OECD: Job Growth to Continue Weak Through 2013

The OECD has today published its Employment Outlook 2012, and the group’s conclusions are not happy ones either for the global economy or for those who are out-of-work. The OECD, a group representing 30 developed countries, expects an unemployment rate of 7.7% among its members at the end of 2013, a relatively tiny improvement from the 7.9% unemployment rate at the end of May 2012.

The US unemployment rate currently stands at 8.2%, better than a worsening rate in the Eurozone, where the rate at the end of May was 11.1%. Among younger workers, the unemployment rate among all OECD countries is 16.2% and the US unemployment rate among the young is 17.3%. In Spain, unemployment among younger workers is 46.4% and in Greece the number is 44.4%, while Germany’s rate is 8.5%.

Long-term unemployment is also rising rapidly. In the OECD as a whole, 33.6% of the unemployed have been out of work for more than a year. That compares with 31.3% in the US, 48% in Germany, and 49.6% in Greece.

The OECD notes Germany’s high number of long-term unemployed but does not specify a cause:

Almost half of all unemployed people have been out of work for over a year and most of them for over two years. Long-term unemployment is highest among older workers and the low-skilled.

The OECD encourages re-employment services (job counseling) as a first line of support for unemployed workers, and it is here that the US falls short. Spending on counseling in the US has fallen by more than -50% since 2007, while unemployment benefits payments have risen by about 50%.

Workers’ share of national income has fallen from 66.1% in the early 1990s to 61.7% by the end of the first decade of the 21st century. That decline is largely due to increased productivity that has eliminated large numbers of unskilled or low-skilled jobs. A further result of productivity improvements is that the top 1% of earners saw their share of national incomes rise by 20% over the past 20 years, while those at the bottom of the skills scale saw wages fall.

More data from the OECD is available here.

Paul Ausick