefore, that issue must be given some priority. It is important to recognise also that many of those who are unemployed are skilled professionals. They are people with qualifications and skills who require appropriate support other than training. Part of our concern would be that this is not sufficiently recognised.

There must be a recognition also of the scale of the evolving long-term unemployment issue. All of the literature and our previous experience going back to times when we had high levels of unemployment point to the same problem, namely, that long-term unemployment persists for quite a period of time after economic recovery sets in. No one is claiming that we will have a big economic recovery any time soon and therefore the problem is that once a recovery comes, as it will at some stage, we are still looking at very high levels of long-term unemployment without some kind of intervention aimed specifically at reducing that. We would be promoting a proposal we piloted in the mid-1990s, which was mainstreamed by Government at that time, on a part-time job opportunities programme providing real part-time jobs for long-term unemployed people both in the community and voluntary sector and in the State sector from Government down to the local library. There is an outline of that in the briefing document but we can develop that if the members are interested in hearing more about it.

A point we see as important is developing employment friendly income tax policies which ensure that unemployment traps do not exist. The reality is that approximately 120,000 people currently at risk of poverty have a job. That is a development that must be addressed and recognised within the policy process because what can happen inadvertently is that initiatives are taken that will drive those people further into poverty and eventually out of jobs. That is not in anybody's interests.

We have spelt out in the briefing document the numbers who are long-term unemployed, the long-term trends and the massive changes that have taken place. An aspect we would like to highlight is that the vast majority of people want to take up jobs. There is a narrative that we would take serious issue with which is that many people are unemployed by choice but the record does not show that to be the case. When jobs were available in Ireland up to 2007, our unemployment rate was approximately 4% but our long-term unemployment rate, which is the real issue because it goes beyond the churn that is taking place where people are losing jobs and just coming into the labour market, was at 1.2%. It is now at approximately 8%, depending on the month. Long-term unemployment went from 29,000 to 183,000 but it is not the case that 150,000 people suddenly decided they would skive off, live on the dole and make a lifestyle choice to do nothing. It is obvious that the vast majority of people who are unemployed would take up any half decent job that was available. It is better to recognise that that is the reality and, consequently, to put proposals in place to deal with that.

The youth unemployment rate here at approximately 30% is a very serious issue. As many of those people may never have had a paid job a serious issue arises in that regard. That is one of the reasons we must highlight that particular group of people and the initiatives required to deal with it.

We are strongly of the view that there are two key issues on the jobs side and then a training and up-skilling issue, down to literacy, on the other side. While the Government has been focused on creating positions, training and skills, the Pathways to Work programme and areas of that nature, we would have a concern that the scale of the initiatives on the jobs side are nowhere near what is required. We must recognise that markets alone will not create anywhere close to the numbers of jobs required without some kind of supporting investment programme from the public side. The Government should have two programmes on the employment side, one creating jobs with a public sector programme of investment in social infrastructure, and we can talk about how that can be funded because we have ideas about that, and on the other side a part-time job opportunities programme for people who are long-term unemployed that will give them real jobs which pay the hourly going rate but at very little additional cost to the State while creating a work situation that keeps their skills ticking over and allows them to remain job ready. Obviously, training and skills and a variety of issues need to be taken into consideration in that reality.

The other issue that is clear is that many people, including young people, who have very high educational qualifications are unemployed. That must be taken into consideration in terms of the programmes that are put in place. We must think in terms of how that might be harnessed. That is part of what our part-time jobs proposal is about. It can go in at any level of skill in the labour force and pick up people in that context. I will conclude on that, and we are happy to answer any questions people may wish to put.

Chairman

We will take Dr. Mary Murphy's presentation following which we have questions and answers. We must meet a delegation from Finland at 12.30 p.m. and therefore must end this meeting at 12.25 p.m. but we will have time for questions and answers. This is a project we have taken on at the request of both Deputy John Lyons and Deputy Michael Conaghan. We will probably spend a few months toing and froing on this issue and might revert to the witnesses again for more information on particular areas. That is by way of informing them of the committee's plans. We hope to have a report ready by July at the latest. I thank the witnesses for coming before the committee today.

Dr. Mary Murphy

It is good to know the committee is taking this issue seriously and will spend a number of months dealing with it in an urgent manner. I want to emphasise that sense of urgency and the danger of human set aside. We are facing, particularly with youth unemployment, the possibility of setting aside a generation of people.

