3.1 General context
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The onset of the COVID-19 pandemic in Ireland and the consequent introduction of public health restrictions to curb the spread of the virus, resulted in an abrupt and adverse shock to the Irish labour market. While the impact of these restrictions varied across economic sectors, they ultimately culminated in the closure of almost all non-essential workplaces and amenities in March 2020. In order to support incomes during this time, the Government introduced the Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) and this was taken over by the Employment Wage Subsidy Scheme (EWSS) in September 2020.
By early May 2020, there was a need for increased State supports, with close to 1.2 million people receiving income supports to the labour market, including those on the Live Register. As a result, unemployment rates in Ireland increased in 2020, with the Central Statistics Office (CSO) ‘Covid-adjusted’ monthly unemployment rate- that included all those receiving the PUP- peaking at 31.5% at the end of April 2020. In other years, the ‘traditional’ unemployment rate peaked at 4/7%.
Young people were particularly impacted by the pandemic owing to their likelihood to work in customer-facing sectors that were most affected by public health Covid-19 restrictions, especially hospitality and retail. The ‘Covid-adjusted’ monthly youth unemployment rate reached almost 70% in May 2020, with the traditional measure close at 18%.
Despite this downturn, according to the European Commission’s Winter 2020 Economic Forecast, Ireland’s real Gross Domestic Product (GDP) grew by 3% in 2020, the only positive growth rate in the EU, boosted by exports from multinational companies.
Over the second half of 2021, Ireland’s economy and labour market have witnessed a sharp recovery because of society reopening facilitated by the administration of the Covid-19 vaccination. As a result, the traditional monthly unemployment rates and Covid-19 adjusted unemployment rates have decreased with individuals returning to work.
The latest economic outlooks from the OECD, European Commission, Economic and Social Research Institute (ESRI) and Central Bank of Ireland all forecast further growth in employment and GDP in 2022.
Youth unemployment and long-term youth unemployment are discussed further in Chapter 3.11 Current debates and reform.
There are two prominent features of the Irish labour market. There are a high proportion of people in employment with a third level degree and in Ireland there is a low level of labour market participation for women aged 35 and over women without a third level education.
Irish workers are more likely to be employed as ‘professionals’ or in sales and service occupations than their European counterparts. Irish employment is concentrated in the service sector, in both relatively high paying export orientated services, and relatively low paying services more geared to the domestic economy.
Another feature of the Irish economy is that Ireland has become a global technology hub for many companies. Many of the top global software companies, technical companies and IT services companies are based in Ireland. For example, Intel, HP, IBM, Microsoft and Apple, Google, Facebook, LinkedIn, Amazon, PayPal, eBay, and Twitter are all situated in Ireland. A lot of legal, financial and consulting companies are located in Ireland and this increases employment opportunities for Irish people.
IDA Ireland states that Ireland is the second largest exporter of computer and IT services in the world. The sector accounts for more than €50 billion of exports from Ireland per annum.
 It is important to note that the CSO’s COVID-19 measure of Youth Unemployment includes all those under 25 in receipt of the PUP, as well as on the Live Register. A significant proportion of those on the PUP under 25 were enrolled in full-time education and so would not normally be classified as unemployed under the standard International Labour Organisation (ILO) definition.