This is a time of severe economic difficulties in Ireland and worldwide. In Ireland the single largest source of increase in unemployment has been the rapid and severe deterioration in construction activity. The aim of the recently published Irish Labour Market Review is to discuss possible responses.
In recent years, activation measures have represented the primary approach used to help the unemployed back into employment. In its recent review of activation policies in Ireland, the OECD argues that such an approach has been largely effective and that greater resources should be devoted to activation methods.
The Review discusses moves in Australia and the UK to place greater emphasis on getting people into work rather than training them for employment, with the training component coming, if at all, once a person is in a job. The idea behind the Work First approach is that what most unemployed people want is a job rather than training. For highly-skilled workers who have been made redundant and who need very little intervention in terms of training or job-seeking skills, an internship programme or an enhanced Work Placement, to help place unemployed persons into real jobs on a temporary basis, is proposed as a complement to the Work First approach.
The Review says there is a case for putting a greater emphasis on getting unemployed persons into employment rather than training as many of those becoming unemployed are likely to be job-ready and have little need or desire to participate in full-time training. That said, there will be certain groups for whom training will be crucial to improving their employability. More generally, over the longer-term, actions to upskill the workforce will continue to reap benefits once the current downturn has passed.
The Review also considers the skill requirements of the existing workforce. While recent studies show that there has been an increase in training over recent years, most training is concentrated on well-educated and younger employees to the exclusion of lower-qualified and older workers. The Review argues that Government intervention should be focused on market failures such as the under-investment in the training of low-skilled employees.
As unemployment rises, young disadvantaged persons are likely to be among those most affected and the final chapter considers the position of Young persons who are Not in Employment, Education or Training (NEETS). The overall percentage of NEETs in Ireland has been relatively modest, but as the numbers unemployed rose during 2008, so the percentage of NEETs rose to nearly 10%. The Review says that there should be a re-consideration of the extent to which existing programmes are currently picking-up all those who should benefit from it.