Dr. Peter Rigney:

The concept of workless households has come to us courtesy of Europe and EUROSTAT. It is a metric on which Ireland does not perform particularly well in an international context, for reasons which are not entirely clear but which are pointed to in a recent report from the Economic and Social Research Institute, ESRI. There is some confusion and overlap between workless households and what are described as very low work intensity households.

ICTU cautions against devising policy measures which focus exclusively on workless households. A recent ESRI study shows that very low work intensity households are inextricably linked with the problem of working poor.

In our view there are two priority areas in tackling this: long-term unemployment and NEETs, which are young people who are not in education, employment or training.

In 2009, the proportion living in low-work intensity households, including workless ones, varied from 26% in Ireland, far larger than in any other EU country, and over 16% in both Belgium and the UK, to 7% in Sweden and just 6% in Cyprus. It is worth noting that according to a recent Dutch study the proportion of those living in very low-work intensity households who had an income from work in Ireland was 1.2% in 2006 but had risen spectacularly to 20% by 2009. In the same year the comparative figure for EU 12 was 12.7%.

Those in very low-work intensity, VLWI, households have a more disadvantaged educational and social class profile, which means that a larger human capital investment will be needed to enable them to take an active part in the labour force. In addition, they are more likely to be lone parents or to have a larger number of children. Child care and its costs are a key issue in addressing labour market participation in workless and VLWI households.

A Swedish man and his Irish wife decided to move to Sweden because they felt Ireland was not going to work out for them. The most immediate thing they noticed was that their child care costs went from €800 per month down to €80 a month. Ireland is therefore an outlier and if we want to address participation in the workplace by women that issue has to be addressed.

There are many similarities between the risk factors of being an adult in a jobless household and long-term unemployment. Profiling models indicate that the risk of long-term unemployment is greater for those with low levels of education, larger numbers of children and for older age groups. In addition, unemployed men who have a spouse in employment are less likely to become long-term unemployed. That 2009 research was carried out by Philip O’Connell late of the ESRI and now of the Geary Institute.

If access to active labour market programmes was allocated on the basis of the probability of becoming or remaining long-term unemployed, this would already go some of the way towards targeting resources towards adults in jobless households.

The ESRI goes on to makes the following observation about jobless households:

Personal life-course decisions on living arrangements and family formation, on the other hand, are less amenable to policy intervention. However, designing policies requires an understanding of the full range of factors that are important, even if not all of them are amenable to policy intervention.

I do not fully know what that means but perhaps the Oireachtas has a translation service which could get that translated.

There is no quick or easy solution to this new problem which Europe has brought to our attention. The high level in Ireland is linked to a mix of factors, of which the following are prominent. The first is the cost of child care. Ireland is one of the costliest countries in the EU for child care. This will tend to lock women – especially those who are lone parents - out of the labour market.

The second factor is household means testing. People on low incomes will be less likely to take risks. If the perceived best way of protecting household income is through having the same social welfare status as the rest of the household, people will react in an economically rational way and will stay where they are. There was an illustration of this two Christmases ago. The system of dealing with people in economically precarious positions should have been taken as a guarantee, particularly pre-2007.

The third factor is access to job information. We are suffering here from the weakness of our public employment service – now being addressed in Intreo. However we are also reaping the long-term effects of policies on public housing specifically the infamous surrender grant of the 1980s, which cleared much public housing of most of those who worked.

In other words, as much information on jobs is provided by word of mouth through friends, neighbours and family, this means the chances of a person living in a workless estate receiving information on jobs is concomitantly less.

In the view of congress, the new emphasis on joblessness and very low work intensity, VLWI, households is welcome and should direct us towards further action in what are, in our view, three priority areas, namely, long-term unemployment, young people not in employment, education or training, NEETs and the cost of child care and the possibility of support for this cost being targeted at VLWI households.