Canada and other developed countries need to do more to boost productivity, protect workers and support those who are unemployed, according to an international report released Wednesday.
The report by the Organization for Economic Co-operation and Development, known as the OECD, also cautions that relying too much on temporary work is damaging to individuals and the economy.
While the unemployment rate in the OECD's nearly three dozen member countries drops as the economic recovery — slowly — produces more jobs, "large gaps remain in many countries with deep scars from the crisis" of 2008-2009 for those with and without jobs, Stefano Scarpetta, OECD director of employment, labour and social affairs, wrote in the Employment Outlook.
"The unemployed have borne considerable personal, economic and social costs that may prove to be long-lasting. This is especially true for those who have endured a long spell of joblessness, who are facing a depreciation of their skills and a risk of labour market exclusion," Scarpetta wrote.
"Among those who have kept their jobs, an increasing number of workers and their families have experienced economic hardship as a result of declines in the spending power of their earnings from work."
The group of 34 OECD countries includes Australia, Belgium, Canada, Chile, Demark, France, Germany, Greece, Japan, Korea, Turken, the United Kingdom and the United States.
The report comes as almost 45 million people are out of work in the OECD area. That's nearly 12 million more than before the global financial crisis.
More than one in three of those who are unemployed has been out of work for 12 months or longer. The size of this group has increased by 85 per cent since 2007, the report said.
"Long-term unemployment has probably peaked in most countries, but it remains a major source of concern," the OECD said.
The study calls on governments to put in place a range of policies to foster competition and productivity, help workers retrain and become more mobile, and shore up the incomes of low-paid workers.
These initiatives would help create more — and better quality — jobs, the OECD argues.
It also notes that while contract and temporary work can offer flexibility to employers, these workers face a higher degree of job insecurity.
Across OECD nations, the jobless rate fell to 7.3 per cent in June from a post-war high of 8.5 per cent in October, 2009.
On average across a range of OECD countries, half of all workers saw the real value of their earnings fall in 2010, the report said. In half of these cases, that was because inflation outpaced wage growth. But in the other half, it was because their earnings actually fell, likely because of reduced overtime pay and bonuses.
However, that so-called wage moderation did not translate to lower prices, the report noted.
"This is partly explained by the necessary efforts of many troubled firms to restore their profitability. But it could also reflect a lack of competition in markets for goods and services."
Governments should also make it easier for workers to move between sectors and firms, by developing programs that provide training and work experience, the report said.
"Even though public finances are squeezed in many countries, it is essential to provide funding for such programmes to ensure the economic recovery becomes a jobs recovery. This, in turn, could help reduce both income inequality and poverty," the report said.
The OECD study argues that mandatory minimum wages, now in 26 of the group's member countries, can help underpin the wages of low-paid workers.
Canada's Youth Employment Strategy, which provides subsidies to employers to create career-related summer jobs for students, gets a special mention in the 293-page report.
However, Canada is also one of only three countries, along with the U.S. and Israel, that has no regulations on the duration or renewals of fixed-term employment contracts, the report said.
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