Ireland: Working conditions of young entrants to the labour market

  • Observatory: EurWORK
  • Topic:
  • Job quality,
  • Published on: 18 desember 2013



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This CAR examines the working conditions of young entrants to the labour market in Ireland as of March 2013. Since the financial and economic crisis hit Ireland in 2008, employment opportunities and working conditions of young workers have deteriorated sharply. Large numbers of young people are choosing to emigrate. There is little sign that the situation facing young workers will improve in the next few years, especially as policy responses have been characterized by domestic austerity programmes and, externally, the terms of the bailout from the EU-ECB-IMF troika.

Introduction

This EWCO CAR is specifically focused on the group of “young entrants to the labour market”. This group includes all young people (between 15 and 30 years old) who have recently entered into the labour market (i.e., people with a work experience shorter than 1-2 years in the labour market), with relative independence of their age and for whom work is their main and core activity. This definition excludes young people for whom studies are their main activity but who combine their studies with some remunerated activity as part of their training programmes (e.g. apprenticeships in dual systems), as well as unemployed young people, even if they are actively looking for a job (see Background note for more detailed information on the concept of young entrants to be considered in the research).

The CAR coordinating team is conscious that such as “narrow” definition of “young entrants to the labour market” can make difficult the identification and collection of relevant information on the topic. Therefore, and in the case no national information is available using this “narrow” definition, National Correspondents can use a “proxy” definition of “young entrant to the labour market” as any young person (i.e. between 15 and 30 years old) who is in employment, irrespectively of the number of years of experience that he/she has in the labour market (again, unemployed young people are excluded from the analysis).

The questionnaire focuses on the following topics:

  • General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups (around 700 words)

  • Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country (around 600 words)

  • Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis (around 500 words)

  • Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market (around 500 words)

  • Final commentary on the main results (around 100 words)

Block 1: General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national research/studies) on a number of working conditions-related variables specifically related to young entrants to the labour market in comparison to other age groups. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified in relation to other age groups, stressing the causes and rationale of these differences

Suggested extension of this section: around 700 words

In the Irish context, the range of information available on working conditions of young workers has been limited. In quarter 1 of 2008, in response to a request from the social partners, the Central Statistics Office (CSO) included questions on working conditions of all employees aged fifteen years or older in the Quarterly National Household Survey (QNHS). CSO working conditions survey 2008

The CSO working conditions survey covered 5 broad topics: provision of benefits to employees, paid for by their employer, exclusive of direct income; availability of other working arrangements, for example flexible working arrangements; provision of training by the employer and type of training provided; issues related to employment law and rights, for example the receipt of a written contract on commencement of employment, the receipt of regular payslips and knowledge of employment law; and perceived job security, specifically whether the employee expected to still be in their job in six months time and if not, why not.

A second source of data on working conditions in Ireland, the National Workplace Survey of employees (2009) identifies a variety of working conditions issues experienced by employees in Ireland. Unfortunately, however, there is limited age-related breakdown of data in the NWS. The sample size of the NWS is comprised of 5110 employees who were interviewed by telephone between March and June 2009.

1.1 Career and employment security issues

To establish employees’ sense of security in their employment employees were asked in the CSO working conditions survey if they expected to be in their current employment in six months time. In addition those who answered no to this question were asked under what circumstances they expected to stop working for their current employment with the following response categories: voluntary termination/resignation, compulsory termination by their employer, other. Overall just 7% of employees indicated that they did not expect to be in their current employment six months after the date of interview. A further 7% stated that they did not know if they would be in their employment 6 months after interview with the remaining 86% of employees stating that they expected to still be in their current employment. The proportion of younger employees that expected not to be in their current job in six months time was higher than for older employees (17% of employees aged 15-19 and 15% for those aged 20-24 compared with 8% or less for all other age groups). Younger employees were more likely to expect not to be in their current job due to a voluntary resignation (12% of 15-19 year olds and 10% of 20-24 year olds compared with 4% or less of employees in all other age groups).

