Unemployment in industrial world to hit new high: OECD
Unemployment in the industrialized world will hit its highest level since World War II next year.
Paris: Unemployment in the industrialized world will hit its highest level since World War II next year, surpassing the current peak, as the global economy looks set for only a timid recovery in 2010, an international organization said in a report Wednesday.
The jobless rate in the 30 rich countries that belong to the Organization for Economic Cooperation and Development will approach 10 percent in the second half of next year, according to the OECD`s latest employment outlook report.
That will top the current postwar high of 8.3 percent from June, and will mean 57 million people out of work.
Calling the short-term job outlook "grim," the Paris-based said the rise in joblessness could result in a lasting higher unemployment level that could take many years to bring back down.
"This unwelcome phenomenon occurred in a number of OECD countries in past recessions when unemployment remained at a new higher plateau compared with the pre-crisis level even after output returned to potential, and it took many years, if ever, to bring it down again to the pre-crisis level," the report said.
Unemployment rates among OECD members range from a low of 3.3 percent in the Netherlands to 18.1 percent in Spain, according to June figures. The US unemployment rate was 9.5 percent in June, above the European Union rate of 8.9 percent.
Nearly 15 million people have joined the ranks of the jobless since the end of 2007, the OECD said.
"There is great uncertainty looking forward, but labor market conditions appear set to deteriorate further in the coming months," the report said, noting that its own forecasts are for "a rather muted recovery surfacing only in the first half of 2010."
Under this scenario, the number of unemployed in the OECD will rise by more than 25 million people in less than three years, comparable to the job losses over the 10-year period until the early 1980s, the report noted.
The organization urged governments to spend more on active labor market policies, such as unemployment benefits and training. The OECD said that higher spending on these measures was cost effective and justifiable, even in countries whose public finances are strained from funding stimulus plans to fight the global recession.