Home > Uncategorized > UPDATE: EMPLOYMENT GROWTH-IS IT REAL?

UPDATE: EMPLOYMENT GROWTH-IS IT REAL?

Update Sept 05, 2014

 The 64,170 on “activation schemes” are counted as employed and are removed from unemployment figures in official CSO figures. These are not paid by the employer but paid out of state funds. They do not have the legal status of employees.

http://www.cso.ie/en/releasesandpublications/er/lr/liveregisteraugust2014/#.VAmOmcJdW-k

There were 64,170 people availing of these programmes in Jul 2014, which is an increase of 524 (0.8%) from the previous year, when there were 63,646 people in activation programmes-CSO

24 People Unemployed for Each job Vacancy in Ireland-Nevin Economic Research Institute- The ratio of unemployed people to job vacancies is a measure of the extent of labour market tightness—the higher the ratio, the less opportunity unemployed individuals have to find employment. The current rate in Ireland is 24 people for every job vacancy available.

The ratio in Germany is approximately 2!

http://www.nerinstitute.net/blog/2014/09/02/latest-data-on-the-vacancy-rate/

UPDATE August 26, 2014

The employment figures for Quarter 2 (1/04–31/06/2014) have just been issued by CSO. (See Summary Below)
The official view is that employment is continuing to increase but at a slower rate than in the previous two quarters. The fact that there are approximately 8000 people less working now than there were 6 months ago is not mentioned. Officialdom would argue that this Figure is not seasonally adjusted. I explain below that seasonally adjusted figures are unreliable.
There were no satisfactory answers at the press conference to my queries in relation to the unusually strong continuing increases in self-employment. Indeed, the fact that the very large increase in numbers is confined to self-employed WITH NO EMPLOYEES(see figures below), lends credence to my contention that the figures for employment are being artificially inflated by recategorisation of unemployed as self-employed when they exhaust entitlement to benefit and are ineligible for means tested job seekers allowance. The smaller increase in self employment in the recent two quarters also gives credence to my contention that the huge increase in 2013 was partly due to a temporary “Cow House Effect” (See article below) Replies to my questions clearly indicate that the vast majority of self-employed are categorised as full time employees even if they get little business. This inflates the figures for full time employment and full time equivalents (FTE)
Because the most recent census figures are being applied incrementally to the survey figures, CHANGES OVER TIME, SEASONALLY ADJUSTED and SECTORAL figures, are particularly unreliable.
This factor will not have been “washed out” of the system until 2015.
In fairness, CSO staff have offered to go through the self-employed data with me and I intend to take up the offer.

As usual, the unreliability of some figures and the inflation of others has not deterred Ministers Bruton and Noonan from “spinning” the figures to show that there policies are working.
On the previous day, CSO published the Earnings and Labour Costs Survey which showed that, on average, employees were working longer hours for less pay.
However Jimmy Kelly, Gen SEC of UNITE THE UNION has said: “There has been a collapse in job creation while earnings are also falling.This week’s figures confirm what working people have long suspected: recovery is a myth which is not being felt in their pockets. On the contrary, just 5,500 (Seasonally Adjusted-PH) jobs were created during the first six month of this year. That amounts to a paltry 212 jobs per week at a time when around 1,500 adults have been emigrating each week”

As I have pointed out above the actual numbers in employment are 8000 down over 6 months. ALL THESE CHANGES ARE A VERY SMALL PERCENTAGE OF THE 1.9 Million in employment including self employment. THEY SHOULD BE TREATED WITH CAUTION
THE CSO SURVEY SAMPLE SIZE is approximately 20,000 and the total number in employment is approximately 1.9 MILLION. On that basis the uncertainty on the total figure in employment is approximately + or – 13,000 and the uncertainty on a change or difference between two figures is

+ or – 26,000

QNHS Q2 2014 CSO August 26,2014

http://www.cso.ie/en/releasesandpublications/er/qnhs/quarter

lynationalhouseholdsurveyquarter22014/#.U_2wfMVdW-k

EXTRACT Table 5 Persons aged 15 years and over in employment (ILO) classified by employment status ‘000
Q2 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14
{All persons (male+female)-not seasonally adjusted}

TOTAL PERSONS IN EMPLOYMENT

1,836 1848 1,845 1,870 1,899 1,910 1,888 1,902

OF WHICH
Self employed (with paid employees)
88.1 83.6 88.2 86.8 84.7 88.4 87.2 89.0
Self employed (with no paid employees)
204.2 207.5 215.3 217.0 225.2 236.1 231.1 226.7
Total Self employed 292.3 291.1 303.4 303.8 309.9 324.5 318.4 315.7
Employees 1,531 1,543 1,527 1,551 1,574 1,571 1,555 1,572
Assisting relative 12.6 14.7 14.9 15.3 15.7 13.9 14.3 13.8
Total Persons in Employment 1,836 1848 1,845 1,870 1,899 1,910 1,888 1,902

CHANGES In PAST YEAR Q2 2013 to Q2 2014 ‘000
Self Employed with Employees +2.2
Self Employed no employees +9.7

Total Self-employed +11.9
Total Employees +21.2
Assisting Relatives -1.5
Total Persons in employment +31.7

CHANGES IN Calendar Year 2013 ‘000
Q4 2012 to Q4 2013
Self employed With employees +4.8
Self Employed No employees +28.6
Total Self employed +33.4
Total employees 1571.4-1543.1 +28.3
Assisting Relatives -0.8
Total in employment + 60.9

Employment Growth-Is it Real?

