“We are in the depression”

WHILE the battle against Covid-19 is being won in the towns and villages of the Banner, the county has slipped into an economic depression.

Around 14,400 Clare people are receiving the Pandemic Unemployment Payment of €350, with 900 medically certified for receipt of a Covid-19 related Illness Benefit payment.

More than 1,000 Clare businesses, employing approximately 7,300 people, have registered for the Covid-19 Temporary Wage Subsidy Scheme.

There are also 5,662 people on the Live Register, according to the most recent statistics from the Central Statistics Office.

When all of these are combined, it seems likely that the majority of Clare’s workforce are now receiving some level of support from the State, an unprecedented situation.

Associate Professor of Economics at the University of Limerick Stephen Kinsella spoke to The Clare Champion on Tuesday and when asked if an economic depression is now inevitable, he said, “I think the right way to think about it is that we are in the depression; 28% unemployment. Even at the worst of the last crisis, it was 16%. The question is how quickly we recover. If it recovers in a V shape, it’ll be a very bad recession that everyone talks about for the rest of their lives. If it recovers in a U shape, it’s a depression that’s a once-in-a-century event. If it’s an L shape, the economy never recovers because we never learn to live with the virus because a sufficient percentage of the population never develop immunity.”

Asked which scenario is most likely, he said it is simply impossible to tell. “I don’t know; I think the V shape is looking very aspirational at this point. The Department of Finance say that in 2019, GDP grew by 5.5%; this year, it will fall by 10% and next year, it’ll grow by 6%. That’s a V shaped recession. The chances of that happening seems low to me but anybody that pretends to know, they’re talking out of their hoop.”

He feels that reintroducing austerity will not be an option this time because the public won’t accept it. “The one thing that is really clear to me is that Irish people won’t wear more austerity as a result of this.”

The county’s sizable tourism sector has ceased to exist this year and any return to normality is not yet on the horizon.

Mr Kinsella said the businesses involved will need to receive even more support in the coming months or they could face oblivion. “Clare is a particular example; for some sectors like tourism, I would expect there will be a range of supports available. In normal times, seasonal employment would ramp up now. You hire young people to do bartending and waitressing and so forth. That’s not going to happen this year. Those kinds of changes, they may be sustainable for one year, maybe businesses can lose one season but they can’t surely lose two.”

Owen Ryan