Job creation a top priority

Unemployment in rich economies may
have peaked, but 17 million new jobs were needed to return to pre-crisis
employment levels, a group has said.

The Organisation for Economic
Co-operation and Development (OECD) said job creation had “to be a top
priority for governments”.

Creating jobs at the same time as
cutting deficits was “a daunting challenge”, the group added.

It said there was a risk that
millions may lose touch with the labour market.

“High joblessness as the new normal
cannot be accepted and has to be tackled by a comprehensive policy
strategy,” OECD secretary general Angel Gurria said.

Of the 17 million jobs that have
been shed during the downturn, 10 million have been lost in the US, the group
of 31 developed nations said.

In Spain, which has the highest
rate of unemployment in the OECD area at 19.9 per cent, 2.5 million jobs have
been lost.

In total, there are 47 million
people unemployed in the area, but that number could be 80 million if those who
have given up looking for work, or those working part-time but looking for
full-time work, are taken into account, the group said.

While acknowledging that
governments had to cut budget deficits and that there had been “signs of
[economic] recovery in most countries”, the OECD said support for the
unemployed must be maintained.

“Governments must resist the
temptation to cut benefits or reduce funds for re-employment services to save
money in the short term,” it added.

The group recommended tax breaks
and other subsidies for hiring, together with increased investment in training,
particularly for low-skilled workers.

Governments were forced to borrow
heavily during the global downturn, and are now focusing on cutting their
budget deficits to reduce their overall levels of debt.

To this end, many are making
drastic spending cuts to help balance the books, including cutting back some
public sector jobs.

This has raised concerns that
unemployment levels could rise, which in turn could undermine the recovery.

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Governments must not cut benefits for short-term gain, says the OECD
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