ECJ EUROPEAN Cleaning Journal

Youth unemployment is now such a serious problem in developed economies it has prompted the Organisation for Economic Co-operation and Development (OECD) to call for more government intervention, which could include paying businesses to employ young people.

It said governments should not roll back minimum welfare schemes and should reallocate, where possible, budgets towards programmes designed to get people back to work.

Launching its 2013 employment outlook, the OECD said joblessness was likely to remain high in its 34 developed member states through most of next year. But there is a particular concern about youth unemployment.

"We are pushing for bold action to stimulate job creation for young people, even unorthodox measures that you don't necessarily consider in normal times, like some subsidies for hiring at companies," Stefano Scarpetta, head of employment policy told Reuters.

There are already about 48 million people out of work across the OECD's members. It forecast that the unemployment rate would hit eight per cent this year before easing only slightly to 7.8 per cent next year.

However the outlook diverged widely with the unemployment rate set to keep rising in Greece to 28.2 per cent next year and Spain seeing its jobless rate rise to 27.8 per cent in 2014, the highest in the OECD.

The report says that unemployment is likely to rise in most eurozone countries, with Germany, where jobs figures are expected to see a slight increase, a notable exception.

With many countries still struggling to recover from the 2008-2009 financial and ensuing economic crisis, the OECD said there were more and more long-term unemployed people who increasingly risked losing their rights to jobless benefits.

Because the youth, defined as 15 to 25 year-olds, often have little or even no benefits to start with, the situation has become particularly dire for them.

EU leaders, who have made the fight against youth unemployment a priority, agreed last month to set aside around €8 billion for jobs and training, even as they admitted that the labour market would only improve substantially once the crisis-hit region returns to growth.

The OECD urged governments to resist resorting to early retirement schemes in hope of reducing youth unemployment, which it said had little benefit but bore heavy costs.