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Trade unions are seriously concerned about short and medium term employment prospects

04/07/2008

The OECD Employment Outlook, published on 2 July gives serious cause for concern. OECD unemployment is predicted to rise by 10 per cent to 34.8 millions in 2009. Worsening employment prospects and increasing unemployment come on top of a loss of income and purchasing power, in the face of increasing food prices and energy prices. Many working families will have to live on unemployment benefit, juggling rent or a mortgage payment with child care, food, and other expenditures.

According to the Employment Outlook the OECD forecasts that the fallout of the financial market turmoil will continue to act as a brake on growth in the OECD area for considerable time to come. GDP growth, which has started to slacken in the second half of 2007, is projected to slow further during the next two years in the OECD area, albeit with a differing impact across countries. The growth of real GDP is estimated to drop from 2.7 per cent in 2007 down to 1.6 per cent in 2009.

Employment growth, which continued moderately in 2007, is projected to slow significantly during the next two years. According to the projections for 2008 across the OECD area 33 million workers will be unemployed, up from 32 million in 2007. A further increase up to 34.8 millions is forecast for 2009. The aggregate unemployment rate across the OECD is predicted to increase from 5.6 per cent in 2007 to 6.0 percent in 2009. A particular strong increase of unemployment is expected to occur in the US where the unemployment rate is predicted to increase from 4.6 per cent in 2007 to 6.1 per cent in 2009. Against this background, the growth in real compensation per employee is predicted to slow in 2008 in the majority of OECD countries.

TUAC has urged governments to respond to the unfolding economic and financial crisis through a coordinated strategy for broad-based and diversified demand-side policies including support for middle and low income earners. The downturn is the appropriate time to bring forward targeted infrastructure programmes and measures aimed at reducing inequality and improving the environment.

Further information on the Employment Outlook is available to TUAC affiliates and partners on the members only section of this site.