In a report from the Organization for Economic Cooperation and Development (OECD), the jobless rate throughout the 30 richest countries is expected to reach an all-time high near 10% during the second half of 2009. If these numbers are reached, that will indicate that more than 57 million workers are slated to make up the unemployment ranks.
Of the 57 million workers projected to be out of work, nearly half, or 25 million, are predicted to lose their jobs over a three-year period. The world’s current unemployment rate already sits at a post-World War II high of 8.5%.
Representatives from the OECD commented on their findings, “This unwelcome phenomenon occurred in a number of OECD countries in past recessions when unemployment remained at a new higher plateau compared with the pre-crisis level even after output returned to potential, and it took many years, if ever, to bring it down again to the pre-crisis level.”
Economists believe that the global economy will rebound marginally in 2010, although the short-term employment outlook looks bleak. Throughout the industrialized countries in the report, there were a broad range of unemployment rates.
In a June survey, the OECD reported that the unemployment rate within the Netherlands was as low as 3.3%, while Spain’s rate soared to a record high 18.1%. The European Union as a whole posted an overall unemployment rate of 8.9%. The U.S.’s rate was 9.5% in June.
The OECD later commented, “There is great uncertainty looking forward, but labor market conditions appear set to deteriorate further in the coming months. The labor market outlook would be even worse if governments had not pursued expansionary monetary and fiscal policy.”
Since the start of the global crisis, estimated to have started in the 3Q of 2007, the recession is responsible for more than 8.7 million U.S. workers losing their jobs. Stretching from the end of 2007 to the end of 2010, OECD officials believe that the recession will be liable for nearly 1.24 million workers in Japan losing their jobs.
According to the OECD predictions, the unemployment debacle seems to have neared a bottom in the U.S., Spain and Ireland. From the start of 2007 through the second quarter of 2009, the unemployment rates within these countries have advanced by 4.5 percentage points, 9.7 percentage points and 7.8 percentage points respectively.
Nevertheless, other countries such as Italy, Germany and France appear to have additional employment troubles laying ahead.
In order to help combat these projections, the OECD is urging countries to implement government policies that would entail spending more funds on active labor market initiatives. These programs would include job-seeker support, training and labor-demand support that help the out-of-work seeker find employment.
At the same time, the governments of these countries need to take calculated steps in order to successfully target the short-term problems. If precautions are not heeded, the unproductive practice of supporting declining businesses, as well as not allowing expanding ones to hire new workers, could prolong the unemployment crisis.
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