Boosting jobs and skills - article

 

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Unemployment soared in the crisis, and creating jobs is now a major policy priority. But jobs alone will not be enough. A greater emphasis on skills will be needed for the recovery to last.

 

Alexandra managed to get back to work in Paris only three months after being made redundant in 2009. Impressive considering that the unemployment rate was over 10% at the time, one of the highest in the last two decades. And even more impressive given that Alexandra is 58, only two years younger than the age at which most French women retire from working.

 

But Alexandra's “exception française” may become the norm in the years ahead. The French government announced plans in 2009 to raise the minimum retirement age from 60 to 62 and the full pensionable age from 65 to 67. Despite widespread protests and strikes, which reflected public anxiety about the crisis more generally, the reforms were passed in November 2010. However, making people stay at work longer for a full state pension is only one part of the problem. The other is making sure they are able to keep working.

 

OECD analysis suggests that at the time of publication, unemployment had peaked in developed economies at 10%. But with the economic recovery still weak, private sector job creation remains feeble in most countries. And government spending cuts mean that the public sector cannot make up the gap because it is shedding jobs, too.

 

The short-term need to help the unemployed find work again is clear. Governments must also put in place longer-term policies to prepare for a fast-changing world.

 

For the crisis is likely to have changed the job market forever. Not only will people like Alexandra need to work longer, they will need to keep improving their skills too, both to stay in work and help firms improve their competitiveness.

 

The question is how. The past decade has already seen dramatic upheavals. The efficiency gains created by information technology have helped some firms thrive and boosted the growth of service industries. People acquired new strengths. But the rise in outsourcing has led to some of their skills and jobs being made redundant as manufacturing firms shifted out of the developed economies to lower their costs.

 

At the same time, over the last 30 years the proportion of adults with university degrees has increased significantly. On average across OECD countries, 35% of 25 to 34-year-olds have completed tertiary education, compared with 20% of 55 to 64-year-olds. This has been good for the economy overall but has presented its own problems.

 

Prior to the recession, firms in some specialist sectors such as engineering and information technology warned of shortages of skilled workers. In other areas, competition for skilled jobs increased and some people ended up in jobs for which they were overqualified.

 

The policy challenge for countries is how to better anticipate and respond quickly to changes in demand for new skills and new jobs. For adults, this means investing more in life-long learning, and in active programmes that help vulnerable groups, such as younger workers, mothers and ethnic minorities, find work and stay in the labour market. Lessons from countries such as Germany, where unemployment has actually fallen in the crisis, should be drawn.

 

Schools must also respond more quickly to changes in the jobs market. Teaching children to think outside the box and collaborate with others, even beyond national borders, will be needed as much as speaking a foreign language or using a computer.

 

Thankfully, there are plenty of countries with education systems that others can learn from. According to the latest OECD PISA survey, which tests the knowledge and skills of 15-year-olds, Korea has the best performing education system, closely followed by Finland. And these best-performing systems, which also include Canada and Japan, reflect students from various backgrounds, regardless of how well-off their parents are or whether they attend a private or state school.

 

According to OECD Secretary-General Angel Gurría, “Educational policies need to be based on a solid understanding, both of the development of skills, and also of how effectively economies use their talent pool, and of how better skills will translate into better jobs, higher productivity, and ultimately, better economic and social outcomes.” And that means better prospects for people like Alexandra too.

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