On provision of paid benefits, in the CSO working conditions survey all employees were asked which of the following benefits were provided to them by their employer: pension/pension contribution, crèche/childcare subsidy, medical plan/ insurance cover/company GP. Just over half of employees (52%) received at least one of the three above listed work related benefits from their employer. The most common benefit provided to employees by their employer was a pension or pension contributions (51%). The second most common benefit was the provision of a medical plan/ insurance cover/ company GP with 15% of employees reporting that they received this benefit. By far the least common benefit, with just 1% of employees receiving it, was a crèche or a childcare subsidy provided by the employer. In terms of age breakdown, the proportion who received at least one benefit was lowest among younger employees with less than one in ten 15-19 year old employees (9%) receiving at least one of the benefits. In contrast, between 53% and 64% of employees in the age groups between 25 and 64 years of age reported receiving at least one benefit. The highest level was reported by employees aged 45-59 (64%). Approximately one in four 20-24 year old employees (28%) and one in five employees aged over 65 (20%) reported receiving at least one benefit. The percentage of employees that were provided with at least one of the listed benefits from their employer increases with the number of years in the job. An estimated 35% of employees who had been in their current job for between 0 to 4 years had at least one of the benefits. By comparison 85% of employees who had been in their current job for twenty five years or more had at least one of the benefits provided by their employer.

On pay, the NWS 2009 found that younger workers under 25 are more likely than those in the 25-54 year age group to receive no rewards in addition to basic pay. For example, receipt of regular pay increments increases steadily with age.

Job satisfaction was found in the NWS 2009 to rise with age and job tenure.

1.2 Skills development

The CSO working conditions survey asked all employees whether they had participated in training in the last 12 months provided or paid for by their employer. Those that stated they received training in the last 12 months were asked which of the following types of training they received: induction/Health and Safety short courses, job-related training course of up to one working week duration (includes any short course ranging from 1 hour to a full working week), job-related training course of more than one working week duration, none of the above but other. A quarter of employees (25%) stated that they had participated in training in the last 12 months which had been paid for or provided by their employer. The highest proportion reported attending job related training of up to 1 week in duration with 16% reporting having attended such training in the 12 months prior to interview. Just 3% of employees reported having attended a job related course of more than 1 week duration while 9% attended induction or health and safety courses. Employees aged 65 or more and those aged 15-19 were the least likely to receive training (13% compared with 20% or more for those in the age groups between 20 and 64 years of age).

The National Workplace Survey (2009) found that 44.9% of employee respondents said they had participated in employer sponsored training in the past two years, compared to 51.6% in the 25-39 age group, 49.3% in the 40-54 age group, and 43.9% in the 55 years plus age group. Therefore, 55.1% of employees aged under 25 had participated in no training in the past two years, compared to 48.4% of those aged between 25-39.

1.3 Health and well being

There is no age related data in this area.

1.4 Reconciliation of working and non-working life

In the CSO working conditions survey all employees were asked which of the following working arrangements were available to them in their workplace: paid sick leave, career breaks, flexible work arrangements (e.g. part-time, parental leave, term time, work from home), paid leave to attend job-related course/training. Overall 72% of employees indicated that at least one of the listed working arrangements was available to them. The most common working arrangement available to employees in their workplace was paid sick leave with close to two-thirds of employees (64%) reporting having this available. The second most common working arrangement available to employees was paid leave to attend a job related course or training (reported by 44% of employees). Nearly two in five employees (36%) reported availability of flexible working arrangements. The working arrangement least frequently available to employees was a career break (28% of employees). Employees in the youngest age group (15-19) were significantly less likely to have at least one of the working arrangements available to them than those in older age groups (27% compared with 75% or more among those in the age groups between 25 and 64 years of age). The highest level of availability was reported among employees aged 45-59 (81%). Less than three fifths (59%) of employees in their current job less than 5 years reported availability of at least one of the working arrangements compared with 81% of employees in their current job 5 -14 years, 87% of employees in their job 15-24 years and 93% of employees in their job 25 years or more.

Block 2: Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country

NCs are kindly requested to provide the most updated information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions within the group of young entrants to the labour market, for a series of variables. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 600 words

It is difficult to find information specifically on differences in working conditions within the group of young entrants to the labour market.

