Ignore the doomsayers – there is little evidence of robots taking over our jobs
‘IRELAND is the fastest growing economy in Europe.” How many times has this been said by government politicians over the past few years? More than anyone could count would be my guess.
While the economy has been doing very well, and is now in its seventh year of uninterrupted growth, it has not been the continent’s top performer in the metrics that matter. They include pay growth, which has only recently started picking up, and the clip at which the Government coffers have been filling. Many other European countries have been doing better than Ireland by these indicators of expansion.
By far the most important measure of what is going on in the economy is jobs. The most recent figures – for the middle of last year – show that Ireland fell well down the European growth league table. Just as employment growth across the continent accelerated last year, it slowed in Ireland, according to new figures published on Tuesday.
In the six months to early autumn, the economy added just 15,000 jobs (when seasonal ups and downs are excluded by the statisticians). That was a marked slowdown – there have been times over the past half-decade when as many jobs were being added to the national total in six weeks.
So if this week’s numbers on employment growth were not so hot, is there cause to worry about the economy cooling?
The short answer is no. Nearly all other indicators on the economy’s dashboard point to solid growth over the course of last year. There is still a lot of momentum in the economy, and with strong growth in continental Europe and the US, and the British economy doing reasonably well (despite the uncertainties of Brexit), the outlook for 2018 is pretty rosy. Provided financial markets don’t crash and world leaders don’t do dumb things, the Irish, European and global economies are shaping up to have another good year.
So what explains the sluggish growth in Irish employment in the middle of last year? The answer to that may be more to do with the way jobs are counted than with any weakness in the economy (there have been some big changes in the way the State’s statisticians collect and collate jobs numbers).
As mentioned above, the economy has been in rude health lately. More specifically, other figures that relate to jobs don’t point to a slowdown in employment or labour force growth last year. Those figures include the amount of income tax collected, new PPS numbers issued and the number of foreign work permits granted last year.
If there is some doubt about the reliability of the recent jobs figures, looking at the same figures over a longer sweep of time gives less cause for eyebrow-raising. Many of the consistent trends they show are positive.
Among the best is that the much talked about “end of work” thesis continues to be shown up as bunkum. Despite jobs being shed every day, as companies retrench and go out of business, the number of new jobs being created continues to exceed losses. As of the July-September period last year, there were a third of a million more people working in the State than at the post-recessionary low ebb six years earlier.
It is true that we are still around six months away from the all-time peak recorded exactly a decade ago (provided growth continues this year), but that peak was inflated by bubble-era construction jobs. If the building industry is excluded, Irish employment is already well above the highs of a decade ago and higher than it has ever been in the history of the State.
While those who foretell of doom in the workplace, owing to robots and artificial intelligence and low foreign wages, keep getting it wrong, the rebound in the jobs market is not all about clever young things starting up their own new high tech companies, as some of the technology ultra-optimists would have it. Much of the jobs growth since the recovery began has been in old-fashioned sectors.
Irish industry, which includes manufacturing and activities such as energy generation, has added more than 50,000 workers to its collective payroll over the past half decade. These gains show that the effects of technological advances, which lead to ever fewer workers being needed to make a microchip or a wind turbine, can be offset given enough innovation and strong demand. Modern economies need not be in a perpetual state of “deindustrialisation”.
Nor do the trends give those who talk of ever more precarious work much to bolster their case.
The vast majority of people at work continue to be employed on a full-time basis. In the decade before the crash, around one in five workers was part-time. That did rise considerably during the recession but it has been falling back towards the 4:1 ratio over the past five years.
More telling is whether someone is working part-time because it suits that person, or because he/she can’t get as many hours as desirable. A decade ago, one in 20 people at work were “underemployed” part-timers. That proportion doubled during the recession. As of last year, it had fallen back to one in 20.
There is no end of talk of robots replacing workers en masse and of increased precariousness at work. There is a lot less evidence to support either contention. All the evidence from this week’s Irish Labour Force Survey points in the opposite direction.
Despite jobs being shed every day, as companies retrench and go out of business, the number of new jobs being created continues to exceed losses