Global recovery might be under way, but so long as unemployment remains elevated worldwide, recovery will remain fragile at best, a new report finds.
Since the recession shook economies around the world, most countries have returned to modest levels of growth. Sustaining that recovery, however, will require jobs for some of the more than 50 million who can't find work in the world's most developed economies, according to the Paris-based Organization for Economic Co-operation and Development's latest Economic Outlook report.
"This is a delicate moment for the global economy, and the crisis is not over until our economies are creating enough jobs again," OECD Secretary-General Angel Gurría said in a statement.
By the end of 2010, the average OECD nation's unemployment rate still remained close to levels reached at the peak of the recession, the report says. And in countries where unemployment has grown most severely, the short-term risk of reduced consumer spending will continue to threaten economic growth.
Over the long term, people who go long periods of time without employment are more likely not to gain new skills needed to work in their profession, become more discouraged and potentially withdraw from the labor market all together. Risk of this is greatest among young workers and those with limited skills, the report said.
Although America's employment situation has seen improvement in recent months, falling to 9.0 percent in April from 10.1 percent at its peak in in October 2009, that's not been the case across the board. In fact, among certain demographic groups, particularly teen workers, African Americans and Latinos, the situation remains gloomy as ever.
This, in turn, has driven consumer confidence down while intensifying other economic problems, most notably the state of the housing market, which has now all-but-officially double dipped.
Not everyone is sharing in the pain . Corporate profits hit an all-time high at the end of last year, and CEO pay itself jumped 11 percent in 2010, the Wall Street Journal reported this month.
The OECD report calls on governments to pay special attention to the relationship between training programs and existing jobs, reducing certain employment-related taxes and directing more employment-related law enforcement efforts toward those working temporary jobs.
Unemployment crisis or not, the world's gross domestic product is expected to grow 4.2 percent this year and by nearly 5 percent in 2012, according to the report. But expect growth in developing countries, most prominently India and China, to continue to outpace that of developed nations such as the United States.
Numerous issues also stand to threaten the continue recovery, though, most notably inflation, a weak housing market, economic slowdown in China and uncertain fiscal situations in the U.S., Japan and the Eurozone.
The OCED is a global think tank that researches and reports conditions in 34 developed economies, including the United States, but also monitors the developing world.