Introduction

Ireland, as the export oriented economy, has the labor market which can be described as
polarised where middle payed jobs are almost exterminated. Labor force in Ireland is more
likely to work as professionals in fields of sales and service occupations than their European
collegues. Service, in Ireland, is the most fulfilled sector regarding employment, in low
paying services as well as in high paying export orientated service directed to the domestic
economy. The proportion of Irish employees who work in manufacturing sector is generally
below the average of Western European countries regardless of the fact how manufacturing
in Ireland takes a large share of reported econonic output. There were large movement
toward employment of those with third level of education in the period of 2007 and 2012.
Especially emphasized features of the Irish labor market are; low level of women
participation in labor market aged 35 and more without third level of education, and large
amount of those who are employed with third level of education. According to that, some of
policies were engaged to increase women's level of participation in labor market which
would rise Ireland's economical growth as well (Nerinstitute.net, 2017).

Polarization in economy is explained as requirement of minimum skill level for those in middle class job which
actually disappearing relatively to those which requirement goes level beyond in term of higher level of some
skills, and those at the top which require the maximum level of specific skills for specific job(En.wikipedia.org,
2018)

Labor market by secotr

Similar with most advanced economies the Irish employment is dominated by services (76.9%
of employment) followed by industry (18.3% including construction, or 12.7% excluding
construction) and only 4.7% in agriculture, forestry and fisheries. In line with Ireland’s export
orientation manufacturing accounted for 23.3%2 of national output in 2012 (compared to
14.8% of economic output for the EU-15 and 22.4% for next highest EU-15 country,
Germany). However, as seen in Figure 1 the Irish manufacturing’s employment share is below
average when compared to the EU-15. Only 11.4% of Irish workers are employed in
manufacturing, compared to 14.5% for the EU15 (and 19.8% for Germany, which has the
highest share in manufacturing). Amongst the EU-15 only the UK and Greece have a lower
share of employment in manufacturing. It is a general pattern that more economically
advanced countries have a greater employment share in services rather than industry, and
throughout Europe it is the Central and Eastern European countries that tend to have a higher
proportion of employment in manufacturing, as they are geographically linked with
Germany’s manufacturing sector.
The table above shows employment by age and secotr. Regaradless of ireland's young
population ireland has a lower percentage of workers under the age of 25 in employment, with
8.5% empolyed compared to 9.1% for the EU-15. This is a least partly due to the effects of
the recession, with participation in education of those aged 15 to 24 having increased from
58.1% in 2007 to 65.0% in 2012. As young people enter the labour market for the first time, a
job must either be created or vacated for each young person entering the labour market.
Therefore, the reduced level of job creation during a recession will hit new entrants (including
young people) particularly hard. All sectors of the economy have a below average share
(when compared to the EU-15) of young workers, with the exception of accommodation and
food, wholesale and retail, and the ‘other services’ sector. These sectors are sometimes
referred to as having ‘entry level’ jobs. However, even in the accommodation and food sector
which has the largest share of young workers, 76.8% of workers are aged over 25. This is in
line with complementary data from Turner and O'Sullivan (2013) who find that the majority
of workers covered by Joint Labour Committees are aged over 25.
Since the beginning of Ireland’s economic expansion in the 1990s there has been increase
from a low base in female employment. In 2012 46.6% of those in employment were women
(compared to 45.6% for the EU-15, 47.5% for Denmark and 48.6% in Finland), but this
proportion is likely to decline. Employment numbers by gender are shown in Figure 2. Jobs
are not divided evenly by gender. Agriculture, industry, construction, transport, Information
and communication, Professional, scientific and technical activities, tend to be male
dominated. These last two sectors are likely to show greatest job growth as they are linked to
Ireland’s industrial policy of promoting service exports.

Sectors with a greater gender balance include Administrative and support service activities;
Public administration and defence, compulsory social security; and Arts, entertainment and
recreation. Sectors where the bulk of employment is female are in Education and Human
health and social work activities while those with a slight female majority are
Accommodation and food service activities; and Financial and insurance activities (which is
also an export orientated service sector). It is perhaps unsurprising that the sectors with the
highest share of female employment are also largely within the public sector, where family
friendly work practices tend to be more common (Redmond, Valiulis, & Drew, 2006).
In 2012 the gender pay gap was 13.6%, with an above average pay gap even in sectors that
are predominantly female (education and human health and social work activities). This is as
in these sectors men are more likely to be in senior management positions. Research by the
Central Statistics Office (2012) shows that the gender pay gap is significantly higher in the
private sector than the public sector. Part of the explanation of the public-private pay gap is
the reduced pay penalty for women in the public sector.

