Developed nations must spur high-quality job creation, report says

Despite some encouraging gains in global labor markets, unemployment remains a stubborn problem among the 34 countries that make up the Organization for Economic Cooperation and Development (OECD) and requires a greater commitment to tackling both joblessness and a trend towards lower-quality positions, the organization said on Wednesday. 

In its employment outlook for 2014, the Paris-based think tank predicted the rate of joblessness in member nations — a grouping of developed economies including much of Europe and the U.S. — would likely tick down over the next 18 months from 7.4 percent to 7.1 percent by the end of 2015. But even so, the lasting effects of the global financial meltdown of nearly six years ago are still being felt. "Almost 45 million people are out of work in OECD countries, 12.1 million more than just before the crisis," the report noted.

But Stefano Scarpetta, the OECD Director for Employment, Labor and Social Affairs, pointed out that there remained “sharp differences” across member countries in their unemployment rates. For example, he pointed to the 6.2 percent unemployment rate in the U.S. recorded in July this year — the lowest level since September 2008 — and a 3.7 percent unemployment rate in Japan. 

The report said that among OECD members, 16.3 million people — more than one in three of all unemployed — have been out of work for 12 months or more in the first quarter of 2014. That number, the report said, was almost twice what it was in 2007. 

"Long-term unemployment has probably peaked in most countries, but it remains a major source of concern," Scarpetta wrote in an editorial accompanying the report. "For countries that saw the biggest increases, there is growing evidence that part of what was originally a cyclical increase in unemployment has become structural and will thus be more difficult to reverse during the economic recovery."

Given such figures, "priority should be given to employment and training measures for the long-term unemployed who typically face significant barriers to finding work and are most likely to quit the labor force," the report said. 

The report also noted that those who have been able to keep their jobs have seen their wages grow slowly or fall as a result of the financial crisis. 

"Further wage adjustment, especially given low inflation, would require painful wage cuts and could increase the number of working poor," the report said. "A range of policies are needed to promote competitiveness, growth and job creation."

The report also raised concerns over the move toward less-skilled work and part-time positions by those looking for employment.

Temporary work is "damaging to individuals and the economy," the OECD said, adding that such positions "have an adverse impact on both equity and efficiency."

"Workers on these [temporary] contracts often face a higher degree of job insecurity than employees on regular contracts. And firms tend to invest less in non-regular workers, which in turn may depress their productivity and human capital development."

Ultimately, Scarpetta said, more attention needed to be focused towards improving not only the quantity of jobs, but also the quality. 

"Governments must take action to foster the conditions needed for employment growth and improve access to productive and rewarding jobs."