- The Washington Times - Tuesday, July 10, 2012

The world’s industrial powers are facing an extended period of economic headwinds with no relief in sight on the jobless front, according to an extensive survey released Tuesday by the Organization for Economic Cooperation and Development.

The 2012 Employment Outlook found that unemployment throughout its 34 member-countries has continued to rise despite three years of economic recovery. The number of long-term jobless also is rising, and some people are giving up on the job search process entirely, increasing the risk that current unemployment patterns may become permanent.

The OECD report comes on the heels of a U.S. jobs report released Friday that found the domestic unemployment rate at 8.2 percent, unchanged from the previous month.

“This is clearly a demanding time for labor market authorities,” said John P. Martin, OECD’s director for employment, labor and social affairs, in a statement released with the report. “They are confronted with a slow and uneven recovery, a growing risk of increased structural unemployment in some countries and tighter constraints on public expenditures.”

According to the OECD report, unemployment decreased 0.6 percent from October 2009 to May 2012 to 7.9 percent in OECD member countries, which include the United States, Japan and the major economies of Europe.

Youth unemployment has risen 7 percent since 2008 and low-skilled unemployment is up 5 percent. The 17 countries of the eurozone were hit particularly hard, with collective unemployment in the zone at an all-time high of 11.1 percent in May.

The OECD expects joblessness to remain at about 7.7 percent in the next 18 months, leaving about 48 million unemployed. In the U.S., unemployment is projected to fall in that time from the current 8.2 percent to 7.4 percent.

The U.S. has cut spending on unemployment resources by almost 50 percent since 2007, leaving unemployed workers without jobs for longer. About one-third of the unemployed have been without jobs for more than a year, compared to one-10th of workers before the recession. However, the U.S. has increased spending on unemployment insurance by 18 percent per person.

The U.S. economy is “starting to get up to European levels,” said Mark Keese, editor of the report and head of the OECD’s employment division.

Employment conditions over the past three years have varied across member countries, largely due to different policies adopted by national governments. Countries that have relied on temporary contracts and stringent employment-protection provisions for regular workers have had weaker recoveries, the report finds.

“In the short term, an improvement in labor market conditions is largely dependent upon a broader economic recovery and is thus shaped by factors that labor market authorities cannot control directly,” Mr. Martin said.

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