Jobless rate to hit record this year in richest economies, says OECD

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Unemployment is set to hit a record high across the world's richest economies this year as a result of the coronavirus pandemic, the OECD warns in its latest outlook.

The average unemployment rate across the 37 countries part of the Organisation for Economic Cooperation and Development (OECD) is forecast to reach 9.4 per cent at the end of 2020 – up from 5.3 per cent at the end of 2019.

A second wave of coronavirus infections later this year could push the jobless rate even higher, to 12.6 per cent across OECD countries.

Recovery will be slow, the organisation cautions. The unemployment rate would remain stubbornly high at 7.7 per cent in 2021, and at 8.9 per cent in case of a second wave.

"The crisis will cast a long shadow over the world and OECD economies," OECD Secretary-General Angel Gurría said in the report's foreword.

If coronavirus infections surge again near the end of this year, as many governments fear, real per capita income across the OECD in 2021 are expected to drop to 2013 levels. Even in the absence of a second wave, real per capita income is projected to fall to 2016 levels.

To cushion the blow of the crisis for workers, businesses and households, the OECD is calling on governments to encourage public and private investment, especially towards green and essential infrastructure.

It's also calling on authorities to better protect self-employed workers, as well as those on precarious contracts who may not be eligible to the same benefits as full-time and permanent workers.

"In times of crisis, ‘normality’ sounds very appealing. However, our normal was not good enough for the many people with no or precarious jobs, bad working conditions, income insecurity, and limits on their ambitions," Gurría said.

"We need to capitalise on the momentum created by the strong initial national responses to the crisis, and build better policies for better lives in the post-COVID world."