Workfare redux? Pandemic unemployment, labour activation and the lessons of post-crisis welfare reform in Ireland

Abstract

PurposeThis paper addresses the labour market impacts of Covid-19, the necessity of active labour policy reform in response to this pandemic unemployment crisis and what trajectory this reform is likely to take as countries shift attention from emergency income supports to stimulating employment recovery.Design/methodology/approachThe study draws on Ireland’s experience, as an illustrative case. This is motivated by the scale of Covid-related unemployment in Ireland, which is partly a function of strict lockdown measures but also the policy choices made in relation to the architecture of income supports. Also, Ireland was one of the countries most impacted by the Great Recession leading it to introduce sweeping reforms of its active labour policy architecture.FindingsThe analysis shows that the Covid unemployment crisis has far exceeded that of the last financial and banking crisis in Ireland. Moreover, Covid has also exposed the fragility of Ireland's recovery from the Great Recession and the fault-lines of poor public services, which intensify precarity in the context of low-paid employment growth precipitated by workfare policies implemented since 2010. While these policies had some short-term success in reducing the numbers on the Live Register, many cohorts were left behind by the reforms and these employment gains have now been almost entirely eroded.Originality/valueThe lessons from Ireland's experience of post-crisis activation reform speak to the challenges countries now face in adapting their welfare systems to facilitate a post-Covid recovery, and the risks of returning to “workfare” as usual.