NOMINAL UNIT LABOUR COSTS

Although nominal unit labour costs are just one measure of cost competitiveness (see O’Brien
(2010) for a discussion of various different measures in an Irish context), of the measures
monitored by the European Commission as part of the Macroeconomic Imbalances Procedure
they are the most relevant to wages. The European Commission aims that nominal unit labour
costs do not increase by more than 9 percent over a three year period. Nominal unit labour
costs are defined as nominal compensation per employee (that is, the average wage plus social
security contributions per worker in cash terms), divided by real output per person in
employment (that is, labour productivity). By allowing for productivity one can account for
why workers in more developed countries earn higher wages without losing competitiveness.
While changes in nominal unit labour costs are usually analysed, looking at the absolute level
of nominal unit labour costs can also be useful. The headline indicator included in the
Macroeconomic Imbalances Procedure scoreboard is simply the change in nominal unit
labour costs over time. This is of limited usefulness as it takes no account of developments in
other countries, but it is a measure that can be influenced by domestic policy makers. As can
be seen from Figure 6 there is a strong link between high nominal unit labour costs and
economic development. This highlights the limitations in using nominal unit labour costs of
the whole economy as an indicator of competitiveness. Non-traded services are included in
the measure. It is well known that non-traded services (such as dentists or restaurants) tend to
be cheaper in Eastern European countries than in Ireland and other Western European
countries. In richer countries the traded sector tends to have higher productivity than the
traded sector of poorer countries. This higher productivity leads to higher wages in the traded
sector of the rich country. Within the rich country, higher wages in the traded sector put
upward pressure on wages in the non-traded sector. This leads to the rich country having
higher wages in the non-traded sector than the poorer country does, even if productivity for
both countries in the nontraded sector is equal. Therefore, nominal unit labour costs for the
traded sector could be equal for both countries (with the higher wages in the rich country
being offset by higher productivity), but nominal unit labour costs for the non-traded sector
will be higher in the rich country. This will lead to higher average nominal unit labour costs in
the rich country despite the rich country remaining competitive. Of course, high costs in the
non-traded sector (such as high legal fees) can reduce the competitiveness of the traded sector,
but this is due to a channel other than wages. It would be a more accurate measure of
competitiveness if nominal unit labour costs could be measured for the traded sector alone
(and perhaps the labour output for which the final use is in the internationally traded sector).
This is not possible, and sometimes the manufacturing sector is used as a proxy, as most of
the output of the manufacturing sector is traded. However, it is nominal unit labour costs for
the whole economy that is monitored by the European Commission. Effective unit labour
costs are included as an additional complimentary indicator to the MIP scorecard. These
compare developments in Ireland’s nominal unit labour costs with developments in other
countries and also movements in currency exchange rates. While developments in Irish
nominal unit labour costs can be influenced by policy makers in Ireland, Irish policymakers
cannot influence changes in exchange rates or changes in unit labour costs in other countries.
Between 2008 and 2012 changes with the US exchange rate made Irish goods 12.6% cheaper,
but changes with the Sterling exchange rate made Irish goods 1.8% more expensive in the UK
(however this is offset by lower inflation in Ireland). At the same time UK nominal unit
labour costs (as measured by the European Union) increased by 18.2% but fell by 14.2% in
Ireland. Relative to the UK Irish effective unit labour costs declined by 26.1% with currency
changes playing a relatively minor role.
Irish labor market during the crisis

Before less than ten year ago, some of papers were concerned with analysis of Irish labor
market such as " When uneployment disappears", without any overstatement. Throughout
the period of 1990s and early years of 2000s , unemployment in Ireland significantely
decreased from even rates of 15,7% to 4% from 1998 to 2000. This is not only what happend
to Ireland. In 2008, except low rate of unemployment, financial crisis occured. For example:
level of home prices negatively increased which was reflection of domestic slow-down in
home's constructions. Unemployment dramatically reached its peak from 5% in the first
part of 2008 to incredibly 15% in 2011 (Esri.ie, 2018).

