The price that will be paid for the failure of the Group of 20 to agree on a policy to stimulate the world economy was spelled out in Rome overnight in aspeech by Angel Gurría, the OECD Secretary-General:
This meltdown is rapidly turning into a jobs and social crisis. Labour market conditions are weakening throughout the world, as companies are cutting production, closing factories and dismissing workers. Our latest projections (to be released officially tomorrow) indicate that the unemployment rate in the OECD area could approach 10% by 2010 compared with 5.6% in 2007. This implies that the crisis could swell the rank of the unemployed in the OECD by about 25 million people, by far the largest and most rapid increase in OECD unemployment in the post-war period.
And the job crisis is spreading rapidly around the world. The International Labour Organisation estimates that world-wide unemployment could increase by 40 million people by the end of this year.
The most disadvantaged labour-market groups — youth, low-skilled, immigrants and temporary workers — are already bearing the brunt of the rapidly rising unemployment. They are the first to lose their job and tend to have only limited access to social safety nets. And since they also face serious difficulty in finding a new job, they run the risk of becoming long term unemployed or discouraged.
Restoring global growth is an economic and political priority, but also an ethical, moral, social and human imperative.
Meanwhile, back in London, the officials of the G20 countries are unable to reach agreement on any specific policies to avoid the gloomy prediction of Mr Gurria from coming true.