“July 31 saw the latest release of European Union unemployment numbers, and Monday’s gross domestic product figures brought no joy, especially for Greece. As Think Progress reports, Greek unemployment hit a new record of 27.6 % in May, while Spain’s June unemployment figure was 26.3%, according to Eurostat.
But, wait! you say. What about Ireland? Its unemployment rate has dropped an estimated 1.5 percentage points from its January 2012 peak of 15.1% to just 13.6% in June 2013. Isn’t austerity finally paying off there?
If only that were so. What actually is happening is that Ireland has returned to its historical solution of substantial out-migration to reduce the number of unemployed workers that show up in the official data. And yes, the numbers are way more than enough to wipe out the apparent 1.5 point drop.
According to the Central Statistics Office Ireland …emigration has surged from 72,000 in 2009, the last year of net in-migration, to 87,100 in 2012, when net out-migration was 34,400. If you look at net emigration of those 15-64, the closest we can get with the data to prime working age, the situation is even somewhat worse. Over 2010-2012, net out-migration in that age group has totalled 90,700.
I calculate the potential effect on the unemployment rate as follows. Ireland only compiles official unemployment data quarterly, and makes monthly estimates in between. So the last official unemployment rate was 13.7% for the first quarter of this year. According to the CSO, there were 292,000 unemployed then. Dividing by 0.137, we get a labour force of 2,131,387, subject to rounding error. Now add 90,700 to both numerator and denominator, and the maximum potential unemployment rate, if all of those people were in the labour force and unemployed, is 382,700/2,222,087 or 17.2%.
Now, certainly some of the 15-24 year olds would not be in the labour force, though many will. Even if we restrict ourselves to the 25-44 age group, net out-migration for 2010-2012 comes to 36,000, which would bring the unemployment rate back to 15.1%, equal to the worst month since the recession began.
We can see, then, that austerity is sinking all boats. Greece has passed Spain in unemployment and is producing barely 3/4 what it did in 2008. Ireland’s reduction in unemployment is a mirage based on emigration. The same is true in Latvia and Lithuania, by the way, which the Irish Times reports have lost 7.6% and 10.1% of their population between 2007 and 2012. As the paper notes, “If Spain and Italy had lost the same proportion, it would have been 11 million.”
Yet the drumbeat for austerity continues. The sequester goes on. And millions suffer needlessly.”
Actually I would argue that the “true” Irish unemployment rate minus enforced emigration (and as An Lorcánach points out in the Comments the state-promoted, statistics-massaging training/internship schemes) would be nearer to the 20% mark rather than just over over the 17% one, with youth unemployment in and around 40%. Despite the many political and media denials, and disdainful talk of “lifestyle emigration“, there is no doubt that mass emigration coupled with a relatively (and unfortunately) quiescent immigrant component to the national workforce is keeping the current Randinista class comfortably ensconced atop of Ireland’s wide-based, narrow-peaked social pyramid.