2.1 Personal characteristics of young entrants

According to the CSO working conditions survey, there was no difference in pension coverage for males and females in the 20-24 and 25-44 age groups in Ireland.

Young people in permanent jobs are more likely to be entitled to company occupational pension schemes than those in temporary jobs, and/or more likely to fund a personal pension. Those in temporary contracts will often have to rely on the state pension. It is down to individual companies as to whether or not they provide occupational pension entitlements to staff on temporary contracts – most do not. Likewise, entitlement to sickness and maternity benefits and the like can differ in situations where young people on temporary contracts do not accrue sufficient social insurance contributions to qualify for maternity benefit and sickness benefit. Although similar disadvantages may be experienced by young workers in permanent posts if they have been employed only for a short time, the fact remains that it is often easier for permanent workers to build up their contributions through continuous service than it is for temporary workers.

2.2 Occupational characteristics

The deterioration in working conditions facing young workers are particularly acute in the construction sector. According to the FAS Quarterly Labour Market Commentary for spring/summer 2010, the construction sector alone accounted for almost half (47%) of the total decline in employment between 2008 and 2010 in Ireland. It is estimated that about one in three males in Ireland worked in the construction sector at the height of the boom in 2006. Young workers in the construction sector have been particularly badly affected by the subsequent recession in Ireland – notably after the property bubble burst and various developers’ projects were cancelled. The reduction in new construction apprenticeships from 2008 onwards illustrates this. The 2008 annual report of the state training and employment agency FAS suggests that while the apprenticeship system continued to be a significant component of FÁS’ training services, the downturn in the construction sector has disproportionately impacted on the system. The numbers completing the three off-the-job phases of apprenticeship training totalled 18,237 in 2008, up 1.7% on 2007. However, the number of new apprentices fell significantly in 2008 to 3,765, 44% less than the number registered in 2007. This reduced level of registrations arose mainly in the construction-related apprenticeship trades and reflected the large reduction of activity in the construction sector.

Also, it was evident from the CSO working conditions survey that variation could be seen across sectors of employment with employees in the hotels and restaurants sector having clearly the highest proportion of employees expecting not to be in their current job in six months

(12% compared with 7% of employees overall). The higher figure for job insecurity in hotels and restaurants can be attributed to the other characteristics of employment associated with the sector, for example a lower proportion of permanent jobs and a higher proportion of younger employees.

Block 3: Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis

NCs are kindly requested to provide information on the following items: NCs are kindly requested to provide information (coming from national surveys, administrative registers or ad-hoc national researches/studies) on differences of working conditions amongst the group of young entrants to the labour market in comparison to the situation five years ago. Please provide the information only for those variables where significant/important differences, either positive or negative, can be identified, stressing the causes and rationale of these differences

Suggested extension of this section: around 500 words

3.1 Please provide information on the evolution of working conditions of young labour entrants in the last five years. Have working conditions of this group improved/deteriorated in comparison to the existing situation five years ago (before the economic crisis began)? What are the reasons for these changes

Eurostat Labour Force Survey (LFS) data charts the rising occurrence of temporary insecure employment among young people in Ireland, particularly since the onset of the financial and economic crisis in 2008. The LFS data indicates that temporary employees in Ireland as a share of total employees aged 15-24 rose from 11.2% in 2004 to 34.2% in 2011 – this constituted a massive 23 percentage point increase. The LFS data is supported by a recent study by the ILO, which shows that change in the incidence of youth temporary employment in total employment between 2007-2011 was significantly higher in Ireland (13.7 percentage point rise) than elsewhere in the EU (1.2% percentage point average rise for EU-27). Further, youth part-time employment has grown faster than adult part-time employment both before and during the economic crisis in Ireland and elsewhere in the EU. Between the second quarter of 2008 and 2011, the youth part-time employment rate increased by 3.6 percentage points in the European Union as a whole while it increased by substantial 20.7 percentage points in Ireland. Part-time youth employment is often temporary so there is frequently a correlation between the two. The ILO study is entitled ‘Global Employment Trends for Youth 2012’. http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_180976.pdf