Government is claiming a significant rise in employment in the year 2013. This is buttressed by Central Statistics Office  figures showing an increase in numbers in employment of approximately 60,000.

But does this mean an increase in the amount or quantum of employment.

There is no question that when a very large sample of the population were asked  if they were in employment, the replies indicated that there was an increase of 60,000 in those in  employment including the self-employed.

But the increase in the number of self-employed within this figure was approximately 30,000.(The smaller     numbers in the IT article below are for the year to March 31,2014) This increase is 3.5 times the increase in the number of self employed as occurred at the height of the boom. There was virtually no growth in the Irish economy (GDP+0.3%) in 2013. There was actually a contraction in the non-multinational sector which impacts on  self-empoyment

There is reason to believe (see UK study below) that the increase in self-employment may simply mean a larger number of self-employed sharing the same or a smaller amount of work.

Possible reasons for this are:

When some employees exhaust their jobseekers benefit , they may not  be entitled to a means tested alowance because they have a working spouse or some savings. They then designate themselves as self-employed in search of some income. It also appears that the vast majority of self-employed are automatically

designated as in full time employment. This distorts the numbers in full time employment. (See Irish Times

article below)

 

Self-Employed people are working to a higher age because of the collapse of pension related investments and austerity generally. The numbering entering self-employment is increasing and the number exiting is decreasing.

Because of the removal of milk quotas there was widespread extension of milk-parlours and other farm buildings in 2013. This may have temporarily increased the number of self-employed construction workers. The increase in self-employment in the year to  March 31, 2014 was down to 15,000 approx . This may reflect the completion of the agricultural work.

I have asked CSO to investigate this matter without success to date

IRISH TIMES—–CSO job figures come with a health warning

Questions over the self-employed and agriculture cast doubt on last year’s increase

Paddy Healy: queried whether the rise in the numbers employed was as strong over the past year as the CSO’s figures suggested. Photograph: Dara Mac Dónaill/The Irish Times

  • From Irish Times   June 2014
  • Cantillon

The latest CSO figures from the Quarterly National Household Survey are disappointing as they may indicate the boom in employment growth is running out of puff. We shall see. One quarter’s figure does not a summer make, so to speak.

There is another aspect to the debate, however. The QNHS figure on employment is supposed to be a key, reliable figure on which observers of the economy can base their opinions. However, there has been a difficulty over recent times because of a change in the way the figure for the agricultural sector is collected and the CSO figures for agriculture come, therefore, with an associated warning.

Yesterday Paddy Healy brother of the Workers and Unemployed Action Group TD, Seamus, was among those attending the CSO’s presentation of its figures, and queried whether the rise in the numbers employed was as strong over the past year as the agency’s figures suggested.

He wondered whether, because their social welfare benefit had run out, and other reasons, people were being designated as self-employed when in fact there was little work for them to do. In other words, the rise in the amount of work being done might not be equal to the growth in the numbers being designated as employed.

The numbers employed in agriculture increased by 14.9 per cent, or 14,400, in the year to the end of the first quarter. (Professional and scientific activities were up 11,800 and accommodation and food services were up 13,500, while wholesale and retail trade were down 5,900, financial, insurance and real estate were down 1,900, and human health and social work were down 3,200.)

The number of self-employed people was up 14,900, or 4.9 per cent, over the year, while the number of employees was up 28,300, or 1.9 per cent. (Public-sector employment was down 2,500 over the year.)

The CSO statisticians said in response to Healy that there was a correlation between the rising numbers in agriculture,and the rise in the numbers self-employed, and that one would expect this for the sector. But given the health warning that comes with the agriculture figures, this could leave room for lingering worry.

Another notable aspect of yesterday’s figures was that while full-time employment was up 3.3 per cent over the year, part-time employment was down 0.8 per cent. Perhaps the latter was due to the fragile performance of the retail sector.

Self-employed workers earn 40% less than employees

By Brian Groom, Business and Employment Editor   Financial Times    May? 2014

The typical self-employed worker earns 40 per cent less than an employee, according to research pointing to complex reasons behind the UK’s rapid growth in self-employment.

Earnings of the self-employed dropped by 20 per cent between 2007 and 2012 while those in salaried jobs saw their weekly pay fall by 6 per cent on average, said a study by the Resolution Foundation think-tank.

Part of the pay drop for the self-employed was down to reduced hours and part was likely to be due to a shift in composition, such as more women.

Despite this pay gap, the report suggests widespread self-employment is becoming a fixture of the UK labour market and that recent growth cannot simply be explained by workers settling for “second best” during the downturn.

