[OPE] Twenty-five million jobs vanishing, and that's only in the OECD

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Wed Sep 16 2009 - 09:32:46 EDT

PARIS (Reuters) - The economic downturn will likely cost as many as 25
million people their jobs by end-2010 as the unemployment rate nears a
record 10 percent in the OECD group of countries, according to a report
released on Wednesday. The Organization for Economic Co-operation and
Development said 15 million jobs were lost between end-2007 and July 2009
and 10 million more could go by the end of next year despite signs the
economy is picking up. "A major risk is that much of this large hike in
unemployment becomes structural in nature," the report said. "The world
economy is indeed recovering. We've thrown trillions and trillions and
trillions at it and of course we're seeing results," OECD Secretary General
Angel Gurria said. "(But) employment is the bottom line of the current
crisis. We cannot claim victory because we see economic indicators going up.
We should not assume that (renewed GDP) growth will take care of this," he
told a news conference. (...) This downturn is destroying considerably more
jobs than other recessions since the early 1970s, the report says.

Quite so. Can unemployment be mitigated by job mobility?

Evidence from internationally harmonised data on gross job flows (i.e. job
creation and destruction by firms) and gross worker flows (i.e. hirings and
separations) suggest that, each year, more than 20% of jobs are created
and/or destroyed on average in OECD countries, and around one third of all
workers are hired and/or separate from their employer. However, job and
worker flows are remarkably different across countries, industries and
worker types. In countries such as the United States and the United Kingdom
gross job and worker flows are almost twice as large than in most
continental European countries. The process of reallocation appears to be
productivity-enhancing: job destruction is greater in older, less efficient
firms and job creation is greater in young, more efficient firms in most
(this last statement is not proved and probably not generally true).

But, in fact, job mobility sharply declines in the recession.

A country like Britain nowadays has a population of about 61.5 million
living in about 25.5 million households carrying a grand average personal
debt of 57,137 pounds (=US$94,234) per household, but in fact with 2.47
million officially unemployed in a labour force of 31 million (27.5% of the
working-age population does not work) there are now 3.3 million "workless"
households, meaning households in which none of the occupants work for a
living in a tax-recognized occupation. Presumably workless or near workless
households carry little personal debt, meaning that the personal debts of
the other households must be significantly greater. That's roughly one in
every eight households workless. 70% of homes are owner-occupied and 30%
rented. There are nearly 12 million UK citizens at state pension age
occupying circa 5 million households or a bit less, so many pensioners must
in fact be working, while many working-age people are not. If you unpack the
data more, it turns out that British society no longer rewards work in any
consistent way at all - some are "rentiers of property" and others are
"rentiers of the state" (beneficiaries), and the dispersion of incomes is
rapidly increasing. It all adds up to more and more people working for less
income, which is the absolute law of rentier capitalism.

A Brit quipped to me once candidly, "I did not get to where I am today, by
working", and I can see what he means!


Now that ain't workin' that's the way you do it
You play the guitar on that MTV
That ain't workin' that's the way you do it
Money for nothin' and your chicks for free
We got to install microwave ovens
Custom kitchen deliveries
We got to move these refrigerators
We got to move these color TV's

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