Working conditions of young labour entrants have clearly deteriorated in comparison to five years ago, with employment generally much more insecure, precarious, and temporary. As for the reason, effects associated with the crisis would appear to be the main reason underpinning the rise of temporary employment in Ireland amongst the young in recent years. The growth of temporary employment and part-time work, in particular since the global financial and economic crisis, suggests that this work is increasingly taken up by young people because it is the only option available in a precarious labour market context, where, according to Central Statistics Office (CSO) data, youth unemployment in the 20-24 age category in Ireland stood at 29% in the third quarter of 2012 (the overall unemployment rate was 15%). Many employers in Ireland may favour placing young people on temporary contracts because they are cautious about creating longer-term jobs given the uncertainty unleashed during the crisis, and it also allows them to reduce labour costs.

3.2 Based on possible existing prospective studies, please provide information on the expected evolution of employment levels and working conditions of young labour market entrants in your country in the near future (coming 2-3 years)

The latest Quarterly Economic Commentary for winter 2012 by the Economic and Social Research Institute (ESRI) provides quite a downbeat prognosis of the expected evolution of employment levels in Ireland for the coming 2-3 years (notably for young entrants to the labour market). ESRI Quarterly Economic Commentary Winter 2012

The rate of unemployment remains above 14 per cent. It is forecast by the ESRI to decline from 14.9 per cent in 2012 to 14.6 per cent in 2013 and 14.3 per cent in 2014. However, the main driving force behind this reduction is ongoing net emigration; notably of young people.

Block 4: Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market

4.1 Identify main recent national measures/initiatives (1-2) put in place in your country by public authorities in order to improve employment opportunities and working conditions for young entrants to the labour market.

Active Labour Market Policies and other measures in Ireland directed at young entrants are not paying enough attention to the quality of jobs and working conditions offered. Indeed, given the scale of Ireland’s economic and unemployment crisis, there has been a discernible shift in funding to passive labour market policy during the crisis, and away from ALMP - this reflects the massive increase in unemployed people seeking unemployment benefits between 2008-2013, including large numbers of young people. During the economic boom years, when unemployment fell to nearly 4%, Ireland had a number of ALMPs directed at assisting the young unemployed, for instance, to enter the labour market. The rapidity of the shift from boom to crisis, and near full employment to mass unemployment, between 2008 and 2013, is unprecedented. In sum, the crisis has diverted funding towards social welfare payments, which might otherwise have been directed to ALMPs.

Some of those measures that are linked to the aim of encouraging young entrants into the labour market are to incentivize employers to take on new workers and to incentivize the young themselves to make the transition from welfare to work (by cutting social welfare entitlements for young people).

In terms of incentivizing employers, in June 2010 the government announced a new €36 million scheme which gives employers pay-related social insurance (PRSI) exemptions for taking on new workers who have been unemployed for six months or more. The measure is specifically targeted at those who have been out of work for at least six months. Any employer creating a new job for a person who has been unemployed for six months will save about €3,000 over a year, because of reduced employer contributions for pay-related social insurance.

The government has also cut social welfare rates for young workers - the perception being that they were too high and act as a disincentive to young people entering their first job and staying in the labour market. The view was that this would improve employment opportunities for young people. The rate of Jobseekers Allowance paid to new claimants under the age of 20 was reduced by the Government from €204.30 per week to €100 per week, with effect from the first week of May 2009. In April 2009, then Minister for Social and Family Affairs, Mary Hannafin said the changes were made “to incentivise 18 and 19 year old jobseekers to avail of education and training opportunities and try to prevent their becoming welfare dependent from a young age, changes are being made to the Jobseekers Allowance… This decision was made on foot of ongoing consideration of unemployment and incentives policy by Government. It is not discriminatory but rather a targeted measure aimed at protecting young people from welfare dependency. Receiving the full adult rate of a jobseekers payment at 18 years of age, without a strong financial incentive to engage in education or training, can lead to welfare dependency from an early age. If they do not improve their skills, such young persons are at risk of becoming long-term unemployed from a young age. Therefore, it is considered necessary to provide 18 and 19 year old jobseekers with a strong financial incentive to engage in education or training or to take up employment that pays more than €100 per week.”