Wage adjustments to the crisis

Flexibilty of wages was of great importance in the period of crisis. It had significant role even
if it was limited, it still facilitated labor market to adjust since the onset of the crisis, with
considerable proportion of cutback of wage bill attained by decreasing employment. In the
figure 1.1, breakdown of the wage changes can be clearly seen, and downward adjusmtent
of wage came into effect during the period of 2009, and 2010, with slightly wage decreasing
in 2011. In the 2012, wages returned to the maturation at the aggregate level, even if the
economics conditions still were poor, and weak capacity of the labor market (Esri.ie, 2018).

Figure 1.1

Wages do not solely reflects economic growth at an individual level, although dynamics of
the wage could be adjustet at an aggregate level; changes in structure of employment is also
important to consider. There is an assumption how influence of structural effects using wage
data on aggregate level actually proposes that those effects imposes some of indivudal
pressure (on average wage levels), and it fluctuates from sector to sector. Structural
increasing impact was evaluated in special cases of industry, professional services and
construction which were one of the most serious sectors affected in the period of crisis.
Unfortunately, lack of data at aggregate wage level prevent detailed and longer analysis of
those structral changes regarding employment and wage growth. Some of studies, such as
both Walsh ( 2011), and Bergin, McGuiness (2012), and many others made research on those
studies that have gone beyond aggregate wage data. They managed studies on company-
level, and have found how structural effects did not put pressure on wage development in
the period of crisis. Conclusion in the later studies was; general unwillingness between
companies to decrease wages with the aim to avoid productivity mislaying arasing from
employees discontent or rates of labor turnover that would be higher. Reasearch made by
Doris, O' Neill and Sweetman (2013) were based on considerable change in dynamics of
wages since the crisis started - the share of employees which are affected by wages
decreasing is more than doubled during the time when the share of a wage freeze increased
to high extent, although with substanital heterogeneity regarding observed adjustment
(Esri.ie, 2018).
Action plan - Activation of unemployed-
Acceleration of job job establishing started in 2013, with aim to help in reduction of
unemployment from high levels. Even if the rate of participation signficantly started to
increase, it still has considerably fall in the period between 2007 and 2013. Net emigration
still residued a significant factor. In that period, Irish power was in the procedure of re-
orienting labor force from traditionally passive posture, remarkably through intiative so
called Pathways to Work which was consisted of parts of the Action Plans for Jobs. In
addition, there was still a lot of work do to regarding activation efforts among those jobless
in the long- term, young adults and those low skilled. Mentioned group are usually exposed
to risk of permament disappearance from labor force (Oecd.org, 2018).

Stimulation of employers
Another succesful private sector was necessary in Irish economic crisis to reach needed
recoverement. Except activation of the workers, stimulation of employers played significant
role. Providing firms and access to worforce which is skilled and than ensure appropriate
help in finanancing by incorporation of regional and local dimensions and their efforts. More
explicitly, Action for Jobs had in plan to focus in following areas such as ;mobilising emloyers
to be a part of skills and employment system with aim to fulfill future desires od Irish
economy, to stimulate productivity of their workers, as well as, to stepp up efforts for
improvement in accessement for SMEs (Oecd.org, 2018).

Innovations, as one of the key factors.

Innovation for Irish government represents an important source of competition, creation of
new jobs, economical and social developments. Through National Research Prioritisation
Exercise in 2012 as well as in Action Plan for Jobs in the same year, government put effort in
investments related to those areas for which they could predict that would provide them the
highest return later. Of course, Innovation itself, and supporting mechanism should have
been better estimated. The National Health Innovation Hub seemed to be a chance for
Ireland to develop its own present advantages and become one of the market leader globally
(Oecd.org, 2018).

Control for jobs and growth

The implementation on Ireland’s Action Plan for Jobs (APJ) marks an vital innovation in Irish
governance, including amazing efforts to beef up co-ordination then assistance across
government within assist of private sector-led labor creation. It employs high-level politic
buy-in and a governance structure component resolution administration departments,
including the Department over the Taoiseach (Prime Minister), the resolution centre-of-
government (CoG) institutions. Modelled about the EU-ECB-IMF Troika’s quarterly goals then
reporting, the APJ is subject in conformity with strong central blunder then stern action-
oriented monitoring durability (Oecd.org, 2018).