Self-employment has grown since the early 2000s and now accounts for 4.5m workers, one in seven of the workforce. A survey by Ipsos MORI for the report found that 73 per cent of those who have become self-employed in the last five years said doing so was mainly or partly their personal preference, though a growing minority said it was due to a lack of better work alternatives.

The report said the growth was explained both by structural changes in the labour force and the cyclical effect of the long downturn. More people are entering self-employment and fewer are exiting.

The numbers have been swelled by older workers postponing retirement, probably due in part to low levels of pension savings and longer life expectancy. Proportionally, part-time work has risen among older self-employed workers while it has fallen among older employees.

The self-employed are slightly more likely to be underemployed than those with jobs, a reversal in the situation before the downturn when self-employed people were far more likely to be over-employed.

One in three of the self-employed described themselves as “entrepreneurs”; 83 per cent said they preferred to work for themselves, while 17 per cent would rather be an employee. Semi-skilled and unskilled workers were more likely to say they would prefer to be an employee.

Growth in self-employment has far outstripped the growth in employed jobs in the UK since the start of the recession. Between 2008 (March-May) and February 2014, self-employment grew by 666,000 while employees increased by 133,000.

Self-employment is still male-dominated but women are making up a greater proportion – rising from 27 per cent to 30 per cent, or from 970,000 to 1.29m, between 2005 and 2013. The gender composition of employees has not changed.

Gavin Kelly, Resolution Foundation chief executive, said: “The growth in self-employment over recent years has been astonishing – but the reasons for it are complex.

“Some of it can be explained by a workforce that is getting older and putting off retirement for longer, some of it may be down to our growing appetite for being our own boss, and clearly much of it is due to weakness in the jobs market meaning there are fewer other options.

“Whatever the cause, self-employment is often a highly precarious existence which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy makers have some catching up to do.”

Self-employed workers earn 40% less than employees

By Brian Groom, Business and Employment Editor   Financial Times    May? 2014

The typical self-employed worker earns 40 per cent less than an employee, according to research pointing to complex reasons behind the UK’s rapid growth in self-employment.

Earnings of the self-employed dropped by 20 per cent between 2007 and 2012 while those in salaried jobs saw their weekly pay fall by 6 per cent on average, said a study by the Resolution Foundation think-tank.

Part of the pay drop for the self-employed was down to reduced hours and part was likely to be due to a shift in composition, such as more women.

Despite this pay gap, the report suggests widespread self-employment is becoming a fixture of the UK labour market and that recent growth cannot simply be explained by workers settling for “second best” during the downturn.

Self-employment has grown since the early 2000s and now accounts for 4.5m workers, one in seven of the workforce. A survey by Ipsos MORI for the report found that 73 per cent of those who have become self-employed in the last five years said doing so was mainly or partly their personal preference, though a growing minority said it was due to a lack of better work alternatives.

The report said the growth was explained both by structural changes in the labour force and the cyclical effect of the long downturn. More people are entering self-employment and fewer are exiting.

The numbers have been swelled by older workers postponing retirement, probably due in part to low levels of pension savings and longer life expectancy. Proportionally, part-time work has risen among older self-employed workers while it has fallen among older employees.

The self-employed are slightly more likely to be underemployed than those with jobs, a reversal in the situation before the downturn when self-employed people were far more likely to be over-employed.

One in three of the self-employed described themselves as “entrepreneurs”; 83 per cent said they preferred to work for themselves, while 17 per cent would rather be an employee. Semi-skilled and unskilled workers were more likely to say they would prefer to be an employee.

Growth in self-employment has far outstripped the growth in employed jobs in the UK since the start of the recession. Between 2008 (March-May) and February 2014, self-employment grew by 666,000 while employees increased by 133,000.

Self-employment is still male-dominated but women are making up a greater proportion – rising from 27 per cent to 30 per cent, or from 970,000 to 1.29m, between 2005 and 2013. The gender composition of employees has not changed.

Gavin Kelly, Resolution Foundation chief executive, said: “The growth in self-employment over recent years has been astonishing – but the reasons for it are complex.

“Some of it can be explained by a workforce that is getting older and putting off retirement for longer, some of it may be down to our growing appetite for being our own boss, and clearly much of it is due to weakness in the jobs market meaning there are fewer other options.

“Whatever the cause, self-employment is often a highly precarious existence which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy makers have some catching up to do.”

 

Growth of Self-Employment in UK

Resolution Foundation Think Tank——Financial Times   By Brian Groom, Business and Employment Editor   Financial Times    May  2014

 Self-employed workers earn 40% less than employees  in UK

Gavin Kelly, Resolution Foundation chief executive, said: “The growth in self-employment over recent years has been astonishing – but the reasons for it are complex.

“Some of it can be explained by a workforce that is getting older and putting off retirement for longer, some of it may be down to our growing appetite for being our own boss, and clearly much of it is due to weakness in the jobs market meaning there are fewer other options.

“Whatever the cause, self-employment is often a highly precarious existence which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy makers have some catching up to do.”

 

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