IBEC warns of negative effect of more taxes on employment

Monday 22 April 2013 11.56
IBEC jobs report says unemployment will remain ''stubbornly high'' until 2014
IBEC jobs report says unemployment will remain ''stubbornly high'' until 2014

Employers group IBEC said last year saw the Irish labour market's first annual increase in employment since 2008.

In its first IBEC jobs report of 2013, the group said that unemployment is set to decline somewhat this year but will remain ''stubbornly high'' until 2014.

The report examines the various national employment statistics, data from IBEC surveys and job announcements to provide an overview of employment trends.

It found that unemployment fell by 19,200 or 6.1% in the year to the last quarter of 2012, with the total number of unemployed stood at 294,600.

However it points out that a fall of 18,000 in the labour force was the main reason for this due to emigration and people giving up on looking for a job.

The report also found that the numbers in long-term unemployment fell by 10% but still remains at around 60% of total unemployment.

IBEC said that the private sector was a net contributor to job growth last year. There was a 2.3% fall in numbers working in the public sector over the last year, while employment in the private sector rose by almost 1%.

A number of sectors added jobs last year, with the IT industry seeing a 7.1% increase in jobs, while the agriculture, forestry and fishing sector saw a 12.1% improvement and jobs in the technical and scientific areas increased by 6.2%.

But employment fell in industry - down 3%, while construction declined by 4.3% and the transport industry eased by 3.9%.

Commenting on the survey, IBEC's chief economist Fergal O'Brien said that it is crucial that positive employment trends are not undermined by tax increases.

''Any further increase would make work less attractive, undermine the ability of companies to invest and create new jobs and damage hard-won competitiveness gains of recent years. Ireland's marginal income tax rate is already too high - the next change will have to be downwards,'' he added.

The economist said that while it is positive to see that the country's unemployment rate has dropped back, it is worrying that this is mainly due to a decrease in the labour force.

''It is essential that we give hope to young jobs seekers, in particular, and also ensure that we keep people as close as possible to the workplace through training and upskilling programmes. Economic recovery will be dependent on our skills pool and we must do everything possible to retain those skills in Ireland and to help the unemployed to upskill, " Mr O'Brien said.