48 million people out of work in OECD nations

PARIS

The OECD says young people continue to face record unemployment levels, with rates exceeding 60 percent in Greece and around 40 percent in Italy. REUTERS photo

Unemployment in OECD countries will remain high through 2014, with young people and the low-skilled hit hardest, and the jobless rate wil hit record 12.3% in eurozone in 2014, according to a new OECD report.

The OECD Employment Outlook 2013 says that jobless rates will fall only slightly over the next 18 months, from 8.0 percent in May 2013 to 7.8 percent at the end of 2014, leaving around 48 million people out of work in the 34 OECD countries.

The report reveals big, widening disparities between countries. Unemployment in Turkey is projected to fall from 8.9 percent in 2012 to 7.8 percent by the end of 2014. Unemployment in the US is projected to fall from 7.6 percent in May 2013 to below 7 percent by the end of 2014. In Germany, the unemployment rate will decline from 5.3 percent to under 5 percent, the report said. But in the rest of Europe, joblessness is expected to remain flat or even rise in many countries. By end 2014, unemployment is expected to be just over 11 percent in France, around 12.5 percent in Italy, and close to 28 percent in Spain and Greece.

“The social scars of the crisis are far from being healed,” said OECD Secretary-General Angel Gurría at the launch of the report in Paris yesterday. “Many of our countries continue to struggle with high and persistent unemployment, particularly among youth. Therefore, the recent commitment by OECD Ministers to do more to help youth, as set out in the OECD Action Plan for Youth, is an essential tool in our fight against the scourge of joblessness.” The hardship of the crisis has not been shared equally, said the report.

Young people in trouble
 
Young people continue to face record unemployment levels in many countries, with rates exceeding 60 percent in Greece, 52 percent in South Africa, 55 percent in Spain and around 40 percent in Italy and Portugal. Older workers have fared much better in the crisis, with their job rates rising or falling only modestly. Many are retiring later for a variety of reasons, including better health, the closure of access to early retirement schemes and also financial pressures.

New evidence in the Outlook shows that this has not been at the expense of the young. Bringing back early retirement schemes or relaxing rules for disability or unemployment benefits for older workers would be a costly mistake, said the OECD.

Governments should tackle the jobs crisis with a combination of macroeconomic policies and structural reforms to strengthen growth and boost job creation, the OECD said. Over the past few years, a number of countries, including Greece, Italy and Spain, have introduced ambitious reforms to reduce the gap in employment protection between workers. These reforms have the potential, if fully implemented, to promote a more inclusive labor market and a better allocation of resources, the report said.