Policy measures
As previosly mention, during 2008, financial and economic crisis seriously hurt economy of
Ireland as well as its labor market, and it took some time to recovery. The magnitude of
demage could be described by taking into account growing in unemployment in period of
recession. Concern of unemployment would be even more serious but not for the scale of
the fall in labor force participation and net emigration which Ireland faced in recent years.
With re-improving of public finances to health and with restructring sector of baniking, it is
very important to establish appropriate policy with role to solve and adress some of
disparities in the labor market. Some of the analysis have shown how those without jobs are
actually large amount of employees have low level of skills, have never worked, or have
previously worked in construction. In addition, those unemployed individuals in the long run
have chance to be employed rather than those without jobs in the short run. This comes
from occurence where unemployment in the long run worse training and skills of workers
and make them less productive and motivated for new opportunites in the labor market.
Labor market, is then, affected by lot of hysteris, risk of deskilled group of workers and
similar negativities. If unemployment do not rise, there is high possiblity of bypassing of
labor market recoverement. Because of the problem of individual level of unemployment,
lot of fields considering Irish labor market needs more policy action. Gap between young
male population, which is generally educated and expirienced at low level and those who are
well trained and skilled should be closed, especially in permament reduction of construction
sector. It is also important to emphasize the lack of demand in overall economy, which one
of the answer on unemployment problem. In fact, that moment when domestic demand
start to recover, employment should decrease. However, in order to shift from
unemployment to employment in Irish labor market depends on vacancies, and other
broader range of datas that would help in supporting economic development. Also, it is
needed to provide better access to credits to both investors and costumers. What is also
characteristic for Ireland labor market is, presence of the large shadow which has a two
parts; a large number of discouraged workers currently out of the labor force, and those
who are not well skilled to fill in vacancies in sectors where demand is increasing. If supply of
labor force excludes at all from labor force, it could harm growth of economy in the long run
and its potential. Furthermore, here are social consequences of the financial crisis which
negatively affect labor market, even if some progress can be made in terms of labor market
reform. Skills mismatch and trend of increasing structural unemployment point to the need
for urgent policy measures (Esri.ie, 2018).
Irish labor market – Latest data-
The latest data according to the Irish Times have shown that Ireland economy recorded fall
of unemployment level to 6,4 % with improvement of labor market. According to the Central
Statistics Office (SCO), Ireland has recorded fall in unemployment for 6,4% which is the
lowest level in the less then last ten years. The newest figures represents how number of
workers marked as unemployed fell to 141, 400 to 3,300 resulting in annual fall of 39,800.
After reaching peak of 15,2% of the crash in 2012, rate of unemployment is below the euro-
area average( 9,5 %) for even three points. Based on following trends, there are prediction
how jobless rate can even fall below 6 per cent which is close to full employment in this
country. Institute for the Economics and Social Reasearch, known as ESRI has emphasized
how Irish economy, at this level of unemployment, faces risk of overheating. Analyst David
McNamara said "“At face value, the headline data suggest that Ireland’s recovery phase is
almost complete – unemployment could be below 5 per cent by the end of 2017 at the
current pace,” (The Irish Times, 2018).

Figure 1.2

“However, a broad range of indicators suggest that the recovery has further to run –
employment is still 5.4 per cent below peak and labour force participation is only now
beginning to recover as net migration turns positive,” he commented (The Irish Times, 2018).

Strenghts and weaknesses of labor market

Flexible jobs then stuff markets, favourable enterprise climate, pleasing complication
regime, presence of multinational companies specialisation into high-added-value sectors
(including pharmaceutics, IT and computers, clinical equipment) would be strenghts of Irish
economy, while weaknesses such as; dependence regarding the European financial situation,
and UK into particular vulnerability after modifications in foreign business enterprise
strategies, continuing high stage on populace then private debt, banking zone remains
inclined in imitation of shocks should be considered (Coface.com, 2018).

