DAVID TUCKER

DESPITE some signs of improvement in the local economy, County Wexford continues to be left behind and is not enjoying a fair share of the national recovery, according to a newly-published economic monitor produced by three WIT academics.

And with national government putting a disproptionate share of resources and investment into Dublin, it’s unlikely the situation will improve in the short term, with Wexford for instance receiving far less than its fair share of IDA jobs.

There is also evidence of low job quality as the returns for taxes on work (PAYE, USC, and self-employed taxes) in Wexford are 41 per cent of what would be expected based on population share.

Dr Cormac O’Keeffe, lecturer in Finance and Economics at WIT Business School, says that the national policy approach is focused on the economic crisis being over, but there is still unfinished business in relation to the economic crisis locally.

‘The South East region is home to 10.7 per cent of the national population, yet it is clear there is no plan to turn the regional economy around,’ he said.

In the latest South East Economic Indicator, its authors say the regional is recovering strongly from the lows of 2012 and there has been a strong and sustained GDP growth and declines in unemployment. This filtering through to stronger consumer sentiment and a strengthening property market

But while the regional economy is recovering along with the national economy, the regional recovery is a good deal weaker, and so overall the region’s economy if falling further behind the State, and other regios within the State.

The very pronounced deficit in regional higher education capacity, acute hospital services, IDA and Enterprise Ireland activity drives even lower job quality.

While nationally more than €1.7 billion has been invested in higher education capital projects, there was no State investment in any projects in the South East; suggesting there is no policy appeitite to address th structural weaknesses in the regiona’s economy.

The region faces economic headwinds shared with the State – such as Brexit and the fragile EU recovery – but the structural economic issues within the region continye to assert themselves as the dominant economic trend, says the report prepared by the lecturers at WIT School of Business to track developments in the South East economy.

Unemployment in the region, at 18.8 per cent, is the highest in the State, and three of its counties Wexford, Waterford and Carlow were in the top eight in terms of unemployment. Similarly, the region, with unemployment 2.6 per cent above the national average, is the only one in the State falling short of the government’s Action Plan for Jobs target.

Income tax returns are a proxy for job quality. Actual South East returns are 51.4 per cent of the national average, consistent in each county of the region, evidencing low job quality as well as higher levels of unemployment.

The regional lacks quality PAYE jobs (44.8 per cent of the income tax return of the nationnal average, with income taxes from those who are self-employed being above three quarters of the State average.

This demonstrates a lack of high-paid PAYE jobs, such as IDA or government jobs and that surplus labour is absorbed by necessity entrepreneurship.

The South East has the highest proportion of unskilled workers and the highest proportio of unskilled workers and the highest proportion of unskilled and semi-skilled workers combined.

The region continues to suffer relative economic decline, despite the welcome absolute employment growth. Higher rates of unemployment are generally linked with labour markets that suffer from lower general pay, low job security and poorer working conditions.

The long-term trend of labour market turnover has not been positive for the region, with higher paid skilled manufacturing jobs being replaced by poorer quality unskilled jobs, with visible deterioration in income quality.

The report’s authors say they can find no evidence of any action to support the government’s promise in the Action Plan for Jobs to bring unemployment in the region to within one percentage point of the national average, and no commitments have been made to improve job quality.

‘We continue to be surprised that despite having the highest rate of unemployment of any Irish region, all of the government’s targeted measures to reduce unemployment, such as Springboard and the IDA, have a greater focus on other regions, and significantly less than the pro-rata shares of these measures are made in the South East.

With 10.7 per cent of the population, the South East has just 6.7 per cent of all IDA jobs, which are among the best paid in Ireland, and despite some notable successes in the region, the direct deficit in IDA jobs here has grown by a further 5.8 per centyearonyearto8,065,withafurtherdeficitof 5,705 indirect jobs.

The authors of the report - Dr Cormac O’Keefe. John Casey and Dr Ray Griffin - say that with such a significant and widening deficit of IDA supported jobs in the region, acquiring new IDA clients is critical to closing the regional economic gap.

They say that while there was a significant improvement following the appointment of a regional manager in 2015, following a 20-year gap, this had now fallen back and Dublin and the other regional-city economies continue to receive a disproportionately large number of new client visits.

Low quality jobs and persistently higher rates of unemployment arise from lower educational attainment within the region.

The Springboard+ initiative offers free tutition in industry relevant programmes for unemployed jobseekers and is an important measure designed higher education providers drives relative economic decline and in the absence of transformative investment, it is very unlikely that the two main providers in the region will achieve the growth required to address the higher education capacity deficit in the region.

Given the absence of capital spending over the past 10 years, with €1.7 billion being invested into competitors outside the region, it is obvious there is no policy appetite, with or without the proposed technological university, to address the region’s educational needs.

In a section dealing with social inclusion and health, the authors say that on a ‘per citizen basis’, the South East regional service costs 33 per cent less, had 47 per cent less staff and 41 per cent less beds than the most resourced provider.

‘This suggests that the South East’s Model 4 Hospital (Waterford Regional) is either hyper-efficient ot has poorer medical outcomes.’

The region has the third highest rate on two of the CSO measures (at risk or poverty and consistent poverty) and has the fourth highest in terms of deprivation index.

‘If these, the most important measure is deprivation (which measures absolute poverty over such things as not being able to afford a winter coast or to eat meat) and we can see meaningful national and regional progress. Improved social welface payments and employment of any quality greatly impact this measure, and we can see the improving macro-economy is now feeding through..

While car sales - a bellwether for consumer sentiment - show continued strong regional sales, a low rate of VAT returns from the region indicates the region has very low consumer spending activity.

‘High unemployment, low job quality and and spending directed outside the region, leads to much lower levels of consumption.’