OECD jobs outlook flat for next 18 months
UNEMPLOYMENT rates are not expected to fall across the 34 states of the OECD over the next 18 months, according to the organisation’s annual Employment Outlook report, published yesterday.
It describes the outlook in the euro zone as “even more discouraging” because it expects the ongoing rise in jobless across the bloc to continue into next year.
In order to improve prospects the report calls for “immediate steps to stabilise the European banking system”. It also advocates greater use of fiscal stimulus in the countries where budgetary conditions allow it, and “further monetary policy easing”.
While the report acknowledges that labour market performances have varied across OECD countries, the overall picture is weak. It described developments since the depths of the global slowdown in 2009 as “by far the weakest recovery of the past four decades”.
Both youth and long-term unemployment are on the rise across the OECD. “By the last quarter of 2011, more than 35 per cent of all those unemployed in the OECD area had spent a year or more out of work and looking for a job” the report states.
Echoing calls the organisation has made in relation to Ireland, its report yesterday said that “a comprehensive package of effective re-employment services must be available for the unemployed through private and public employment services”.
It goes on to say that “considerable hiring continues despite high labour market slack, and job-search assistance should remain the first line of support for many unemployed, especially those who are job-ready”.
Currently, 48 million people are out of work across the OECD, a rise of 15 million since 2007.
Ireland, Estonia, Iceland, Spain and the US are identified as the five economies that suffered the biggest employment shocks when recession hit. Of these, it notes, only Estonia has made real progress in boosting jobs.
The report also finds that the percentage of the working-age population at work or looking for work – known as the “participation rate” – has fallen more in Ireland than any other OECD country since the crisis began.
The report also notes that only a small number of countries – Ireland, Belgium, Italy and Luxembourg – have registered increases in the proportion of inactive young people who are not in some kind of education or training.
On the recently controversial issue of unemployment benefits versus income from work, OECD figures show that, in Ireland, jobless benefits as a proportion of previous income from work were 43.2 per cent in 2009 (the last year for which figures are available). Only in Denmark was the proportion higher. The average across the OECD was 26.1 per cent.
Over the longer term the OECD expressed concerns about the impact of social cohesion of workers’ remuneration declining as a share of gross domestic product, while returns to capital increase.
It noted that in the two decades to 2009, the decline in workers’ remuneration as a percentage of GDP was third-largest in Ireland.