Someone forgot to tell employers that the recession is over. The OECD reports that unemployment among developed nations has reached a post-WWII high.
In its latest employment outlook the agency said that the unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%,with 57 million people out of work.
The analysis points out the younger workers without substantial qualifications have been the hardest hit and are the least likely people to find jobs in the near future.
The figures undermine the notion that the recession is ending in the developed world. GDP data in most OECD nations in Europe and Asia have begun to rebound. Even the US expects to have positive economic growth in the second half of the year.
But, the report raises the question of whether a “jobless” recovery is possible with tens of millions of consumers around the world out of work. If consumer spending does not recovery sharply the odds of a “W”-shaped recovery rise substantially.
The high unemployment number also begs the question of whether the stimulus packages in OECD nations, which total trillions of dollars, are working. While government spending is rising, tax receipts from businesses and individuals are falling. That, by almost any definition, is not a recovery.
Douglas A. McIntyre
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