Sep 16, 2009
Risk of 'lost generation'
Nearly 15 million people have joined the ranks of the jobless since the end of 2007. -- PHOTO: REUTERS
PARIS - THE economic crisis added 15 million people to the total out of work in industrialised countries in the past 20 months and unemployment will rise more next year, the OECD warned on Wednesday.
The rate could jump to a post World War II high level of 10 per cent, the Organisation for Economic Cooperation and Development said, despite signs of economic recovery.
The OECD said that government measures to support employment had helped, but also warned that if they became permanent they could turn into an obstruction to recovery. But it said particular attention had to be given to preventing the risk of a 'lost generation' of young people, trapped in long-term unemployment.
The unemployment rate in the 30 OECD industrialised economies has already reached 8.5 per cent, a post-war record. This meant that 15 million workers have lost their jobs since the end of 2007, the OECD said. But in a report earlier this week, the OECD disclosed that the 8.5-per cent rate, recorded in June, stayed steady in July.
Nevertheless, the OECD in a new employment outlook survey, forecast that if a nascent economic recovery 'fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10 per cent, with 57 million out of work'.
OECD secretary-general Angel Gurria said: 'Employment is the bottom line of the current crisis. It is essential the governments focus on helping job seekers in the months to come.'
The OECD said governments had to 'urgently reassess and adapt their labour market and social policies in order to prevent people from falling into the trap of long-term unemployment.' Most OECD countries had acted to support demand for labour, with measures such as temporary cuts in social charges on employers and subsidies for short-time working.
These measures 'are playing a positive role' but 'they must be temporary and well-targeted, otherwise they could become an obstacle to recovery by propping up declining firms and making it harder for expanding ones to hire new workers'.
Social safety nets to prevent the unemployed from falling into poverty should be strengthened, it said. In the OECD area, 37 per cent of people in households where no-one had a job lived in poverty. This was five times higher than for households in which at least one person had a job. Governments should increase spending to help people to obtain training and to look for work.
Although such spending in some countries had risen, the increase was small compared to the acceleration of unemployment. And in the United States, Spain and Ireland, where OECD unemployment had risen the fastest, such spending per unemployed person had fallen by 40 per cent in a year. -- AFP
Risk of 'lost generation'
Nearly 15 million people have joined the ranks of the jobless since the end of 2007. -- PHOTO: REUTERS
PARIS - THE economic crisis added 15 million people to the total out of work in industrialised countries in the past 20 months and unemployment will rise more next year, the OECD warned on Wednesday.
The rate could jump to a post World War II high level of 10 per cent, the Organisation for Economic Cooperation and Development said, despite signs of economic recovery.
The OECD said that government measures to support employment had helped, but also warned that if they became permanent they could turn into an obstruction to recovery. But it said particular attention had to be given to preventing the risk of a 'lost generation' of young people, trapped in long-term unemployment.
The unemployment rate in the 30 OECD industrialised economies has already reached 8.5 per cent, a post-war record. This meant that 15 million workers have lost their jobs since the end of 2007, the OECD said. But in a report earlier this week, the OECD disclosed that the 8.5-per cent rate, recorded in June, stayed steady in July.
Nevertheless, the OECD in a new employment outlook survey, forecast that if a nascent economic recovery 'fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10 per cent, with 57 million out of work'.
OECD secretary-general Angel Gurria said: 'Employment is the bottom line of the current crisis. It is essential the governments focus on helping job seekers in the months to come.'
The OECD said governments had to 'urgently reassess and adapt their labour market and social policies in order to prevent people from falling into the trap of long-term unemployment.' Most OECD countries had acted to support demand for labour, with measures such as temporary cuts in social charges on employers and subsidies for short-time working.
These measures 'are playing a positive role' but 'they must be temporary and well-targeted, otherwise they could become an obstacle to recovery by propping up declining firms and making it harder for expanding ones to hire new workers'.
Social safety nets to prevent the unemployed from falling into poverty should be strengthened, it said. In the OECD area, 37 per cent of people in households where no-one had a job lived in poverty. This was five times higher than for households in which at least one person had a job. Governments should increase spending to help people to obtain training and to look for work.
Although such spending in some countries had risen, the increase was small compared to the acceleration of unemployment. And in the United States, Spain and Ireland, where OECD unemployment had risen the fastest, such spending per unemployed person had fallen by 40 per cent in a year. -- AFP
