Written answers

Thursday, 1 July 2021

Department of Employment Affairs and Social Protection

Labour Market

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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309. To ask the Minister for Employment Affairs and Social Protection the extent to which she foresees an improvement culminating in a drop in unemployment levels in all age cohorts as we approach quarter four in 2021; and if she will make a statement on the matter. [35716/21]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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Prior to the pandemic, the unemployment rate in Q4 2019 stood at approximately 4.5 percent. Since the onset of the COVID-19 pandemic in March 2020, both employment and unemployment levels have been adversely impacted.

Latest estimates from the CSO indicate that, as of June 2021, the traditional unemployment rate stood at 8.1 percent. However, this estimate excludes those in receipt of the Pandemic Unemployment Payment (PUP). When all those in receipt of the PUP are included, this gives a COVID-19 adjusted unemployment rate estimate of 18.3 percent at the end of June.

As a result of the effective rollout of the COVID-19 vaccination programme and consequent easing of public health restrictions, a significant share of those temporarily displaced by the pandemic have been able to return to work in recent weeks. This is reflected in the month-on-month reduction in COVID-19 adjusted unemployment figures since the peak of Level 5 restrictions in February 2021. Since the 2021 peak in PUP recipients in February at over 485,000, the number of individuals supported by the payment has reduced by over 53 percent, currently standing at just below 228,000 as of June 29th 2021.

As restrictions continue to ease in the coming weeks and months, I expect numbers in receipt of the PUP, and in turn the COVID-19 adjusted unemployment rate, to continue to fall steadily as more people return to work. This anticipated trend is supported by the most recent unemployment forecasts from both the Department of Finance in their Stability Programme Update (April 2021) and the latest Quarterly Economic Commentary from the ESRI (June 2021).

The Department of Finance estimate an unemployment rate of just over 11 per cent by Q4 2021, while the ESRI forecast is more optimistic, anticipating unemployment to be closer to 9 percent by year end, driven by an expected strong increase in domestic sources of growth. Both of these sets of forecasts are predicated on the successful rollout of the vaccine programme and a continued, and more permanent, easing of public health restrictions over the course of the year.

While neither the Department of Finance nor the ESRI provide unemployment forecasts by age cohort, I am acutely aware that the pandemic has not been felt equally across all groups. Younger workers (under the age of 25) have been particularly affected as they typically make up a significant share of the workers in those sectors most impacted by the pandemic and associated public health restrictions, namely hospitality (accommodation & food) and retail.

While a reduction has been seen in all age cohorts in receipt of the PUP since the recent reopening of these sectors, the largest reduction has been in the numbers of younger workers. Over the past week, the number of PUP claims attributable to young persons has fallen by 6,000 cases. These reductions are reflected in the latest COVID-19 adjusted youth unemployment rate which for June stands at 44.2 percent, a sharp reduction from the May figure of 58.8 percent.

Given the broad reopening planned for all sectors of the economy over the coming months, I anticipate that the forecast reductions in unemployment will be spread across all age groups.

It is clear that additional numbers of persons will require assistance and support to return to employment, reskill and to find new jobs. The Government is committed to supporting a range of initiatives to assist people back to work as outlined under the Government’s ‘Economic Recovery Plan’. The Plan sets out a jobs-lead recovery by supporting sectors and workers most impacted by the pandemic, with an overall ambition of exceeding pre-crisis employment levels by the end of 2024.

Central to achieving this objective will be the Government’s forthcoming national employment services strategy, ‘Pathways to Work 2021-2025’, which is currently being finalised by my Department. By increasing labour market supports, and through the provision of employment supports, activation and skills opportunities, the Pathways to Work strategy will act as a key delivery mechanism of the Economic Recovery Plan’s second pillar ‘Helping People Back into Work’.

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