A Lost Generation Also in Rich, Industrialised Countries

Human Wrongs Watch

Paris– Youth are hit disproportionately hard by the recession. In the first quarter of 2011, the unemployment rate for young people (aged 15 to 24) was 17.4% in the OECD rich, industrialised countries, compared with 7% for adults (aged 25 and over).

Unemployed men marching during the Great Depression | Wikimedia Commons

Youth who are neither in employment nor in education or training are a group at high risk of marginalisation and exclusion from the labour market,” according to the Organisation for Economic Co-operation and Development, which groups 34 top industrialised countries and some emerging economies.

Before the crisis, long-term unemployment affected 4 out of 10 unemployed people in France and Germany but it was less of a problem in Spain and the UK, and affected only one in ten unemployed in the US,” OECD secretary-general, Angel Gurría, warned.

By mid 2011, unemployment in the OECD area was still stubbornly above 44 million, over 13 million higher than its pre-crisis level. Some OECD member countries such as Greece, Ireland, Portugal and Spain have reached double-digit unemployment rates in July 2011 and the U.S. unemployment rate more than doubled to over 9%.

Faltering Economic Growth, Stubbornly High Unemployment

Economic growth is faltering in many OECD economies and there has been some pegging back of rapid growth in major emerging economies, Gurría said in Paris during the launch of 2011 OECD Employment Outlook on Sept. 15.

At the same time, “unemployment remains stubbornly high in a number of countries, more than two years into the recovery from the financial and economic crisis.”

Of all the facets of this crisis, from sovereign debt to banking, high unemployment is the elephant in the room. This is the human face of the crisis, the most visible manifestation of the challenge we face to restore sustained growth,” he said.

Two Key Concerns

The Outlook puts the spotlight on two particularly worrying aspects of the current situation: the serious threat of unemployment becoming entrenched, and the disproportionate impact of the crisis on youth unemployment.

Tackling high and persistent unemployment, improving job opportunities and ensuring adequate social safety nets should be at the top of the political agenda, said Gurría.

Weak Growth, Trade Stagnation

And going forward, the Outlook identifies key policy priorities to secure strong job creation in a context of tight fiscal conditions.

Elaborating on some of these points, OECD chief said “Unfortunately, the most recent economic news is not good, and the short-term growth prospects for the OECD area are weaker than what we had been projecting in May.”

The recovery stalled in the second quarter in large OECD economies, world trade stagnated over the summer and business and consumer confidence have dipped alarmingly, he added.

Within this overall gloomy picture, some OECD economies have been performing better than others. And one bright spot has been the continuation of robust growth in emerging economies such as Brazil, India and China, OECD reports.

Sluggish Employment Growth

The stalling recovery follows a period of anaemic job creation in many OECD countries, and over the past few months there has been some further weakening. In the United States, for example, there was no job growth in August.

OECD notes that companies are still wary about hiring more workers as uncertainty about future growth prospects remains uncomfortably high. Consequently, only a small dent has been made in the high unemployment that accumulated in a number of countries during the “Great Recession” of 2008-09.

Unemployed for Over a Year: One in Three in U.S.; 40 % in Spain

The picture is different today. Long-term unemployment has tripled in the U.S. affecting more than one in three unemployed, according to OECD.

In Spain, more than 40 per cent of the many unemployed have been out of work for more than a year.

We know from past recessions that steep hikes in long-term unemployment can take many years to unwind, and in the meantime the long-term unemployed are at high risk of poverty,” OECD has warned.

Also read:

The Lost Arab Generation https://human-wrongs-watch.net/?s=arab+lost+generation

OECD related news. http://www.oecd.org/document/35/0,3746,en_21571361_44315115_48687843_1_1_1_1,00.html

OECD Employment Outlook: http://www.oecd.org/document/46/0,3746,en_2649_33729_40401454_1_1_1_1,00.html

2011 Human Wrongs Watch

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