Irish Austerity Exodus Continues
The Eurozone experiment in austerity continues to fail as the peripheral countries endure ongoing cuts. Following up on my post of August 15, it’s time to look at the most recent Irish immigration data to update it through April 2013 (Ireland records population data from May 1 to April 30) and see how it affects the reported unemployment rate. The picture remains ugly, with emigration climbing once again, from 87,100 in 2011-2012 to 89,000 in 2012-13. Immigration increased by 3200, so net emigration fell by 1300, with net out-migration over the year declining by about 3% to 33,100. Here are the details:
|April 2012||April 2013|
|of which Irish nationals||-25,900||-35,200|
Source: Central Statistics Office Ireland
Take a good look at the last line: Net emigration by the Irish themselves increased by 35.9% and accounts for all net out-migration; there was net in-migration by non-Irish citizens of 2100 in 2012-13. Indeed, the Irish comprised 57.2% of all emigrants in the most recent report.
What was the effect of emigration on the unemployment rate? Once again in 2013, people in the age group closest to what we would consider prime-age workers (15-64, given how Ireland reports immigration by age groups; see Table 4 of the linked report) left the country at a higher rate than children and seniors, with total out-migration for those 15-64 of 35,300. That brings total out-migration for population years 2010-2013 to 126,000.
Since April 2013 data is a much better match for Ireland’s official first-quarter 2013 unemployment data than April 2012 was, I am going to repeat my calculation from August, still using Q1 2013 unemployment of 13.7% as my base. Again, there were 292,000 officially unemployed in the first quarter; dividing by 0.137 gives an estimated workforce of 2,131,387. We now add 126,000 to numerator and denominator to get the maximum potential unemployment rate, which would exist if all 126,000 were in the labor force and unemployed: 418,000/2,257,387, or 18.5%.
Even if we add in only those in the most prime working-age group in the Irish statistics, those from 25 to 44 years old, we still find that the imputed unemployment rate exceeds the country’s maximum during this crisis of 15.1%. 2013’s 12,500 net out-migration in this age group brings the 2010-2013 total to 48,500; adding this to the numerator and denominator gives us 340,500/2,179,887 or 15.6%.
Paul Krugman points out that we can also see this by looking at Ireland’s employment rate. Over 2.1 million were employed in the third quarter of 2007; in the second quarter of 2013, the number is still far depressed at 1,869,900, which represents a 1.8% increase from a year earlier.
Finally, the overall picture for the EU and the eurozone has deteriorated over the previous year: EU unemployment rose from 10.6% in August 2012 to 10.9% in August 2013 (most recent month available), while eurozone unemployment rose from 11.5% in August 2012 to 12.0% in August 2013. Both figures were down a hair from several months earlier. But in Greece, new records continue to be set, with unemployment in June 2013 (most recent month available) hitting 27.9%. By contrast, as Eurostat shows, unemployment has steadily declined in the United States and Japan.
Unfortunately and unsurprisingly, the evidence that austerity has failed in Europe still is not affecting EU policy, nor has it stopped the cacophony of voices in the United States calling for more austerity. While Republicans supposedly “lost” the government shutdown crisis, they succeeded in locking in sequester-level government spending until the next crisis, and sequester II will be here soon. God help us.
Cross-posted from Middle Class Political Economist.
Austerity is the most ridiculously wrong policy after a debt crisis. Take Greece. How on Earth does the Troika expect to reduce the debt-to-GDP ratio with policies that have depressed GDP to the tune of 40%? Not to mention the human suffering involved, which was never in their little minds, of course.
Debt overloads are best resolved by defaulting. The lender is just as guilty as the borrower. But hey, that would “destabilize” the “Financial system”. Time to restructure debts and for the ECB for finally do its job and support Greece, Ireland, Spain, etc.
Worth noting that Spain or Ireland did NOT, until the beginning of the crisis have any sort of public debt problem at all. The fact that they had to take on bank debt onto their balance did, though. Not only is this policy wrongheaded, it’s counterproductive and destructive. But our dear leaders in Berlin and Brussels, and their puppetmasters in Frankfurt never flinched at the prospect of making life miserable for millions of people for the slim chance they might be able to clean up their balance sheets. It’s disgusting.
I had a few discussions with some of my German counterparts and bosses on this issue. I admire the German ability to be frugal; but, the imposing of such a mentality and policy at the expense of a population to rescue banks and firms sucked in by TBTF and the Goldman Sachs of the world is beyond belief.
At the Stuttgart October Fest drinking litres of beer I got into a discussion with a couple of Irish nationals. The amount of money needed to rescue Ireland from crisis was miniscule compared to what we piss away in the US. We have state pension plans which need to be rescued at similar costs. Detroit requires ~$19 billion to rescue it from a legal and economic imposed Warsaw walled-ghetto mentality. I offered to write the Irish a check in a tongue-in-cheek fashion. Holding countries captive to an austerity which the IMF finally fessed up to as not working is no reason to plunge the global population into a global recession.
My German VP boss of Purchasing did not grasp the significance of an austerity imposed punishment upon peoples for an obvious government backed business and capital led gambling binge.