OECD sees high jobless rate till 2013 end
Source: Agencies |
July 11, 2012, Wednesday
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Print Edition
Print Edition
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 yesterday.
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 May's 7.9 percent rate and leaving 48 million people out of work, the Paris-based Organisation for Economic Cooperation and Development said in its 2012 Employment Outlook.
The recent deterioration in the economic outlook was very bad news for the labor market, OECD Secretary-General Angel Gurria said.
"It is imperative that governments use every possible means at their disposal to help job seekers, especially young people, by removing barriers to job creation and investing in their education and skills," said Gurria in Paris.
Countries needed to tackle the jobs crisis with appropriate macro-economic policy measures, including immediate steps to stabilize Europe's banking system. There was also a case for some easing of fiscal policy if governments retain room for budgetary maneuver, the OECD said.
Despite the grim environment, the OECD called for bold structural reforms in labor and product markets. For example, governments could tap a rich seam of job growth by opening the retail trade and professional services to greater competition.
Economists have pointed to still restrictive shop opening times in many European countries and international lenders have demanded that Greece and Italy loosen closed-shop practices, whether it be by pharmacies, law firms or taxi drivers.
The report examines a plunge in the share of national income taken by wages and benefits, which has been falling steadily across most of the OECD for the past 20 to 30 years.
The median labor share fell to 61.7 percent in the late 2000s from 66.1 percent in the early 1990s.
The report attributes 80 percent of the fall to improved total factor productivity and to capital deepening - the key drivers of economic growth - as a result of the spread of information and communication technologies.
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 May's 7.9 percent rate and leaving 48 million people out of work, the Paris-based Organisation for Economic Cooperation and Development said in its 2012 Employment Outlook.
The recent deterioration in the economic outlook was very bad news for the labor market, OECD Secretary-General Angel Gurria said.
"It is imperative that governments use every possible means at their disposal to help job seekers, especially young people, by removing barriers to job creation and investing in their education and skills," said Gurria in Paris.
Countries needed to tackle the jobs crisis with appropriate macro-economic policy measures, including immediate steps to stabilize Europe's banking system. There was also a case for some easing of fiscal policy if governments retain room for budgetary maneuver, the OECD said.
Despite the grim environment, the OECD called for bold structural reforms in labor and product markets. For example, governments could tap a rich seam of job growth by opening the retail trade and professional services to greater competition.
Economists have pointed to still restrictive shop opening times in many European countries and international lenders have demanded that Greece and Italy loosen closed-shop practices, whether it be by pharmacies, law firms or taxi drivers.
The report examines a plunge in the share of national income taken by wages and benefits, which has been falling steadily across most of the OECD for the past 20 to 30 years.
The median labor share fell to 61.7 percent in the late 2000s from 66.1 percent in the early 1990s.
The report attributes 80 percent of the fall to improved total factor productivity and to capital deepening - the key drivers of economic growth - as a result of the spread of information and communication technologies.
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