OECD sees no end to jobs crisis as economy struggles

Tue Jul 10, 2012 11:36am EDT
 
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By Alan Wheatley, Global Economics Correspondent

LONDON (Reuters)- Unemployment in advanced economies will remain high until at least the end of 2013, with young people and the low-skilled bearing the brunt of what is by far the weakest economic recovery in the past four decades, the OECD said on Tuesday.

The jobless rate in the 34-country OECD area will still be stuck at 7.7 percent at the end of next year, close to this May's 7.9 percent rate and leaving 48 million people out of work, the Organisation for Economic Cooperation and Development said in 2012 Employment Outlook.

The recent deterioration in the economic outlook was very bad news for the labour market, OECD Secretary-General Angel Gurria said.

"It is imperative that governments use every possible means at their disposal to help jobseekers, especially young people, by removing barriers to job creation and investing in their education and skills," said Gurria. He presented the report in Paris, where the think tank is headquartered.

Countries needed to tackle the jobs crisis with appropriate macroeconomic policy measures, including immediate steps to stabilise Europe's banking system. There was also a case for some easing of fiscal policy if governments retain room for budgetary manouevre, the OECD said.

The challenges facing policymakers were in some respects unprecedented, according to the report:

- Almost three years into the recovery from the trough of the global financial crisis, the May jobless rate was just 0.6 percentage points below the post-war high of 8.5 percent touched in October 2009.

- Youth employment has declined by almost seven percentage points, relative to overall employment, since the start of the crisis, while low-skilled employment has dropped almost five percentage points.   Continued...

 
A job seeker fills out an application during 11th annual Skid Row Career Fair the Los Angeles Mission in Los Angeles, California, May 31, 2012. REUTERS/David McNew