OECD unemployment rate has not recovered from recession, latest figures show

The effects of the financial crisis on the labor market are still being felt, according to a report from the OECD.

The organization’s annual Employment Outlook report shows that 42 million people in the OECD’s 34 member states are unemployed. This is down from 45 million a year ago, but is still 10 million more than before the crisis.

The report also found that of those unemployed, 15.7 million have been out of work for 12 months or longer. This is an increase of 77.2% before the end of 2007.

The prevalence of part-time work has also increased, with over 20% of workers now working shorter hours—an increase of two percentage points since before the crisis—partly because, in some countries, fewer full-time jobs are available. Meanwhile, wage growth remains low at 0.5%, compared to 1.8% in the period 2000–2007.

OECD Secretary-General Angel Gurría commented that: “Time is running out to prevent the scars of the crisis becoming permanent, with millions of workers trapped at the bottom of the economic ladder. If that happens, the long-run legacy of the crisis would be to ratchet inequality up yet another notch from levels that were already far too high. Governments need to act now to avoid a permanent increase in the number of workers stuck in chronic joblessness or moving between unemployment and low-paid precarious jobs.”

IZA World of Labor author Rainer Winkelmann has written about the effect of unemployment on happiness. Noting that “a country’s loss of welfare from unemployment goes well beyond the associated income loss”, he argues that employment policies must take the impact on personal life satisfaction into account.

The OECD Employment Outlook 2015 can be found here.

Related articles:
Unemployment and happiness by Rainer Winkelmann
Unemployment benefits and unemployment by Robert Moffitt
Unemployment benefits and job match quality by Konstantinos Tatsiramos