Employment

Preventing the jobs crisis from casting a long shadow

 

Opening remarks by Angel Gurría, OECD Secretary-General, delivered at the Labour and Employment Ministerial Meeting 2009

 

OECD Paris, 28 September 2009

 

Ladies and Gentlemen, distinguished Ministers,

It is a great pleasure for me to welcome you all at the OECD for our Labour and Employment Ministerial Meeting. I would like to welcome particularly Ministers and senior representatives from the five accession countries and from Brazil, India and South Africa.


This year, we are delighted to have Mr. Maurizio Sacconi, Minister of Labour, Health and Social Policies of Italy and Mrs. Janice Charette, Deputy Minister of Human Resources and Skills Development of Canada who will assume jointly the chairmainship of the meeting. I would also like to greet warmly Mr. Sven-Otto Littorin, Minister for Employment of Sweden who will be our Vice Chair.  I am also pleased to welcome my friend Mr. Juan Somavia, head of the ILO, with whom we have shared tasks to help member governments to tackle the jobs crisis.


Our meeting comes at an important time. Leaders at the G20 Summit in Pittsburgh last week expressed their strong commitment to “implementing recovery plans that support decent work, help preserve employment and prioritise job growth”. They are looking at all of us to provide concrete responses to the many who have lost their jobs and those who are at risk of sliding into poverty and exclusion. This is a global crisis that requires a close cooperation among countries and I am glad to see this large representation at our meeting today. This Ministerial will be a stepping stone for the meeting of Labour and Employment Ministers that the G20 has called for January this year. I am sure that our discussions and conclusions will provide valuable inputs to continue advancing solutions for the most difficult problem we have. 


The numbers of the jobs crisis are staggering. From a 25-year low at 5.6% in 2007, the OECD unemployment rate had risen to a post-war high of 8.5% in July 2009, corresponding to an increase of more than 15 million unemployed. Our colleagues from the ILO estimated that many more jobs have been lost in developing and emerging economies and many workers and their family are at risk of sliding into extreme poverty.


Although the job losses have affected all social groups, as ever, it is the disadvantaged people in the labour market – youth, low-skilled, immigrants, ethnic minorities and those on temporary contracts – who have borne the brunt.  Youth unemployment has increased at a much faster pace than adult unemployment:  In many OECD countries one in four youth in the labour market is jobless. Immigrants have been hard hit as well; they loom large among those on temporary and precarious jobs and these have been the first jobs that have disappeared. And in emerging economies many workers had to move into more precarious and low paid activities and are facing a serious risk of poverty. 


All is not gloom and doom. A global recovery is in sight.


In the advanced economies, the recovery is likely to be modest for some time to come and still be driven by policy stimulus. The outlook for emerging economies is much better but, going forward, it is also linked to the ability of advanced trading partners to strengthen their recovery. We also know that the creation of productive jobs tends to lag significantly behind the recovery in output and thus unemployment and under-employment is likely to continue rising in many of our countries in the months to come. 


Over the past year, we have seen an unprecedented global effort dedicated to curing the financial crisis and boosting aggregate demand. This global effort has worked.


A similar effort must also be afforded to beating the jobs crisis in our countries and to prevent persistent unemployment from casting a long shadow over people’s welfare and from damaging the social fabric of our countries. The OECD has released two weeks ago its annual Employment Outlook that is largely devoted to the jobs crisis and provides a solid background for the policy debates on how best to promote the jobs recovery. And we stand ready to continue our monitoring of the crisis and assessment of the policy response, also in collaboration with the ILO. 


A first priority is to limit the number of lay-offs. Governments have already acted with large fiscal stimulus packages. We estimate that these packages will have created or saved between 3.2 and 5.5 million jobs in 2010 in the 19 countries included in our analysis.


Most OECD and many emerging economies have introduced targeted measures to support labour demand. These include short-term working subsidies to compensate workers for working fewer hours, targeted subsidies to encourage firms to hire vulnerable workers and public work schemes as well as temporary cuts in employers’ social security contributions.

 

These subsidies are playing a positive role, but they have to be temporary and well-targeted to the most vulnerable workers. Otherwise, these schemes risk becoming an obstacle to the recovery.


For those who have lost their jobs, the first line of defence is to secure adequate social safety nets. Where coverage of such benefits was weak, efforts have been made to extend it. As many job losers and low income families are outside the reach of traditional safety nets in many developing and emerging economies, there is an urgent need to scale up transfer programmes to needed households. In particular, targeted income support to low-income households with children conditional on school attendance or health care can help to address the additional income support needs.


Even in a deep recession many jobs are created by firms that are able to exploit new market opportunities. Employment services can play a decisive role in helping fill these vacancies quickly. Job counselling, training and employment incentives have increased too modestly compared with the magnitude and pace of the job losses.

Re-employment services need to be adjusted. Increased training opportunities for those at high risk of long-term unemployment are particularly important, since the global economic crisis is accelerating structural changes, including significant shifts towards a low carbon economy and the associated green technologies. Further investment in human capital, skill formation and lifelong learning is another key action to guide job seekers towards new growth areas, including green jobs.

We are ready to contribute to the skills development strategy indicated by the G20 Leaders in Pittsburgh, also drawing from a number of ongoing activities, the PISA surveys of 15-years-old; the Programme for the International Assessment of Adult Competencies (PIAAC (Programme for the International Assessment of Adult Competencies) ); the New Skills for New Jobs projects and, last but not least, the Green Growth Strategy project that will devote a significant attention to the role that labour market and social policies can and should play in assisting workers over the transition period to a low-carbon economy.


Reducing high youth unemployment should be a centrepiece of our policies.  We cannot allow this crisis to result in a lost generation. Job-search assistance, training opportunities and programmes to prevent dropping out of school, subsidies for apprenticeship contracts for unskilled youth, and second-chance schools, are even more critical at this juncture.


Ministers, ladies and gentlemen,

Our session this afternoon and the programme of tomorrow represent a unique opportunity to compare experiences in responding to the jobs crisis and discuss how best to intervene in the months to come to prevent unemployment and under-employment from casting a long shadow on our countries.


It will give us the chance to discuss how to co-ordinate approaches to the jobs crisis and lay the foundation for strong, sustained and balanced growth. The OECD is ready to support a global response to this challenge, by also taking into account the plight of those in the developing world that often can’t benefit from well developed social protection systems. They should not be forgotten.


These are difficult challenges.  I look forward to our discussion during our meeting to find ways to tackle them successfully.


Thank you.

 

 

 

Countries list

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