Ministers responsible for employment from around the world gathered at the OECD on 28-29 September to discuss the jobs crisis. In our eighth OECD Observer ministers' roundtable, we ask six representatives, from Canada (co-Chair), Italy (co-Chair), Sweden (vice-Chair), France, New Zealand, and Chile, which is a candidate for OECD accession: What new policy actions are you taking to improve the jobs situation in your country?
Everyone needs to be sufficiently financially literate to take informed decisions for themselves and their families as to their savings, investments, pensions and more. But in many countries, women have lower financial knowledge than men, and are less confident in their financial knowledge and skills.
In the land of tabloid terrors, immigrants loom large. Flick through the pages or online comments of some of the racier newspapers, and you’ll see immigrants being accused of stealing jobs or, if not that, of being workshy and “scrounging benefits”.
Under the guild system in medieval Europe, a journeyman was someone who, having finished his seven-year apprenticeship, travelled from town to town offering his services for a day’s wages (hence “journeyman” from the French “journée”, meaning a day). After a few years of this itinerant life, he might submit a “masterpiece” to the relevant guild, whose members would evaluate his work and decide whether to admit him to the guild and confer the title of “master” upon him.
A welcome sense of cautious optimism is building around the preparations for the G20 summit in Saint Petersburg in September, setting the tone for policymakers to take a renewed interest in coordinating their national action agendas to address pressing global challenges.
The last few months have been marked by slightly better news on the economy, with signs of a recovery in the EU area in particular. But these are early days and challenges remain. John Evans, General Secretary of the Trade Union Advisory Committee to the OECD (TUAC), is not holding his breath. He explains why to the OECD Observer.
One of the biggest targets for reform in the pursuit of leaner government budgets is public sector pay and performance. Because of the crisis, some countries have frozen or even reduced salaries, while others have preferred to reduce benefits, even pensions. Others have decided to do nothing for the moment.
Job losses can prove costly for individuals, as well as to society. Financial distress, for example, can lead to health problems and crime. While policies like unemployment benefits, job-search assistance and skills training can help ease the personal impact of job loss, they can be expensive. Consequently, governments also turn to policies that protect employees from losing their jobs in the first place.
Making labour markets inclusive
In this time of chronic unemployment, it is all too easy to lose sight of the single greatest trend underlying the long-term labour market: the demographic time bomb in the developed world. Indeed, the defining employment challenge of the future will be not the surplus, but the shortage, of appropriate labour.
Few countries have suffered the scourge of high youth unemployment as much as Spain has. There, the unemployment rate for under 25-year-olds exceeded 50% in 2012, nearly three times the OECD average. However, the crisis has not been the only cause of this; in fact, high rates of youth unemployment are not a recent phenomenon in Spain.
Larry Page and Sergey Brin were young doctoral students when they created the company we now know as Google. Virgin’s Richard Branson started out in business as a teenager selling records. These big names are just part of a long list of young entrepreneurs that made it in business, a list that could include the founders of Facebook, e-Bay, France’s Free telecom and more.
How can we increase employment and strengthen social cohesion? The prime minister of Norway argues that we need urgent action to ensure that an entire generation of young people remains connected to the labour market. We must also address the issue of income distribution to protect the vulnerable and guarantee greater equality of opportunity across our societies.
Growth is not enough
Brazil’s labour leaders have long argued against pursuing economic growth for its own sake. What matters most, they believe, is not the size of the economic pie but how it’s carved up. In recent years, calls for social justice have increasingly informed policy in Brazil, bringing about a veritable “revolution” in the economy.
Give youth a chance
Young people are being excluded from economic life by a combination of joblessness and barriers to the creation of start-ups. Unleashing the energy, entrepreneurial spirit and technological genius of the young is not just a moral imperative, but an economic necessity.
The current crisis has continued to affect people’s lives across the world, and nowhere is this more evident than in the deteriorating labour market in many countries. Young people have been hit particularly hard and risk being permanently scarred from joblessness and even exclusion.
Education for all
Young people from poorer families are badly underrepresented in higher education. That risks exposing them to a lifetime of reduced earnings and undermines the foundations of wider economic growth. What can be done? Economically disadvantaged students benefit from a mix of grants and loans in third-level education, but they also need better support from the earliest years of their school careers.
The forces driving Asia’s rapid growth–new technology, globalisation, and market-oriented reform–are also fuelling rising inequality. Some income divergence is inevitable in times of fast economic development, but that shouldn’t make for complacency, especially in the face of rising inequality in people’s opportunities to develop their human capital and income-earning capacity.
The new performance frontier
By helping emphasise the importance of a “better life” as a key component of societal progress, the OECD has made considerable efforts in recent years to help promote a school of thought that places people’s well-being at the heart of economic growth. After examining the issue of growth and productivity gains, and recognising the question of the environmental cost of our economic activity, the time has come to turn our attention to another area that is equally crucial: fostering a more human economy.
Knowledge is growth
The growing awareness that knowledge-based capital (KBC) is driving economic growth is prevalent in today’s global marketplace. KBC includes a broad range of intangible assets, like research, data, software and design skills, which capture or express human ingenuity. The creation and application of knowledge is especially critical to the ability of firms and organisations to develop in a competitive global economy and to create high-wage employment.
Translators are at the forefront of global communications and knowledge. Yet their work has not always been helped by the information revolution. Here are the challenges.
You paint a positive picture of Turkey’s economy in terms of growth of GDP and employment (OECD Observer No 290-91, Q1-Q2 2012). Nevertheless, the interview states that for the future of the Turkish economy, “labour market reform is key, especially to encourage the shifting of resources from the informal to the formal sector: a more flexible labour contract is needed and minimum wage setting should be decentralised”
High female participation in the workforce has a decisive effect on a country’s performance, as Norway shows.
A weekly catch from behind the headlines on oecd.org, No 1
Leaders et the OECD; Jobs; Spanish bull; Web sense; Fish
Two years after Israel joined the OECD, Sharon Kedmi, Director General at the Ministry of Industry, Trade and Labor, is leading a delegation to an important OECD Employment Labour and Social Affairs Committee meeting on 26 October. He spoke with the OECD Observer.
Young, skilled, well-educated, well-travelled and yet jobless: these are the characteristics of the so-called “lost generation”. The challenges young people in Europe face today are many, and vary from region to region and from person to person. Many are facing high levels of unemployment; some need to fight for their basic freedoms; others for their right to build up representative youth structures, or face different types of discrimination. There are plenty of indignados out there!
As technology progresses, so do labour market needs. For economies today, maintaining competitiveness means that skills must adapt and keep pace.
The latest phase of the economic crisis presents a dilemma: many governments judge it necessary to enter a phase of fiscal austerity while unemployment remains intolerably high, a high risk combination. AFL-CIO President Richard Trumka calls for a different way forward.
Among the employment challenges exacerbated by the economic crisis, long-term joblessness and youth unemployment are especially troubling as their effects can linger long after the job market has recovered.
Governments would do well to focus on these problems now.
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