Unemployment will remain above pre-crisis levels in the nations of the Organization for Economic Cooperation and Development (OECD). But in a new jobs report the OECD has also found the job crisis to be bottoming out.
In the latest Employment Outlook report for its 34 member states, released Wednesday, the OECD said that the job crisis in the world's advanced economies had started to ease, but that unemployment would only modestly decline through 2015.
According to OECD analysts, average jobless rates are set to decrease over the next 18 months, from 7.4 percent in mid-2014 to 7.1 percent at the end of 2015. As unemployment has come down from a post-war high of 8.5 percent in October 2009, this still means that 12.1 million more people will be out of work than directly before the financial and economic crisis.
In the report, OECD Secretary-General Angel Gurria called on the governments in advanced as well as in emerging economies to focus on strengthening economic growth.
"The most effective way is through structural reforms to enhance competition in product and services markets. This will boost investment, productivity, jobs, earnings and well-being," he said.
The Paris-based forum sees hopeful signs for the crisis-hit eurozone where the labor market has "at last turned the corner."
Unemployment in the 18-country currency zone was forecast to fall to 11.2 per cent by the end of 2015, down from 11.7 per cent in the second quarter of this year. National job markets in the area, however, would continue to differ widely, the OECD noted.
While unemployment would still be rampant in Spain, at a rate of about 24 percent at the end of 2015 and in Greece, of 27 percent, it was expected to fall below 5 percent in Austria and Germany. The report forecast similarly low levels of joblessness for Iceland, South Korea, Mexico, Norway, Japan and Switzerland.
In the United States, the pace of job creation would remain fast, said the OECD, predicting US unemployment to decline to 5.9 per cent by the end of 2015
Stopping the wage slide
The OECD report also called on governments to halt the decline in real wages which had come to "a virtual standstill" in many countries since 2009, and actually fell up to 5 percent on average in Greece, Portugal and Spain, for example.
Lowering wages had helped boost employment, particularly in eurozone countries, but further wage decreases risked aggravating poverty, Angel Gurria warned.
"While wage cuts have helped contain job losses and restore competitiveness to countries with large deficits…, further reductions may be counterproductive and neither create jobs nor boost demand," he said.
The challenge for governments was not to just create more jobs but also better jobs, the OECD director general added, recommending reforms to boost labor mobility, improve access to training and boost protections for temporary workers.
uhe/ng (dpa, AFP, Reuters)