With everything else that is going on, not enough public attention has been put on the individual and the social cost of unemployment. We have heard about the economic cost of it but when we examine the academic literature on the social impact of unemployment, both at a community and a family level, and the psychological imprint it leaves - people are seven times more likely to experience mental ill-health, for example - and the delayed life opportunities that result we are not just talking about people not having a job but about not having a marriage, housing, children or the chance to continue in relationships. It has a variety of impacts on one's life that are much wider than simply an economic impact. We have heard about the wage scar and that it translates through into one's 30s, 40s and 50s. One will always be about 20% behind what someone in the average cohort would earn. There are also wider social impacts in terms of the social cost borne by the wider society. There is a great deal of research coming through now including that from Liam Delaney in UCD. The Youth Council has done qualitative research that shows us the brutal reality of what it is like to be unemployed that we do not hear about from newspapers and so on. We must bring that urgency to the debate and begin to examine the human cost.

I outline in the paper three activation frameworks that are available to Government when considering the question of unemployment. The first, Active Inclusion for All, is pushed primarily by the European Union. It takes a broad view of the social and economic needs of unemployed people. Another one is driven more broadly by OECD agendas and places a great deal of emphasis on the obligation of the unemployed to take up opportunities. Another is called Flexicurity which argues for a flexible but secure environment in which people move from welfare into work.

All three models emphasise putting in place a framework to tackle unemployment. However, their stress on who needs to carry the burden of the shift that needs to happen varies significantly. The Irish activation framework, Pathways to Work, draws heavily on the OECD mutual obligations framework which lays heavy emphasis on moderate income on social welfare and sanctions for those who do not move into employment. Success is judged by getting people off the live register rather than looking at the impact on people's lives of going back to work. At present, as Dr. Healy instanced, we are not too concerned about whether people move into low paid jobs that do not move them out of poverty. We are using the wrong framework. We are being led too much towards an activation policy focused on taking people off the live register without looking at the wider implications of a longer-term approach to what we mean by "activation". A more challenging way of looking at it is to consider what people need to do at their stage of life. We spoke about young male unemployment and 25% functional illiteracy. It would be better to place more emphasis on education and address the educational disadvantage faced by many young people. Many of them left school far too early during the construction boom and did not receive their full qualifications at second level. They are facing a lifetime of educational disadvantage unless they overcome it. We can use this as an opportunity to push an education first youth guarantee for people. I will return to this concept.

Given that we follow a mutual obligations OECD-led understanding of activation we are pushing a narrative that blames the unemployed for unemployment. This is very dangerous. The emphasis there has been on lifestyle choice reminds us of an approach that tries to pick out a deserving and undeserving group of people in society and punish one group in the political discourse for something not of their making. This is dangerous because if we blame unemployed people for a lifestyle that was none of their making it stereotypes them as a cohort which employers believe is unemployable and stigmatises them. This does not need to take place. We need a far more hopeful context for speaking to unemployed people about what needs to happen. The recent political discourse on unemployment has not been helpful. I have spoken about the mental ill-health caused by unemployment. This type of political discourse reinforces it very much and it is very ugly to be on the receiving end of it. The qualitative focus groups hear unemployed people saying this and explaining what it feels like to be spoken about in such a way.

I wish to mention people with disabilities and lone parents. The committee brokered a report on the single working age programme which I welcomed as it was very useful. I echo and support its findings. Movement should not begin towards the working age payment until the structures and supports are in place for people with disabilities and lone parents. I call for vigilance in this area because changes have already been made which affect people with disabilities and lone parents. CityWide has conducted basic research which shows the changes that have already occurred in recent months have meant a huge drop-off of people with disabilities and lone parents on the waiting list to get onto programmes in the special support community employment framework. It has been referred to as the slow death of the programme with waiting lists evaporating overnight once the wider community heard about the changes. While the report is very good, changes are niggling through anyway. If people believe what the report says these changes need to be overturned before they develop any further.

Dr. Healy mentioned that youth unemployment is almost at 30%. He drew attention to research conducted by Forfás in 2010 and the Nevin Economic Research Institute, NERI, last week. It provides a very useful breakdown of the various levels of education and disadvantage of unemployed people aged under 25. Attention is drawn to the fact that approximately 74,000 people are involved with particular attention drawn to those not in education or training as mentioned by Mr. Rigney earlier. NERI draws attention to the fact that 10% of 18 to 24 year olds are not employed or in education or training. They are highly vulnerable to the scrap heap I spoke about earlier. We are losing them as we speak. They will end up in prison and socially dysfunctional and we will pay the price of this at personal and community level for a long time. We know this as we are still paying a very high price for what happened in the 1980s.

