Many of those who finished school during the financial crisis years and since struggled to gain a secure foothold in the labour market are approaching a “make or break point” in terms of seeing an upward career trajectory in the future.
The research found that the long-term career prospects are largely determined by the first ten years of an individual’s working life. It also found that some of the more experienced workers who lost their jobs during the crisis have since had a tricky time getting their career back on track – those in the manufacturing and construction sectors for example, often had to switch careers, while adapting their skills in an effort to avoid being trapped on the margins of the labour market.
The report warned that if “the missing rungs are not put back into the jobs ladder, the legacy of the crisis is likely to include a further permanent increase in economic inequality above the already record high levels” that had been reached before the crisis in many OECD countries.
If immediate action isn’t taken, governments could be faced with a permanent increase in the number of workers stuck in chronic unemployment or moving back and forth between unemployment and low-paid jobs. This was a route to “ratcheting inequality up another notch” and needed to be addressed by policy makers, the report said.
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Around 42m people were without work in May 2015 across the OECS – still ten million more than just before the crisis, while unemployment is on a downward trajectory across most countries. There are significant differences between countries – the euro area has an unemployment rate of just over 11 per cent, while unemployment has fallen below six per cent in the US and under four per cent in Norway, Korea and Japan.
By the end of 2016, it is predicted that unemployment will have dropped to five per cent in the UK and the US, but will be sitting above 20 per cent for Spain and Greece.
Greece’s crisis has had predictably negative effects on its workers, with youth unemployment at around 50 per cent.
The overall employment rate for the UK was at 72.6 per cent – above the OECD average of 65.9 per cent, a “relative black spot” was the youth unemployment rate of 15.7 per cent.
Long-term unemployment is still “a major source of concern” as it can result in skill depreciation, withdrawal from the labour market and a loss of motivation. The report also warned of the stigma that can arise from those who have been struggling to find employment for a while. Across the OECD area, 15.7m had been out of work for at least a year during the last quarter of 2014. This group has increased by 77 per cent since 2007, with over half being jobless for at least two years.
The OECD said there was evidence to suggest a cyclical increase in unemployment had become structural, making it more difficult to tackle during a period of economic recovery.
Many countries cut back spending on helping unemployed back into work amid attempts to repair budget deficits after the crisis, and the report said policy makers needed to amend this. Carefully-determined minimum wages and improved skills trainings were among the policies encouraged.