Report cites continuing unemployment benefits will curve a U.S. low-skilled workforce

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A recent report from the Organization for Economic Cooperation and Development  (OCED) recommends state and federal legislative bodies continue extending unemployment benefits, to curve long-term unemployment.

The OECD, headquartered in Europe is an international organization that “promotes policies that will improve the economic and social well-being of people around the world”, its’ website cites.

In their report, “Persistence of High Unemployment: What Risks? What Policies?,” the OECD said that continuing federal unemployment benefits, set to expire in January 2012,  could prevent the unemployed  from entering other benefit systems –including welfare and disability programs- which they would be less likely to exit.

“In the meantime benefits should be made conditional on recipients satisfying job-search requirements and, where benefits are relatively high, they could be made declining with duration,” the OECD states.

In the U.S., the long-term unemployed job seekers make up 8.8 percent of the unemployed population, according to the OECD. The group cites that impacts of high unemployment rates in the U.S. would lead to longer-term issue, impacting economic outlook, of an low-skilled workforce.

“(Long-Term joblessness) could eventually result in discouragement and permanent withdrawal from the labor force, especially for young and low-skilled workers,” the OECD reports. “The case can be made for maintaining the extension until labor-market prospects have sufficiently improved to prevent individuals from falling into persistent poverty.”

Any extension of jobless benefits needs to be coupled with incentives and training measures to help people get back to work lest the unemployed “lapse into dependency,” according to the report. Career skills retraining programs to end joblessness, has also been recommended as recent as October 10, 2010, by Washington, D.C. advocacy organization, the Economic Policy Institute.

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