Ireland's NAP on employment: an update

Ireland's National Action Plan (NAP) on employment in response to the EU Employment Guidelines has been in effect for over a year, having been unveiled in April 1998, and is currently due for adjustment. Over the past year, the social partners have reacted quite favourably to the NAP, albeit with a number of criticisms. The key objective of the plan, that of reducing unemployment to 7% by the year 2000, has already been achieved and indeed exceeded. It will be much more difficult, however, to tackle the structural long-term unemployment that is endemic in some of Ireland's most disadvantaged areas. Another challenge facing the social partners and government is that there is a pressing requirement to deal with the labour/skills shortages that are becoming increasingly prevalent in certain sectors of the labour market.

The Deputy Prime Minister (Tanaiste), unveiled Ireland's National Action Plan (NAP) on employment on 20 April 1998 (IE9805116F). Like all EU Member States, Ireland drew up an NAP based on the EU's 1998 Employment Guidelines, based around the "pillars" of employability, entrepreneurship, adaptability and equal opportunities (EU9805107N). During summer 1999, Member States are to submit NAPs for 1999, analysing implementation of the 1998 Plans and describing the policy adjustments made to incorporate the changes introduced by the 1999 Employment Guidelines (EU9810130F).

Progress on tackling unemployment

The key objective of the 1998 NAP was to reduce unemployment to 7% by the year 2000. This target has already been achieved in May 1999, with Irish unemployment currently standing at 6.4%. The Deputy Prime Minister, Mary Harney, has said that over the next year or so there will be a "major push" to reduce the rate to below 5%.

The first part of the Plan (improving employability) places an important emphasis on the objectives of tackling youth unemployment and preventing long-term unemployment. These objectives are the central strategic focus of the NAP. Measures to improve employability have involved a continuing transition from passive to active labour market measures. Under the Plan, the Training and Employment Authority (Foras Áiseanna Saothair, FÁS) and local employment services have been instructed to contact all jobless persons aged under 25 as they reach six months on the unemployment register, with a view to providing them with employment or training. The intention is to prevent "welfare dependency" amongst young people. From what can be gauged to date, the impact has been quite significant, with some 51% of the young people who were called for an assessment interview having left the unemployment register. The process will shortly be extended to deal with all those under 25 who have been unemployed for 18 months or more and to those aged between 25 and 34 who have been unemployed for more than a year.

It will be a much slower and more difficult task to reduce unemployment amongst older people. The problem is that there is a substantial and long-standing structural dimension to Irish unemployment. A large number of older unemployed people have been out of work for quite a long period, while also generally having low levels of skills and education. Substantial time and resources will be required to tackle this problem. Finding work for older unemployed people is likely to be a much slower process than has been the case with the under-25s. In particular, it will be difficult to tackle unemployment, and the social and economic problems associated with it, in some of Ireland's more deprived areas. This is conceded in the text of the Plan: " the scale of long-term unemployment is such that there will be a need to continue to concentrate a range of programmes on the core stock of long-term unemployed."

The other three parts of the plan contain measures to: develop entrepreneurship; encourage partnership and adaptability, particularly in terms of increasing investment in skills and training; and to enhance equal opportunities and reconcile work and family life. Many of these measures had already been enshrined in Ireland's current three-year national agreement, Partnership 2000 (P2000) (IE9702103F).

The social partners' views of the NAP

Within the context of P2000's procedures the Government has consulted the social partners on the various issues associated with the Plan. The views of the social partners have been generally favourable, although there have been a number of criticisms. The general opinion at the time of publications was that the NAP was primarily a repackaging of existing commitments contained in P2000, with little significantly new being added.

The response from the Irish Business and Employers Confederation (IBEC) is that the Plan has progressed very well. There is a sense amongst employers that the mobilisation of FÁS and the new mechanisms that have been developed to find work for young people have achieved positive results, with an increased take-up of employment amongst young people and the reduction in the numbers registering as unemployed. There is a feeling that there is still much to be done with regard to promoting adaptability at the level of the enterprise, although there had been progress made here too. The perception is that there is now a requirement to sharpen the focus of the next phase of the NAP, within the context of a tight labour market and the problems associated with skill shortages. In addition, it is felt that mechanisms and resources will be needed to target the stock of long-term unemployed people. Finally, as mentioned above, there has been a sense that many of the measures set down in the Employment Guidelines and contained in the Plan are commitments that were already contained in P2000.

The Irish Congress of Trade Unions (ICTU) believes that the plan does not really go beyond existing measures and that there is a lack of specificity with regard to targets and timetables: "as the substance of the Employment Guidelines parallel the main themes of P2000, they provide the opportunity for the government, in consultation with the social partners, to set targets and deadlines in relation to the many employment-related commitments in P2000" (Proposals for implementation of the EU Guidelines (1998)).

There is a perception in Ireland's largest trade union, the Services, Industrial, Professional and Technical Union (SIPTU), that the NAP has been quite successful by its own standards, but that it has also created certain problems. It may, it is felt, have bypassed the national priorities contained in P2000 to some extent, because of the way in which it was drawn up to comply with the EU Guidelines. Whereas the Guidelines place an emphasis on tackling the flow into long-term unemployment, Ireland's existing employment strategy agreed under P2000 was to tackle the stock of long-term unemployment in the context of the ongoing economic boom. The EU Guidelines may, it is felt, have led to a reversal of the P2000 priority. There is recognition, however, that at this juncture there is a growing realisation of the need to pay greater attention to the stock problem. Finally, there is a perception that the local employment services are inadequately diffused and resourced, and that there is a need for a nationwide, properly resourced service.

The Irish National Organisation for the Unemployed (INOU) believes that the plan does not involve any additional funding and that the needs of the long-term unemployed are being neglected. There is also the fear that the process could be driven merely by targets to get people off the unemployment register, rather than any notion of what scheme or job is best suited to a particular individual.

Commentary

The key objective of the Irish NAP, that of reducing unemployment to 7% by the year 2000, has already been achieved. The four complementary policy areas contained in the Plan have been strategically important in the battle to reduce unemployment and will continue to be so. However, notwithstanding this success, it will be extremely difficult to tackle the structural long-term unemployment that is endemic in some of Ireland's most disadvantaged areas; especially amongst unskilled people over the age of 25.

There is some concern that prioritising policies to prevent unemployment amongst the young, at the expense of policies to tackle long-term unemployment, could exacerbate existing social problems in certain communities. Although combating youth unemployment is crucial, it would be a mistake to overlook the plight of older long-term unemployed people. Reducing the stock of the "core" long-term unemployed will be a big challenge over the next few years, and this fact is increasingly being recognised by the social partners and the government. If this challenge is to be overcome, substantial time and resources will have to be expended in order to bring this core of long-term unemployed people back into the labour market. Another challenge facing the social partners and the government is that there is a pressing requirement to deal with the labour/skill shortages that are becoming increasingly problematic in certain sectors in the context of a tight labour market. (Tony Dobbins, UCD)