I have outlined the data and we know who these people are, their educational levels and their needs. We do not need a massive period of research; we need action for these groups. A youth opportunities guarantee would give hope and change the political discourse on unemployment. Other countries are doing this and it is well-established policy in Finland and Austria. A delegation from Finland will come before the committee later and it might be good to engage with them on it. Britain and the Netherlands have been examining it and the Spanish government recently announced it wants to examine it. A youth guarantee is guaranteeing to young people under the age of 25 an education, training or work initiative. They need various types of initiatives to match their needs.

I stress the idea of an education guarantee to those who have not yet completed second level education. It would require significant activation of the State infrastructure. Our education system does not fit the needs of these young males. It would require very creative and innovative programmes, such as were evident in Irish policies and pilots through Integra and Horizon in the 1990s and 2000s. We know how to do it but we have never really invested in mainstreaming the lessons we learned. If we were imaginative and ambitious we could make a political commitment to guarantee every young person under the age of 25 whatever they need to reconnect with society. I say society rather than the labour market because some of them are so far away from engaging with a job they need a pre-labour market education initiative. This would require massive State resources but they deserve no less. It is the State that needs to be activated rather than unemployed people.

The submission addresses the idea of a youth guarantee. It examines the argument that a youth jobs fund could be administered through special funding from the European Social Fund. Mr. Rigney referred to this. New European initiatives appear to provide up to €3 billion through the European Social Fund for a youth guarantee. The Spanish government announced recently it would target it. It appears some specific targeted resources may be available. Deputy Lyons asked about the political mechanism required to implement a programme like this. In 1992 a joint Oireachtas committee was established by the coalition government to deal with jobs, which moved into the National Economic and Social Forum and a special grouping which produced a report on long-term unemployment. There needs to be an action-focused moment when people can be pulled together. Much of the work on what is needed already exists. It is about creating political momentum to make it happen urgently. I would like the committee to finish in July with an announcement, rather than beginning with an announcement to examine something. The body of work that could be done here is sufficient to know what needs to be done and to action agreement on it. The decisions should be made at this level.

The political discourse that shifts the blame to the unemployed is counter-productive and is not right for those suffering unemployment and poverty. The futility of moving on with the working age payment for people with disabilities and lone parents prior to the supports being in place must be avoided. I believe activation is the way to go but it must be quality activation that recognises the real obstacles people face. Immediate funding should be sought from the European Social Fund for a youth opportunity guarantee for those under the age of 25 prioritising those with less than second level education. It can happen if the State activates all of its tentacles and potential.

Chairman

We will now have a questions and answers session, following which the witnesses can add any further comments they would like to make.

Deputy Michael Conaghan

I thank Dr. Murphy for her forthright and provocative comments. I also thank Dr. Healy for his presentation. I have a question for Dr. Murphy on the activation measure. Typically, what would be the elements, in terms of training, education, social skills and so on, of the youth guarantee? I believe people should be able to choose the parts of an activation measure, such as fitness, health, swimming, mountain climbing and so on, which suits them. There should be a mix of lifestyles, including the obvious elements of education and training, which engages and provokes young people. People's personal lifestyles can become dysfunctional and need to be reshaped and reformed. Young people in particular find this challenging and would perhaps be more attracted to participation in lifestyle elements rather than in the education and training elements of schemes. We separate work from lifestyle too readily. A good activation measure should embrace all these elements so that it is as engaging as possible. Have the witnesses had any experience in this regard?

Dr. Mary Murphy

There are examples of the type of activation measures required. They would need to be a mix of some that already exist, such as the apprenticeship schemes on which Mr. Peter Rigney focused much attention earlier, and the internship programme. We would also like to see new educational opportunities including a focus on personal development. Dr. Healy identified other relevant measures earlier, including the part time job initiative and the community employment schemes.

