No return to pre-pandemic levels of employment before 2023 and there are lots of ifs involved to achieve that

Anne-Marie Walsh

The Covid-19 pandemic is expected to have taken a three-year toll on the economy

March 25 2021 02:30 AM

It will be the best part of two years at the earliest before we can hope to return to the full employment levels we enjoyed just before this pandemic struck, according to the experts.

And there are a lot of ifs, if we are even to achieve that.

This is the forecast once there’s no fourth wave of the virus and no more hiccups in the national vaccine roll-out, and if public health restrictions are finally eased from April 5 and more extensively from July rather than maintained.

These conclusions have been drawn by four ESRI economists in their updated forecast for the economy this spring.

In the best-case scenario, their findings show that the Covid-19 pandemic will have taken a three-year toll on the economy.

It’s a long way from the start of last year when the unemployment rate stood at 4.9pc in February.

This February it was 24.8pc.

In other words, almost one in every four workers was unemployed last month.

But they do give us some hope, should all go according to plan.

The forecasts on the jobs front for this year and next are a lot better than for 2020.

Last April, the unemployment rate peaked at 30.5pc of the country’s labour force when there were 605,000 people on the Pandemic Unemployment Payment (PUP).

The economists predict that the rate will improve from an average of 18.7pc last year to 16.7pc in 2021, plummeting to just over 7pc next year.

That’s a significant fall from 450,000 people out of work to 181,000.

Still, we cannot expect anything approaching the enviable levels at the start of last year for some time.

“We believe it is unlikely that the unemployment rate will approach its pre-Covid low of 4.7pc until 2023 at the earliest,” says the ESRI’s quarterly economic commentary.

Thanks to the ability of many businesses to survive because of home working or being counted on the prized list of essential services, the economy has avoided an even greater hit.

But it also means those working in sectors at a standstill due to the lockdowns – and who also happen to be traditionally low-paid – will find the gap between them and those largely unaffected is likely to have widened.

The unaffected may even have amassed savings,

The Government has helped ease this impact to some extent with €350-a-week flat-rate payment to all who lost their jobs rather than the €203 dole.

More recently, though, the PUP payment is also being paid at lower rates.

Younger workers and those in public-facing industries have fared worst.

Almost a quarter of those on PUP at the start of this month were from the accommodation and food sector, just under 16pc from the wholesale, retail and motor repair trade, and almost 13pc from the construction sector.

These three sectors alone account for 52pc of PUP recipients, says the ESRI report.

The Government did apply an expensive sticking plaster to the economy in the shape of the PUP and wage subsidies to prevent large-scale redundancies.

But nobody will know what real damage lies beneath until these are rolled back.

There’s still a long way to go without further spanners in the works.

The latest statistics do not make easy reading, either.

There were 468,850 people on PUP in the first week of this month. Another 309,500 workers benefitted from employment wage subsidies paid through their employers last month.

If you add another 186,702 people on the Live Register at the end of last month, that’s 965,052 people depending on State income supports.

That is almost half the labour force.