OECD calls for action on jobs

THE ORGANISATION for Economic Co-operation and Development yesterday urged its 24 industrial member states to prepare a package of policies to bring down unemployment.

The group's latest Employment Outlook warned that unemployment in the industrial world would climb by 2 million this year to a peak of 30 million. Next year's sluggish recovery was expected to result in a jobless decline of little more than half a million.

'There is no single answer,' the OECD said. 'Neither labour market policies alone, nor macro-economic policies taken by themselves, nor education, training or social policies on their own can provide the answer.

'This can only be done through a package of policies, where each contributes its part and reinforces the other.'

The OECD has developed a framework, adopted by the leading industrial countries, recommending a medium-term shift away from measures that generate income dependency among the unemployed towards those that mobilise labour supply, foster economic opportunity, improve labour market efficiency and develop skills.

It warned that the impact of the recession on unemployment was compounded by persistent structural problems - such as long- term unemployment and skills shortages - in the labour markets of industrial countries.

Labour market problems are now being recognised by governments as fundamentally structural in origin even though they have been worsened by the current recession.

'They are expressions of persistent difficulties in adjusting rapidly and smoothly to structural changes in demography, technology, trading patterns and consumer tastes,' the OECD said.

But policy measures aimed at redressing short-term problems were often self-defeating in the longer-term, the OECD warned, postponing necessary adjustments in the labour market and perhaps creating new market rigidities.

It urged less government interference in the labour market itself, but more active policies in encouraging the search for work and in retraining.

'The minimum competence required at work has risen,' it said, and 'skill obsolescence is increasingly prevalent.'