World Unemployment Rising; Rates, Responses Vary

Published October 2, 2009

PARIS (AP) -- Unemployment is rising around the world as the recession leaves few corners untouched - but sharp differences remain between companies directly hit by financial or housing-market collapses and those that have deliberately protected jobs with expensive measures - including subsidizing shorter working weeks.

Unemployment rates in the 30 wealthy countries that belong to the Organization for Economic Cooperation and Development range from a low of 3.2 percent in the Netherlands to 17.6 percent in Spain, according to July figures.

In the developing world, the downturn has also taken its toll. Unemployment in Brazil appears now to be easing a bit, but Mexico in August posted its highest jobless rate in 13 years. In Africa, the continent's largest economy, South Africa, is in the grips of its first recession in 17 years and about a quarter of the population is officially without work.

The U.S. unemployment rate was 9.4 percent in July, above the European Union rate of 8.8 percent. By August, the U.S unemployment rate had ticked up to 9.7 percent, a 26-year high. On Friday, the Labor Department is due to release data for September and economists are forecasting the rate edged up to 9.8 percent. Most economists see U.S. unemployment topping 10 percent by early next year.

The speed of the increase in unemployment rates also varies, with countries like France starting with relatively high unemployment and shifting only slightly upward, and Britain and Ireland starting low but rising fast.

"There are quite significant differences across countries and regions," said John Martin, head of the OECD's employment, labor and social affairs division. "Quite a number of the countries which so far have not seen major increases in unemployment were countries that either have expanded short-time working schemes or introduced them in the first places."

But he noted such programs - where workers agree to fewer hours and the government helps make up the difference in their pay - may not be affordable for much longer.

The OECD expects the jobless rate in its 30 members to approach 10 percent in the second half of next year, meaning 57 million people out of work. If forecasts are correct, about half of those would have joined the jobless lines in the three years from the start of the downturn to the end of 2010.

Stefano Scarpetta, head of employment analysis at the OECD, said that the U.S. is historically quicker at reducing unemployment after a shock than Europe. But still, he said it could take three years or longer for the U.S. to return to pre-crisis levels.

Here is a look at unemployment rates around the world:

GERMANY - Unemployment edged up this year to 7.7 percent in July from an annual rate of 7.3 percent in 2008, but that was down from 8.4 percent in 2007, according to harmonized OECD data. Employment has been kept in check so far by government financial support for workers put on shorter hours in order to avoid mass layoffs.

FRANCE - The increase in French jobless lines has been somewhat tempered by short-work arrangements and government incentives such as exempting payroll taxes for some workers. The unemployment rate rose to 9.2 percent in July from 7.8 in 2008, according to the OECD. It is expected to hit 10 percent by the end of the year.

BRITAIN - Unemployment hit a nearly 13-year high of 7.9 percent in July. The number of people out of work looks on course to pass the three million mark next year as the impact of the recession translates to rising dole queues. However, the number losing their jobs has fallen from spring highs.

SPAIN - Spain has gone from being a European model for growth, creating more than a third of all new euro-zone jobs over the past decade, to having the region's highest unemployment rate. This stems mainly from the collapse of a construction boom and a credit-fueled consumer spending spree over the past two years.

The OECD charts the rise in unemployment as moving from 8.3 percent in 2007 to 11.3 percent in 2008 and 17.6 percent this July.

IRELAND - The story is similar in Ireland, where unemployment has surged from 4.6 percent in 2007 to 6 percent in 2008 and 13.3 percent in July.

KOSOVO - The Balkan nation is one of the poorest in Europe, and not a member of the OECD club. With stagnant growth, its unemployment rate was 46.3 percent in 2007, according to the International Labor Organization. That may include the so-called "gray economy," in which people are paid under the table.

JAPAN - Japan's unemployment rate actually dipped to 5.5 percent in August after reaching 5.7 percent in July, the highest level in Japan's post-World War II era, amid mounting job and wage cuts. Still, the total number of jobless in August rose 32.7 percent from a year earlier to 3.61 million. The number of temporary workers has surged in recent years, reaching around a third of the work force in the world's No. 2 economy. The plight of these workers, who with little job security have born the brunt of the recession, has stirred emotions in Japan.

CHINA - The official urban unemployment rate was 4.3 percent for the three months ended June 30 but the actual level could be more than double that because the government system ignores millions of migrant workers and employees who are furloughed by state companies but not recorded as laid off. As of June 30, there were 9 million registered unemployed people in an urban work force of 210 million, according to a spokesman for the Ministry of Human Resources and Social Security, Yin Chengji.

As many as 30 million migrants are believed to have lost jobs in export-oriented factories in late 2008, government officials said. Some are believed to have found work on construction projects financed by Beijing's stimulus but no figures have been reported.

INDIA - The picture is even less clear in India where the government does an official employment survey only about once every five years. Ninety percent of the work force is in the so-called informal sector.

MEXICO - Mexico's unemployment rate rose to 6.28 percent in August, the highest rate in more than 13 years, according to The National Statistics Institute. The jobless rate among the country's roughly 45 million workers was up from 4.2 percent in August 2008. President Felipe Calderon has announced reforms to ease red tape and lower costs for investors in public works projects to foster job growth. The government also started paying one-third of the salaries of automotive workers to curb layoffs at the plants.

BRAZIL - Unemployment in Brazil reached 8.1 percent in August, remaining stable over the last two months. The figure shows a drop in the jobless rate from its peak of 9 percent in March. Brazil emerged from recession in the second quarter of this year and analysts are now predicting the economy will expand slightly in 2009.

SOUTH AFRICA - The unemployment rate in South Africa hovered at 23.6 percent in this year's second quarter, according to the country's statistics office. That was up slightly from 23.1 percent in the April-June quarter of 2008, as South Africa is mired in its first recession since 1992.

The African continent as a whole was initially unscathed by the financial turmoil that roiled Europe and the United States. But the collapse of Western consumer demand has meant Africans are selling less of the commodities on which many of their economies depend.

 

 

Written by Associated Press

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