From January 2010, the rate of Jobseeker’s Allowance for new claimants aged 20 and 21 without dependent children was also reduced to €100; for new claimants aged 22 to 24, without dependent children,  it was reduced to €150; and for all people aged 25 and over it was reduced to €196. From January 2011, the maximum rate of Jobseekers Allowance was cut by €8 per week to €188.

Given the very high unemployment statistics for young people in Ireland, in particular, it seems that employer incentives and cuts to social welfare benefits have not had an impact on improving employment opportunities for young people. The acute problem driving the lack of employment opportunities and deterioration in working conditions for many young people appears to be the deflationary spiral affecting the country and related domestic and European imposed austerity policies, and lack of a major demand-side job stimulus programme to rectify this.

4.2 Identify main recent initiatives (1-2) put in place in your country by social partners (either at national, sector or company level) in order to improve working conditions amongst young entrants to the labour market.

Between 1987 and 2009, the social partners in Ireland played an active role in shaping youth employment policy through national multi-employer social partnership agreements. However, engagement in bipartite and tripartite social dialogue relating to issues about working conditions of young workers has decreased dramatically since Ireland entered recession in 2008 and following the breakdown of social partnership in late 2009. Consequently, little social dialogue has occurred since the recession hit. As such, unless social partnership is resurrected in some form, the state alone is now responsible for policies to improve working conditions for young people nationally (see 4.1 above).

At company level, although many companies in Ireland have reacted to the economic crisis by making workers redundant, some companies have opted for alternative measures in an attempt to ride-out the recession. Such companies want to retain skilled/valuable staff. In relation to this, there is some awareness that shedding key staff now would necessitate attracting and recruiting new staff when the upturn occurs. As such, some companies do think and plan beyond the short term. Alternative measures to redundancy relating to young workers adopted by organizations in Ireland include short-time working, sabbaticals/career breaks (including training-related breaks) and apprenticeships.

In the banking and finance sector, paid career breaks (which can incorporate education/training-related breaks) have attracted attention. One example was the offer by Irish Life & Permanent’s banking units of two and three year paid career breaks from October 2008: €20,000 for a two-year break and up to €35,000 for a three year break. The scheme was aimed at cutting the company’s costs during the downturn while retaining trained staff in anticipation of a recovery. Many staff availing of this option would be categorized as young workers.

In the public sector, in October 2010 Dublin City Council launched a work placement scheme for apprentices laid-off since the start of the recession. Labour Councillor Kevin Humphries said there were nearly 8,000 unemployed apprentices in Ireland who require 26-weeks work experience to complete their qualifications; with the vast majority in the construction industry. Cllr Humphries said he had been campaigning for this programme for 12 months and urged all other local authorities to follow this example should it prove successful.

Commentary by the NC

Until the financial and economic crisis hit the country severely in 2008, Ireland had been relatively successful in reducing the number of unemployed young people and creating jobs for them. The various labour market activation policies had been coordinated through the National Employment Action Plan (EAP) as well as national ’social partnership’ pacts. However, the situation relating to active labour market policies (ALMPs), and particularly the labour market predicament facing young workers, has changed dramatically since the crisis hit Ireland particularly badly from 2008. Since then the policy focus of successive Irish government’s has been on attempting to fix a broken banking system and (a knock-on impact of this) - through a European and domestically driven austerity policy - implementing successive severe cuts in public spending aimed at reducing the country‘s debt. This deflationary approach, together with a contraction in private sector employment, has seen unemployment rates of young workers rise rapidly. The breakdown of Ireland’s social partnership model in 2009 has greatly restricted engagement between the government and social partners on ALMP for young workers. It also seems to be the case that ALMPs for young workers in Ireland are too fragmented and small-scale to make a significant impact. A coordinated large-scale ALMP/jobs plan stimulus would seem to be required to assist young workers. But the country’s budgetary and debt problem means the government is unlikely to devote the necessary resources for this to happen. In the meantime, the labour market participation rate of young men, in particular, continues to decline, with the spectre of emigration having returned as young Irish leave for countries like Australia.

Tony Dobbins, Bangor University

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