OECD urges reforms to stem unemployment

COUNTRIES THAT have failed to cut high levels of unemployment, most notably France and Germany, will come under attack in a new report due to be published by the Organisation for Economic Co-operation and Development (OECD).

Officials from the influential think-tank will present their conclusions to ministers gathering in Paris for its annual meeting today and tomorrow.

The report concludes that countries such as the UK, which started to reform their jobs markets in the 1980s, have experienced rising employment and falling joblessness.

High unemployment countries on the Continent, however, were slow to introduce reforms, and these must be applied "comprehensively and in a sustained manner to achieve lower unemployment".

The OECD emphasises the importance of structural reforms, rather than just looser macroeconomic policies, to create jobs.

High on the list of recommendations in the report, a follow-up to the organisation's massive 1994 Jobs Study, are eliminating barriers to starting new companies, making working practices more flexible and abolishing employment protection policies that discourage companies from creating jobs.

The report also singles out the need to ensure that minimum wages for young people are not set too high, vindicating the UK Government's controversial decision to set a lower rate for young people. "Wage floors should not be set so high as to block youth from entering the labour market," the report says.

However, the new Jobs Report also looks at policies to combat the marginalisation of certain groups such as single mothers or the unskilled. It supports in-work benefits to ensure that finding work pays off for the low-skilled.

Ministers will discuss a range of trade issues at the meeting, which offers EU and US negotiators a chance to continue informally with talks about the disputes over US beef imports into Europe and Japanese steel imports to the US. Discussions on the new trade liberalisation round will also take place.