The Organisation for Economic Cooperation and Development is warning governments that unemployment rate in OECD countries could reach a new post-war high of 10% if economic recovery fails to gain momentum.

“Employment is the bottom line of the current crisis. It is essential that governments focus on helping jobseekers in the months to come,” says OECD Secretary-General Angel Gurria during the launch of OECD’s Employment Outlook 2009.

Gurria argues for a co-ordinated policy response to the crisis and urges policy makers not to forget the plight of those in the developing world that often can not benefit from well-designed social protection systems.

According to the OECD, unemployment in most countries will rise further next year and remain high for the immediate future, despite early signs of economic recovery. The unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%, with 57 million people out of work.

In light of this, the OECD report says that governments must urgently reassess and adapt their labour market and social policies in order to prevent people from falling into the trap of long-term unemployment.

Most OECD countries have introduced measures to support labour demand. These include temporary cuts in employers’ social security contributions and short-time working subsidies to compensate workers for working fewer hours or to encourage firms to hire. In the short-term, the OECD acknowledges that these measures are playing a positive role.