Dáil Éireann Debate, Wednesday - 7 October 2020
159. Deputy Eoghan Murphy asked the Minister for Social Protection the details of research being conducted on the short and long-term impacts of the pandemic unemployment payment vis-à-vis traditional social welfare payment schemes and labour market actuation challenges. [29084/20]
Amharc ar fhreagraAt the onset of the Covid-19 pandemic, the Government quickly mobilised and implemented a range of income and employment support measures, including the Covid-19 Pandemic Unemployment Payment (PUP), to cushion the income shock experienced by workers and their employers. These income supports have proven to be effective in maintaining incomes and insulating people against a sudden and severe income shock. In all research and policy analyses undertaken by my Department, the impact of Covid-19 on the labour market, and the associated activation challenges, are a central consideration.
My Department, in collaboration with the Central Bank of Ireland, published a Working Paper in May entitled “The Initial Impacts of the Covid-19 Pandemic on Ireland’s Labour Market” which found that in the initial weeks of the pandemic, the most severely impacted sectors were tourism, hospitality and food, retail and construction. Moreover, those who had lost their jobs or were displaced by the pandemic, were more likely to be young, low-skilled and previously in part-time employment than the population average; reflecting the higher share of these workers in the sectors most affected.
The Labour Market Advisory Council, an expert group of academics and representatives from industry and business, was convened by my predecessor earlier this year to provide advice to Government on key employment and labour market challenges. The first task assigned to the Advisory Council was to develop, as a matter of urgency, proposals for actions to tackle the labour market challenges arising as a result of the pandemic. A Policy Paper entitled “Preparing for Economic Recovery” was published by the Council in June in response to this mandate and outlines a series of recommendations for Government on the public policy and labour market responses needed to tackle current labour market challenges.
The Advisory Council recognises that there are a range of challenges facing Ireland’s labour market, including the impact of the Covid-19 pandemic on particular cohorts of the labour market. It is proposed to deal with these topics in future Policy Papers.
My Department has worked with colleagues at the Economic and Social Research Institute (ESRI) to consider the impacts of the pandemic unemployment payment. Research by the ESRI, as part of their Budget Perspectives 2021 series, examined the potential cost and distributional effect of Covid-19 unemployment. It found that the Pandemic Unemployment Payment and Temporary Wage Subsidy Scheme significantly softened the financial impact of Covid-19 on families and household income.
The ESRI undertook a further social assessment of the impact of the introduction of the proposed new rates from September 2020 on behalf of my Department. The analysis considers the effects of the new PUP rates with reference to changes in household disposable income and the impact upon poverty rates. The results indicated that the changes resulted in a very small reduction in disposable income.
With regard to long term research plans, my Department has recently awarded a new poverty and social inclusion research programme to the ESRI. It is expected the resulting research will include analysis of the impact of the Covid-19 pandemic on the most vulnerable in Irish society, amongst other topics. In addition, my Department monitors independent research on areas of interest and commissions research where required.
