Ivana Bacik (Independent) | Oireachtas source

I welcome Professor Pissarides to the House. He is very welcome. I commend my colleague from Trinity College, Senator Barrett, who first suggested that Professor Pissarides might come to address us.

I have a particular affection for the London School of Economics, where I completed my masters degree in 1990-91 and have wonderful memories in particular of the late Professor Bill Wedderburn, who was lecturer and mentor to me there. LSE combines an extraordinary level of intellectual and academic rigour with a really strong level of civic and political engagement at public policy level. Professor Pissarides's career demonstrates that combination in terms of both his hugely impressive academic and scholarly output, and also his input into public policy at European and national level - quite apart from the Nobel Prize. We are delighted to have somebody of his eminence here and I thank him for coming. He brings not only the academic rigour but also membership of organisations such as the European employment task force, which is particularly important for those of us engaged in public policy.

Senator Healy Eames referred to a comment Professor Pissarides made on the award of the Nobel Prize in 2010 and the risk that deep welfare cuts, particularly cuts to jobseeker's allowance and housing benefit, may cause spiralling poverty and may have a detrimental impact on job creation. That is a very helpful comment for us to remember. I know he made it in the context of British Government policy, but it is something that has a resonance here also. The Minister for Social Protection, Deputy Burton, has stood firm against cuts to core social welfare rates and made the point on several occasions that social welfare spending is an economic stimulus - is a form of stimulus package - because payments made to those on welfare feed directly into the local economy through the local retail sector and so on. Cuts therefore impact not only on families on welfare but also on businesses their spending supports.

I very much welcome the point Professor Pissarides made on the need for spending on education and training during a recession. That is a point very well made and we need to emphasise it here. Regarding entrepreneurship, the professor mentioned the US as the powerhouse of organisations such as Apple and Google. In a recent blog he stated that this points to a difference between job-creation policies in Europe and those in the US. It is no coincidence that Ikea is a Swedish company rather than an American company as this demonstrates the different approaches taken. Ireland has a strong record of entrepreneurship, particularly in the IT sector. From Trinity College Dublin we have had companies such as Iona Technologies in the past and more recently major developments in the computed gaming sector where companies such as Havoc, the digital hub and so on have led the way. Senator White referred to areas in the Irish economy where there are job opportunities but insufficient skills and where we are still importing people with those skills. The IT and computer gaming sector is one of those areas. We have a record of entrepreneurship there and we need to stimulate it further.

I turn to some of the other points Professor Pissarides made on youth unemployment. This morning we received some very good news from the Department of Education and Skills in terms of youth retention rates at secondary schools, which with 90% of students staying on to complete secondary education is the highest it has ever been. In particular the number of boys at school has risen and the retention rate of students in disadvantaged schools has also risen. That is obviously linked to economic recession and a lack of employment opportunities, but it feeds into what the professor said about education. The Government has commenced many initiatives and my colleagues have referred to some of them including the Pathways to Work programme, JobBridge, Tús and the new SOLAS agency that replaces the pre-existing training agency.

The professor mentioned the need to ensure training in short courses and this is the way to lift people out of unemployment. While the previous employment training agency, FÁS, was much maligned, it had the strength of offering short and very labour market focused training programmes. I know many graduates who could not get work on foot of their primary degrees but following a six-month FÁS course in computer assisted design, for example, or some form of programming, were able to get employment and are still in employment as a result of that short course. That is also very important point.

The national policies in which we are engaged can clearly only go so far. As we take up the Presidency of the European Union in January we need to look at the idea of a European-wide youth guarantee proposal. Is Professor Pissarides familiar with the idea of a European youth guarantee to be funded potentially by the European Social Fund or European Structural Funds and which would guarantee young people that within four months of becoming unemployed they would be given a training place, an apprenticeship or a combined work and training placement, if not a job offer? Commitment is needed on this at European level where there is an EU average youth unemployment rate of 22%. Clearly Ireland's rate is higher at 30% as the professor pointed out. Does he believe this would be an appropriate measure to tackle youth unemployment?

Professor Pissarides mentioned wage subsidy schemes which in Germany have been used to great effect to bolster the automobile industry in times of recession. Does he believe that is something governments across the EU should adopt? I thank him for is very thought provoking and stimulating address.