The Forfás analysis states that 19,500 15 to 19 year olds have low educational qualifications, 10,000 20 to 24 year olds have higher secondary level qualifications and that 38,000 20 to 24 year olds have higher secondary to plc education. As such, there are three separate cohorts of young people under the age of 25 years who have fairly distinctive needs. The 15 to 19 year olds, the early school leavers, require an approach that is realistic in terms of where they are in life and the level of re-engagement they need, which must include a mixture of measures which address functional illiteracy and includes a personal development component which will take from where they are at into the future. We have many examples, including some successful Youthreach, Integra, Horizon and PETRA programmes which have been well evaluated in the past. We know what component of programmes can be brought together. This will be expensive and will require long-term investment and we will not see payback for a number of years. The payback is that these people will be educated to a degree which will ensure they do not simply move into a life cycle of low paid jobs or poverty. We want to get them onto the run that leads them to a sustainable life. We can ignore these people at their peril. If as a society we are mature we need to acknowledge their existence and to engage with that reality.

Dr. Seán Healy

There should be a focus from the commencement of engagement on putting together for each individual a portfolio containing information on their experience, skills and what they have done, which they can then present to an employer. While academic attainment and literacy are important, other elements, such as those suggested by Deputy Conaghan, are also important and should be a focus from the outset. It would be useful for all such information to be drawn together. Employers are not looking for one dimensional people rather they are looking for people with various skills. The type of portfolio I mentioned would help make a person more attractive to an employer.

I would like to pick up on what Dr. Healy said about the demand side. The Nevin Economic Research Institute recently suggested that up to €15 billion could be found from funding sources like the National Pensions Reserve Fund, the pension funds themselves and the European Investment Bank, etc. This needs to be taken seriously. When I discussed it with some Deputies in a casual way, I was told it has been examined and found to be pie in the sky. I would love to see an actual physical report from the Government setting out why this cannot be done. The Government needs to assure people that it has emptied out every proposal and exhausted its potential. In addition to Dr. Healy's idea, an idea has been proposed by the National Economic and Social Council. In its 2012 report, the council addressed the idea of direct employment and public works projects. There is also the possibility of a money stream from the European Social Fund, particularly with regard to youth unemployment. The State needs to treat these ideas with some urgency and respond to them. If they are pie in the sky, so be it but the State should explain to us why that is the case. Some of the ideas that are around the system at the moment are not being taken on with the kind of urgency and respect they deserve, in light of the urgency of the situation.

Deputy Lyons asked about the engagement of young people. As far as I can see, there is a great deal of demand for some of the projects that are suitable for young people. I am thinking of something like the transition Youthreach project. The reduction to €100 in the welfare payment for those under the age of 23 is having a massive impact on young people. If such people want to get their payments back to the full rate, they have to participate in something. I see young people actively looking for these places because they have little choice. There is a more productive and optimistic way of looking at it. I do not have the research to hand. I am speaking on the basis of my life experience. During the eight years I spent as a member of the Irish National Organisation of the Unemployed, I found that if a programme is quality, there is always a queue for it. Word gets out across the street quickly that a programme is good because one gets a job out of it or because those involved do good stuff. There are queues for programmes that work. People self-select themselves into such programmes quickly. Some groups of people may require extra motivation. As long as what one is offering is of a reasonable quality, one can engage in the obligation to work debate. If quality programmes that are proven to work are offered, one will not really need to sell them. They will sell themselves on the streets. Those who work in local labour market programmes will tell one that if there are two programmes side by side, it is often the case that one will have a massive waiting list and the other one will struggle to attract participants. The reason for that difference is often obvious. The programmes have to be of a certain quality. The option of re-engaging has to be a realistic one. That is part of the answer.

Chairman

It is probably fair to point out that the idea of bringing the funding sources together is what NewERA is about. It will fund the whole water programme. The Department of Public Expenditure and Reform is trying to determine the sources of money. We do not believe what is proposed is pie in the sky. The Government actually wants to achieve a scale of €15 billion or €16 billion, or even €18 billion or €20 billion, in accordance with the thinking behind NewERA originally. The scale is very low at present. In fairness to the Minister, I understand he is considering all the various sources, including private and public pension funds.

The report will have a role in driving the initiative. Urgency and scale are key. The concept is correct and we recognise that. It is a question of driving it quicker. The key is to have the money spent on infrastructure, thus leaving one in a better place to create and win jobs. I refer to broadband and water services, not just programmes that are filling a gap. There must be a long-term aim if we are to have a more competitive country. That is the thinking. We are all on the same page. It is a question of driving the initiative urgently.

