Jobs losses are only tip of the iceberg
LEGACY economic issues, IDA neglect and overexposure to the retail and hospitality sectors mean Co Wexford will need massive State supports to weather the post-Covid lockdown world.
This is the view of Dr Ray Griffin, a lecturer in Strategy at Waterford Institute of Technology School of Business teaching on WIT’s MBA and DBA programmes.
Dr Griffin said: ‘It’s very, very dark in Wexford. There is no sugar-coating it. The total income per person in Co Wexford in 2008 was €27,507. In 2017 it was €23,906. That shows the scale at which Wexford has not recovered even from the last recession. High unemployment is the most visible manifestation of this and Wexford has high unemployment. We know in quarter four 2019 national unemployment was at 4.5 per cent, in the south east it was 6.8 per cent.’
He said a bigger, more lasting economic fact-of-life in Wexford is the lack of good quality jobs. ‘Wexford is by far the worst for IDA jobs. Kilkenny, Waterford and Carlow are not stealing Wexford jobs. It’s across the south east we don’t have these, Wexford is just a little bit worse.
It’s 20 years of political failure is what this is. In 1980 the south east was the second richest region in the country hemmed up by agriculture and a vibrant indigenous commercial sector. Albatros in New Ross was a very significant employer, for instance, and there were other strong indigenous businesses which have all gone to the wall and we didn’t replace them. In the rest of the country when this happened they were replaced by IDA jobs. These jobs pay out €66,000 a year on average. Compare that with €23,000 in Wexford.’
Accounting for 3.1 per cent of the country’s population, Wexford should have 3.1 per cent of IDA jobs, he says. ‘That would be 7,500 jobs and we only have 3,100. There are 4,500 jobs lost. If we had that payroll it would be an additional €300m a year into the Wexford economy.’
There were 541 IDA visits last year in the first nine months, four of those were in Wexford.
‘Last year the IDA added 14,000 new jobs and the net jobs [in Wexford] were 23. It should have been 430. Whatever the IDA are doing it’s not working.’
The lack of availability of higher education options in the region is another factor in the county’s poor economy, Mr Griffin argues.
‘Higher education is something we can’t crack in this region. North and South Korea will unite before Carlow and Waterford ITs do to form a technological university. We are 20 years after IT Carlow set up in Wexford and nobody is looking at that as the solution. 4,800 Wexford people go to higher education and around 50 per cent go to Dublin. If you are in Gorey you can go there an commute, but it’s hard work, but the others are all moving to Dublin, so Wexford is losing its young and Wexford is never going to thrive with that kind of blood loss.’
He said Wexford County Council’s plans to spend €250m on capital projects is ‘chickenfeed’ compared to the spend required for Co Wexford.
‘It’s incredible leadership from Tom Enright and his crew with zero back-up from Dublin. The global crisis has a fixed life. It’s incredibly unhelpful for Wexford because walking into the programme for government talks in the absence of Covid, Wexford and the south east were among the things top of the list. The south east let an absolute roar out of it in the election to Dublin about how unhappy they are with the service they have gotten from Dublin. The risk for Tom Enright is he puts his neck on the line, businesspeople in Wexford put their capital on the line and without the big guns from Dublin coming in with 3.1 per cent of the pie it may not work.’
Prof Griffin said the region’s counties have been playing beggar my neighbour games while the south east economy has been burning.
‘We have been playing that beggar my neighbour game within the region for the last 20 years and it has carved us up into poverty.’
The tourism and the hospitality sector in the county is most at risk, he said.
Figures show that hospitality and construction workers are most affected by the health crisis.
‘70 per cent of hospitality workers and 50 per cent of construction are taking the payment. They are the two worst sectors. Hospitality nationally has 140,000 people working out of out full time. We think it will be the slowest sector to recover due to social distancing so Wexford is very exposed to that sector. That is really worrying.’
He said SMEs are also very exposed. ‘IBEQ has told us about businesses where the turnover has dropped by over 100 per cent, and yet they are still experiencing about 30 per cent of their costs, insurance, rent, light and heat, stock that they can’t get out of, so our SME sector is in serious difficulty. Wexford has more SMEs than large employers so the county is over exposed to SMEs so you’d hope something is there to support those business owners so they can come back strongly.’
He said all of these business owners need to be awake, and managing their costs aggressively.
‘There is a survey in the UK that suggests that as many as 20 per cent of SMEs might go to the wall in the UK. We need our businesses strong so we need less money to restart the economy after this.
‘My sense is agriculture will be OK, as will construction which will still continue to grow once the window of closedown is over but arts, tourism, hospitality, retail will all be impacted.’
The development of the road network in the region will also help, he said. ‘There has been a €1.9bn spend on the road network in the south east in recent years between new motorways on the M11, the M9 and the Enniscorthy and New Ross bypasses to bring people from Wexford, people from Kilkenny and people from Waterford to regional services that will be located on the edge of that motorway, healthcare, cultural, educational services.’
He said the Government has done a stunning job, praising the speed at which Government has moved. Prof Griffin said the interim Government has been incredibly impressive, adding that financial supports for out of work Wexford people can continue to be funded due to the strong economic footing the country was on prior to the coronavirus crisis. ‘We were very strong coming into this so I have no worries about our ability to fund this. The OECD reckons Ireland will be the least affected country. They are projecting we will have a 15 per cent decline, whereas other countries will be over 20 per cent. We will be able to fund this through borrowing with the ECB.’
The concern remains for the economic growth of the county going forward. ‘We had gotten our voice to the programme for government. Wexford was on the list. Everyone was talking about regional equality. Now Dublin and Cork are going to try to protect themselves because they are in recession now. The South East economy declined in 2017 by 4.5 per cent and there wasn’t a whimper in the national media about this. The recovery did not happen here.’
He is urging TDs to only ask for substantial things that are going to move the needle so no more projects that aren’t going to work. ‘Stop asking for crazy!’