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OECD Raises Red Flag on U.S. Long-Term Unemployment

Reuters (06/26/12) Lucia Mutikani

The Organization for Economic Cooperation and Development says training programs are necessary to diminish the impact of long-term unemployment on the U.S. economy. The report from the Paris-based organization indicates that long spells of unemployment could boost structural unemployment, which it believes is close to 6% right now, by eroding workers’ skills and lessening their attachment to the labor force. According to the OECD, “Education and training are key to improving skills, (and) reducing mismatches between employer needs and work force skills.” To lessen jobless workers’ reliance on unemployment benefits, the OECD recommends programs that make them aware of job opportunities and assist in job searches, noting that the U.S. does not spend enough on re-employment services compared with other OECD countries.