Sr. Brigid Reynolds

Community infrastructure, although not related directly to the topic, is critical. This has been decimated in recent budgets. The community groups are the ones that will support young people in particular and other unemployed people in getting jobs. When I reflect on my experience regarding community groups and part-time jobs, I recall those groups were extremely creative and encouraged people to be creative about how they could use their talents. Many very creative and interesting projects associated with heritage, sport, music and tourism were engaged in. The communities had some space. Many communities are absolutely at rock bottom now in terms of their capacity owing to cutbacks in the recent budget. They must be protected or we will have even more problems.

Chairman

That is a fair comment. The community sector has a duty to come forward with initiatives. Many groups are doing work in communities. Much of what the Government is doing is associated with considering how to minimise administration costs and obtain added value. It is a question of doing more with less. This may involve groups coming together with initiatives and ideas. The Department, through the labour activation plans for which extra money is required, wants new ideas to be presented. The money can be found for the various groups but those involved need to come forward with ideas and work together more. I ask the delegates to bear this in mind when talking to community groups.

Dr. Seán Healy

That was a role that was fulfilled by local partnerships and the various initiatives that were funded to try to draw together community groups in local areas. One will always need that; otherwise there will be a counterproductive monolithic operation in the community and voluntary sector.

Sr. Brigid Reynolds

Dr. Murphy referred to people who are distant and who have fallen away altogether from the labour market. The community groups know these people and can target them.

Senator Marie-Louise O’Donnell

I thank the delegates for all we have learned. I disagree with the Chairman because community groups have been decimated. Many of them have been completely dispossessed, including the very ones that keep people from going over the edge. We need to pump far more money into this area.

I was interested in Dr. Murphy's comment on programmes of quality. I suppose it is a great advertisement for the Army and Naval Service in so far as people were queuing in their thousands. Why not in so far as the process is skilled, knowledge-based, educational, musical - one thinks of the Army band - and functioning? It says an awful lot about them.

I worry about the €15 billion because I am sure people are heading up against aspidistra plants when it is said that this sum is needed. One could nearly start at €30 billion and work one's way back. One must ask where exactly the money will be obtained. My grandmother always used to ask who would pay for something and how the money would be obtained. How will the sums of €5 million to be spent over three years be eked out, as suggested? Do the delegates see their job as outlining this to us so we can sign off on it? What is their involvement and pull-out in that regard? If one talks about seeking €15 billion from pension funds and we are down to the last €7 billion because the banks, through greed, incompetence and stupidity, got rid of most of the €17 billion that we started with, how will the mechanism function? Much of what was spoken about today involves an other-school process to bring people back in who have been disaffected, dispossessed or outside the education-job sector. Am I making sense?

Senator Marie-Louise O’Donnell

That is true but students are now in a position in which the job they believed or were told they would get might not be the one with which they begin or end up.

Dr. Seán Healy

That is almost certainly the case in the current circumstances. Very few people will get the job they believe they will get.

Dr. Mary Murphy

I thank our guests for engaging with us. We will link with them again, but we must adjourn on this topic until 10.30 a.m. tomorrow.

Dr. Seán Healy

I thank the Chairman.

The joint committee adjourned at 12.35 p.m. until 10.30 a.m. on Thursday, 19 April 2012.

JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht - Wednesday, 18 Apr 2012

Unemployment and Youth Unemployment: Discussion

Mr. Paul Sweeney

Mr. Peter Rigney

Mr. Paul Sweeney

Mr. Peter Rigney

Mr. Paul Sweeney

Mr. Peter Rigney

Mr. Peter Rigney

Mr. Peter Rigney

Mr. Peter Rigney

Mr. Paul Sweeney

Mr. Paul Sweeney

Mr. Paul Sweeney

Mr. Paul Sweeney

Mr. Peter Rigby

Dr. Seán Healy

Dr. Mary Murphy

Dr. Mary Murphy

Dr. Seán Healy

Dr. Seán Healy

Dr. Seán Healy

Dr. Seán Healy

Dr. Seán Healy

Ms Michelle Murphy

Dr. Mary Murphy

Sr. Brigid Reynolds

Dr. Seán Healy

Sr. Brigid Reynolds

Dr. Seán Healy

Dr. Seán Healy

Dr. Seán Healy

Dr. Seán Healy

Dr. Mary Murphy

Dr. Mary Murphy

Dr. Mary Murphy

Dr. Mary Murphy

Dr. Seán Healy

Dr. Seán Healy

JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht -
Wednesday, 18 Apr 2012