Ireland and the EU at 50

Brief History of the Labour Force Survey (LFS)

The first attempt to create an EU-wide LFS was made in 1960 when the six original Member States of the then European Community collected comparable data on employment and unemployment by means of a labour force survey. In the following decades and until the early 1990s the comparability of countries' data relied mainly on Member States' agreements to use international statistical definitions. The concepts and definitions used were those adopted by the 13th International Conference of Labour Statisticians of 1982.

In the early 1990s, EU legislation was first used to further assure the comparability of the EU-LFS. EU regulations in the field of statistics legally bind the Member States to fulfil the standards set out in the regulations. They stipulate the rules and guidelines to assure the comparability of the results by regulating the survey designs, the survey characteristics, and methods. Council Regulation 3711/1991, introduced in 1992, aimed to improve the quality of the data and their reliability at national and regional level by specifying the contents and reliability criteria for the EU-LFS survey as well as the frequency of the survey and the conduct of the survey. On 09 March 1998, Council Regulation 577/1998 was introduced and set the regulatory framework and the pillars for today’s EU-LFS by changing the survey to a continuous, quarterly sample survey and adapting an output harmonisation approach to ensure greater comparability.

In order to comply with Council regulation 577/98, the CSO introduced the Quarterly National Household Survey (QNHS) in September 1997, replacing the Annual April Labour Force Survey. Up to and including the fourth quarter of 2008, the QNHS operated on a seasonal quarterly basis since it was established in Q4 1997, and it moved to a calendar quarter basis in Q1 2009. At the beginning of Q3 2017, the QNHS was replaced by the LFS in its current format.

Today the EU-LFS does not rely only on specific legislation for this survey. There are other initiatives across domains to ensure data quality. For instance, the European Statistics Code of Practice clearly states in Principle 14 that European Statistics are consistent internally, over time, and comparable between regions and countries.

Labour Market in Ireland

In 1973, Ireland’s unemployment rate was 5.7% of the active population (based on the Principal Economic Status definition of unemployment), the rate reached 16.3% in 1988. In 2001, Ireland hit its lowest unemployment rate of 4.2%. However, after the economic crash, the unemployment rate hit another high rate of 15.9% in 2012. Since that point, Ireland has seen a decrease in its unemployment rate to its current level of 4.5% in 2022, despite a slight increase in the post-COVID-19 era.

Ireland's Employment by Economic Sector

The composition of Ireland’s labour market has undergone a significant transformation from 1973 to 2023. The industrial sector accounted for 31% of the labour force in 1973, however, this fell to 19% in 2022. Agriculture, having employed 24% of the workforce in 1973, has seen a dramatic decline and accounted for just 4% of the workforce in 2022. In contrast, the services sector has experienced remarkable growth, rising from a 45% share of the workforce in 1973 to 77% in 2022, highlighting the role of technology, finance and other service-orientated industries in Ireland’s modern labour market.

Ireland's Employment of Non-Irish Citizens

There has been a large increase in the number of people working in Ireland who are non-Irish citizens over the last 25 years, from just over 50,000 in 1998 to around 470,000 in 2022.

Employees from Accession States (EU15-EU17)

Between 2004 and 2008, many workers from the accession countries were employed in the Construction and Accommodation & Food Services Activities sectors. During this period, these two sectors accounted for more than half of the employees from these countries.

After the Construction industry went into decline in 2008, there were fewer people employed in Construction, and the Wholesale & Retail Trade and Accommodation & Food Services Activities became the dominant sectors for employees from the accession countries. 

Average Earnings Through the Decades

By joining the European Economic Community (EEC) in 1973, Ireland gained access to the Common Market which accelerated our economic growth. Earnings in Ireland between 1973 and 2023 have followed a predominantly upward trajectory, driven by many economic factors. 

The two oil crises in the 1970s impacted on our now open economy by increasing the cost of energy as well as the prices of imported goods and services. Along with higher prices of goods from the EEC, the oil crises also fuelled large increases in inflation during this decade. The rise in the cost of living caused industrial unrest with workers and trade unions demanding higher pay to match the growth in prices. This led to a significant number of strikes in many sectors including banking, postal services, energy, and transport. 

The 1980s were marked by recession in the early part of the decade, followed by years of slow growth, high emigration, high inflation, and austerity.

Several factors influenced economic development in the 1990s. Wages were largely determined in the context of social partnership and the Maastricht convergence criteria (in advance of European Monetary Union) which helped establish a more stable economic climate. The decade saw increased competition and high inward investment. In 1995 the term “Celtic Tiger” was coined to describe the Irish economy, which was experiencing unprecedented growth in output, higher numbers in employment, and increases in the standard of living.

The Celtic Tiger economy continued at pace until 2008. Average nominal weekly earnings had increased in each year of this decade up to 2008. However, the global financial crisis in 2008 had a huge impact on the Irish economy. The Construction sector was significantly impacted by the recession which took hold in 2009, with recovery beginning in 2012. Average earnings in construction have continued to rise steadily since then, as seen in Figure 10.6 below.

In 2020, the worldwide COVID-19 pandemic saw restrictions imposed on businesses and society in an effort to control the spread of infection. Restrictions were imposed on businesses at various stages over a two-year period. The impact of this crisis was experienced very differently across and within different sectors of the economy, with the most impacted enterprises being supported by the Government Wage Subsidy Schemes from March 2020 to May 2022. While all economic sectors have experienced increases in average earnings in the 10-year period to Q1 2023, the Financial & Real Estate sector, along with the Information & Communication sector, have experienced a higher earnings growth in this period, with earnings in Information & Communication growing by almost 60% between 2013 and 2023.

In February 2022, the conflict in the Ukraine impacted economic growth and inflation across Europe. By August 2023, there were twenty three straight months where the annual increase in the Consumer Price Index was at least 5.0%, and inflation rates returned to levels not seen since the 1980s. 

Over the 50-year period since Ireland joined the EU, there have been different methods employed to collect earnings data. From a number of sources, the CSO has estimates in relation to the average earnings of industrial workers in the Industry sector (known as the average industrial wage) for the period 1973 to 2022 and the trajectory of average earnings together with the impact of the economic events outlined is evident from this time series, outlined in Table 10.2 and Figure 10.8 below.

Industrial Disputes

Ireland’s joining of the European Community in 1973 prompted legislation on labour relations. A range of Acts provided different forms of employment protection to employees, mostly deriving from EU Directives. These include The Minimum Notice and Terms of Employment Act 1973, Civil Service (Employment of Married Women) Act 1973, The Unfair Dismissals Acts 1977-1993, The Organisation of Working Time Act 1997, and The Employment Equality Act 1998.

The number of disputes involving stoppages of work which began in 1973 was 182. The number of workpeople involved was 31,761 and the aggregate time lost was estimated at 206,725 working-days. Most working-days lost were in October (46,779) and November (28,401) of that year. The industrial group with the largest number of working-days lost was Manufacturing (71,021) which involved 14,570 people and 89 firms.

In 2022, there were seven industrial disputes in progress which involved 50 firms, 4,078 workers and the total days lost to industrial disputes were 5,256.

In Quarter 1 2023, two industrial disputes began, the number of firms involved was five, the number of workers involved was 673, and the total days lost was 655.

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