Labour Market Initiatives in Ireland

I mentioned the details of the Work Placement Programme (and pilot Short Time Working Training Programme) last month. And further information about labour market policy in Ireland. As well as the IBEC graduate internship scheme.

These are separate initiatives to the Employment Subsidy Scheme. This scheme is outlined here on the website of the Dept. of Enterprise, Trade and Employment. And discussed here in an article from the Irish Times, earlier this month. The scheme is managed by Enterprise Ireland; but it is a separate initiative to the Enterprise Stabilisation Fund.

The Employment Subsidy Scheme was originally intended to support the retention of jobs in viable exporting enterprises that might otherwise be made redundant. The scheme has been extended to non-exporting companies; and over 7,000 jobs are to receive direct financial support in the first round. According to the Irish Times, it is hoped that 27,400 vulnerable jobs will be safeguarded during the lifetime of the €250 million scheme. The goal of retaining jobs that might otherwise be made redundant is an important consideration, as this would avoid the problem of deadweight loss.

Another article from the Irish Times (from earlier this month again), says that:

the lessons from Germany, which has experimented with different schemes to varying degrees of success, is that these schemes (employment-subsidy) can work if they are structured correctly... director of Forschungsinstitut zur Zukunft der Arbeit (Institute for the Study of Labour), German economist Prof Klaus Zimmermann has seen both the merits and flaws of wage subsidies.

“Global wage subsidies to entire industries or all companies to encourage new employment are very expensive and provide no substantial employment effects,” he says. But subsidies granted to individual companies to hire unemployed people have been effective, especially when combined with job-related training.

Although it is aimed at full-time workers, the Government’s Employment Subsidy Scheme has some things in common with Germany’s successful Kurzarbeit, or short-time work programme, in the sense that the cost of paying existing employees is shared, Prof Zimmermann says.

Kurzarbeit, according to ING, "is a form of government work subsidy in Germany in which employees get about 80% of their salary for working half-time. (The German government announced last week it was likely to extend its Kurzarbeit scheme for another 18 months)." This is what Liam and Kevin were discussing in recent posts.

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Addendum: Today, the European Parliament approved Ireland’s application under the European Globalisation Fund (EGF) in support of active labour market measures for redundant workers at DELL and ancillary companies. The European Commission had already approved the Irish application in September. According to the Tánaiste, Mary Coughlan, "EGF funding, when received by Ireland, can and will be effectively and efficiently spent on retraining, upskilling and providing educational and entrepreneurial supports for almost 2,500 redundant workers in the Mid West." More details available here.