Business climate
It is fact how innovation in Ireland business community and its action are actually forged in
the area of changing business climate, and that is why they have good sense for business
generally. According to Sustainable Nation Ireland, which represents the center of
maintainable business and investment states how everyone who is going to ignorse agenda
of sustainability, will always be a step back. Some of statistic data, such as those from
Climate Change Index, has shown that Ireland moved to 49th out of 56 ranked countries.
Stephen Nolan, the President of the Management Board said how Irish business community
is of great importance in achieving even better results. Nolan said how businesseses in
Ireland should change their climate, and that is because he claims that is only solution for
improvement, and that business climate actually should be main priority. He also stated how
is accepting the program of sustainability agenda is not the only solution but also very
responsible process in which SMEs and corporates create start-ups which require healthy
and affordable climate. Nation that is maintainable is non for profit, working with private
and public sectors. Its main motivation is ecouraging investments with good potential into
clever innovatios, maintainable business practices as well as new enterprises. It is policy for
those who works in fields of low- carbon and capital markets to get closer, understand
desires and goals of each others, and eventually start and do business together at local or
even global level. Catharine McKenna, Minister for Canadian Environment and Climate
change in Dublin is the one who is comitted to completely suppression of fossil fuelas such
as coal for example, and its production. Other Irish company have the same and similar goals
on the subject of this topic such as; AIB, Kingspan, KPMG, and Mainstream Renewable
Power. Recent high-quality developments out of an Irish commercial enterprise point of
view include:
Dublin’s IFSC within October certain a UN-supported initiative known as the ‘Casablanca
Declaration’ which has tooled a fascicle of inexperienced pay up hubs that actively beg green
funding opportunities. Over €28 billion of green economic things to do which includes €11
billion between inexperienced bonds listed on the Irish Stock Exchange, is managed from,
domiciled or listed between Ireland.

Microsoft has signed a 15-year government buy settlement (PPA) with GE in imitation of
purchase one hundred percentage on the wind electricity from a 37-megawatt atmosphere
farm of County Kerry.
Kingspan has been named for the 1/3 12 months among a tier concerning The Climate ‘A
List’ by means of CDP, the international not-for-profit up to expectation measures the
environmental affect concerning lots regarding corporations round the world. Kingspan is
some over only twins Irish businesses according to perform the listing on 112 companies, as
includes Unilever, Microsoft, or Toyota.

Three Irish cleantech companies have been finalists into the EU’s recent marquee
commercial enterprise competition Climatelaunchpad so promotes ideas or improvements
in conformity with handle local weather change. They had been SizeU, NuWardrobe or
AquaRoot.

Tallaght-based HubControls used to be named among the world top three cleantech
agencies at a celebration within London, organised with the aid of the Global Cleantech
Cluster Association (GCCA) (Sustainable Nation, 2018).
References :

Nerinstitute.net. (2018). Cite a Website - Cite This For Me. [online] Available at:
https://www.nerinstitute.net/download/pdf/an_overview_of_the_irish_labour_market_neri
_wp201415.pdf [Accessed 6 Jan. 2018].
Esri.ie. (2018). Cite a Website - Cite This For Me. [online] Available at:
https://www.esri.ie/pubs/JACB201550.pdf [Accessed 6 Jan. 2018].
En.wikipedia.org. (2018). Polarization (economics). [online] Available at:
https://en.wikipedia.org/wiki/Polarization_(economics) [Accessed 6 Jan. 2018].
The Irish Times. (2018). Unemployment falls to 6.4% as labour market improves. [online]
Available at: https://www.irishtimes.com/business/economy/unemployment-falls-to-6-4-as-
labour-market-improves-1.3036144 [Accessed 6 Jan. 2018].
Coface.com. (2018). Ireland / Economic Studies - Coface. [online] Available at:
http://www.coface.com/Economic-Studies-and-Country-Risks/Ireland [Accessed 6 Jan.
2018].
Sustainable Nation. (2018). Ireland’s business community is leading the way on climate
change – there is no other choice - Sustainable Nation. [online] Available at:
https://www.sustainablenation.ie/irelands-business-community-leading-way-climate-
change-no-choice/ [Accessed 7 Jan. 2018].
Oecd.org. (2018). OECD.org - OECD. [online] Available at: http://www.oecd.org [Accessed 7
Jan. 2018].