Covid-19, the Welfare State & Activation Policy Dr. Dermot Coates & Jeff Dwan O’Reilly IGEES & Department of Employment Affairs & Social Protection 17 th September 2020 14:05 – 15:20
Part 1: Expanding the footprint of the PES / Welfare State in response to Covid-19 Pandemic.
The Pre-COVID World… Prior to the onset of the pandemic, Ireland had made significant strides in it’s economic recovery. By Q4 2019: • Over 2.3 million people were in employment – the highest level in the history of the state. • Unemployment was at 4.7 percent, almost “full employment”. • This had been the 30 th quarter in succession where unemployment had declined on an annual basis. 3 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
The Onset of the Pandemic The pandemic was an abrupt & adverse shock to the economy. With many sectors and activities forced to close in line with public health restrictions, COVID adjusted unemployment peaked at 28.2 percent in April. DEASP acted quickly to introduce emergency income supports to assist displaced workers. By the end of April, over 1.1 million people were in receipt of State supports, either via the LR, PUP or the TWSS. 4 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
The Onset of the Pandemic … cont’d … A Working Paper, entitled “ The Initial Impacts of the COVID-19 Pandemic on Ireland’s Labour Market ”, was published on May 5th by DEASP, prepared in collaboration with the Central Bank of Ireland for consideration by the Labour Market Advisory Council. This paper found that in the initial weeks of the pandemic: • On the basis of jobs lost (or displaced), the most severely impacted sectors are Tourism, Hospitality and Food Services; Retail; and Construction. • Those who had lost their jobs were more likely to be young, low-skilled and previously in part- time employment, than the population average - reflecting the higher share of these workers in the sectors most affected (Retail and Hospitality). • In examining the financial position of households, those previously employed in sectors where the fall in employment is at least 25 per cent hold 2.4 per cent of their income as financial buffers, less than two weeks of gross income. 5 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
The Impacts of Reopening July’s Covid-19 Adjusted Unemployment Rate was 16.7 percent, down from 23.1 percent in June. There are now 219,900 people in receipt of the PUP (Sept 8th), 63% reduction from the May 5th peak. Momentum in ‘outflows’ / ‘claims closed’ is anchored to reopening phases. The majority of outflow activity in sectors is during (and sometimes immediately prior Note : For PUP claims closed, there is a time lag (approximately 10 days) between to) their given reopening notification to DEASP and being reflected in the stock data. phase. Data source: DEASP, CSO and Revenue Data 6 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Proportion of employees by sector on State schemes 7 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Throughput of Enhanced Illness Benefit Number of people medically certified for receipt of Enhanced Illness Benefit – Cumulative, by gender and age group 8 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Part 2: Changing Structures / Policy frameworks .
The Labour Market Advisory Council (LMAC) The LMAC was appointed by the Minister for Employment Affairs and Social Protection in early 2020. First task: develop proposals to tackle the labour market challenges arising from the pandemic. A Policy Paper, “ Preparing for Economic Recovery ”, was published in June. The Council’s recommendations included: • Enhanced employer incentives and subsidies, by tailoring and expanding the existing JobsPlus programme. • Adapting and enhancing the existing short-time work support scheme (STWS). • Further collaboration with FET and education providers, aligning labour market programmes with upskilling and re-skilling . • Increasing the number of places available on funded work placements and that they are linked to education and training. 10 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Forthcoming Policy Frameworks • ‘Pathways to Work’ (2020 – 2025) , is Ireland’s national employment services strategy and represents the Government’s overall framework for activation and employment support policy. • Pathways to Work will seek to: 1. Continue the goal of ensuring that as many jobs as possible go to those unemployed through the provision of a quality Public Employment Service (PES), 2. Ensure better labour market outcomes are achievable for all groups in Ireland’s society, 3. Ensure our labour force is well positioned to respond to future economic challenges and developments. • Building on the July Stimulus, the ‘National Economic Plan’ , represents Ireland’s long-term approach to sustainably restoring employment in the wake of Covid-19. • The key levers to be used under the NEP include: Education, training, and reskilling, Investment and stimulus, Enterprise policy, Business financing and Regulation and costs. 11 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Part 3: The Changing Delivery of PES Activation Support.
Adaptation of PES Engagement Model • During the current Covid-19 Living with Covid-19 Pre-Covid 19 environment, the provision of employment support and Jobseeker had face-to-face Case Officers to make activation services by the PES meeting with a Case Officer. preliminary contact with (Intreo) must be adaptable to jobseekers through meet demand. phone and other digital channels • Services must comply with Online Information video social distancing requirements (non-interactive) and public health guidelines. Face-to-face meetings to • Increased utilization of new be reintroduced over time modes of service delivery in line with health over time. guidelines Digital augmentation to complement standard approach.
Considerations for Digital Engagement Model • The PES continues to explore the development and implementation of different channels of service provision to customers according to their needs and circumstances. • This type of blended services provision may include a multichannel marketing/promotion strategy, based on well-functioning technologies and reliable back-up support. • Among the benefits of this self-service, multi-channel engagement model is that it will allow for greater focus by Case Officers on providing in depth one-to-one support for those jobseekers most distant from the labour market. • The PES is however, also cognisant of a number of potential issues associated with digital service delivery, such as: 1. Broadband access is not equally available across the country, 2. Digital literacy levels of customers will vary. • These issues will need to be addressed with our partners so as to facilitate appropriate digital service delivery and access to all. 14 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
Annex: From Peak to Present and the July Stimulus
From Peak to Present: PUP Stock and Flows Economic re-opening has resulted in strong outflows from the PUP as individuals return to work. Since its peak on May 5th, the stock of PUP recipients has fallen by c.63 per cent to c.219,900 as at September 8th. However, comprising the PUP stock changes is an underlying weekly churn, whereby new claims are opened and put into payment, and existing recipients close their claim. Data source : DEASP 16 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
From Peak to Present: County Analysis Counties with the highest absolute number of PUP recipients in May have consequently seen the highest number of claim closures. Overall, counties have maintained their proportional share of total PUP recipients reflecting a nation- wide recovery. However, Dublin’s overall share has increased by c.6 per cent to 35 per cent of total. Concentration of certain activities and industries (aviation, etc.) as of yet unviable to return fully are possible causes. Data source : DEASP 17 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
From Peak to Present: Sectoral Analysis Those sectors worst hit by the pandemic and associated containment measures have seen the strongest recovery, in absolute terms, since the economy has begun to reopen. Construction has seen the largest reduction falling by c.79 per cent from peak. Moreover, its share of total PUP recipients has reduced to 7.6 per cent compared to c.13 per cent at peak. The majority of outflow activity in sectors has been during their given reopening phase. Data source : DEASP 18 An Roinn Gnóthaí Fostaíochta agus Coimirce Sóisialaí | Department of Employment Affairs and Social Protection
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