OECD maintains jobs drive

FROM PAUL WALLACE

in Paris

Despite the best endeavours of the American and Japanese to hijack the occasion, the Organisation for Economic Co-operation and Development sought at the annual meeting of ministers to keep up its drive to bring down unemployment.

Its report seems certain to be seized upon by the Government and the Opposition to score points against each other.

The OECD says unemployment in most countries "continues to ratchet up" and even when the current cyclical recovery is complete, the unemployment rate will still be seven per cent or more within the OECD and is likely to be nine per cent in OECD Europe in the year 2000.

The report calls for action on three fronts: stable macro-economic policies, structural reform of labour markets and improved education and training.

With Labour pinning its colours to the mast of macro-economic stability, it will not be put on the defensive by the recommendations. Even so, the Conservatives will be able to point to the priority attached to cutting Government spending.

In particular, the OECD endorses the drive to improve public sector efficiency, says that "a fundamental reassessment of social transfers" is required in many countries and favours accelerating health-care reforms to control costs.

The Government will not be slow either to commandeer the OECD's line on structural reforms to the labour market. The report calls for greater wage flexibility and is critical of high statutory minimum wages which "can make it very difficult for youths and other low skilled workers to price themselves into the labour market".