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OECD frets about growing youth unemployment

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OECD frets about growing youth unemployment
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There are more grim predictions on jobs from the Organisation for Economic Cooperation and Development in its latest employment outlook

It says joblessness will likely remain high in its 34 developed member states through most of next year.

Young people and the low-skilled in many European countries will particularly continue to struggle to find work.

Its forecasts for next year run from 4.7 percent in Germany, through 6.7 percent in the US, the eurozone’s total is seen at 12.3 percent – inflated by Spain and Greece with around 28 percent of their workforce without jobs.

Euronews asked the OECD’s Secretary General Angel Gurría if European countries are taking the right steps to tackle unemployment.

His reply: “If you look at Italy, if you look at Spain, if you look at Portugal, if you look at Greece, if you look at Ireland – I would say yes. Some of the larger countries – some countries that do not have a crisis – are maybe taking it a little easier. In order to avoid being the object of market pressures, they actually also should hurry up and make the reforms.”

The OECD also said that youth unemployment in developed economies is now so severe that governments need to do more to stimulate job creation for the young, possibly including paying companies to hire them.

The group’s head of employment policy, Stefano Scarpetta, said: “We are pushing for bold action to stimulate job creation for young people, even unorthodox measures that you don’t necessarily consider in normal times, like some subsidies for hiring at companies.”

It expressed concern about the long-term unemployed losing their rights to jobless benefits, saying governments should not roll back minimum welfare schemes. It also said, where possible, states should reallocate budgets towards programmes designed to get people back into work.

The OECD urged governments to resist resorting to early retirement schemes in hope of reducing youth unemployment, which it said had little benefit but bore heavy costs.

There are already about 48 million people out of work across the OECD’s members. It forecast that the unemployment rate would hit 8.0 percent this year before easing only slightly to 7.8 percent next year.

Our Paris business correspondent Giovanni Magi concluded: “Unemployment is at record highs and at the same time governments are having to reduce the resources they can allocate to the protection of the unemployed. It’s one of the paradoxes of a crisis whose effects are destined to last for some time.”