The plight of youth unemployment in developed economies is so severe it has prompted the OECD to call for more government intervention, possibly including paying companies to hire.
It also said on Tuesday governments should not roll back minimum welfare schemes and reallocate, where possible, budgets towards programmes designed to get people back in work.
Unveiling its 2013 employment outlook, the Organisation for Economic Cooperation and Development (OECD) said joblessness was likely to remain high in its 34 developed member states through most of next year. But speaking to Reuters after the report's release, the group's head of employment policy, Stefano Scarpetta, warned particularly of growing emergency over youth unemployment.
"We are pushing for bold action to stimulate job creation for young people, like some subsidies for hiring at companies," Scarpetta said.
There are already 48 million people out of work across the OECD's members. It forecast the unemployment rate would hit eight per cent this year before easing only slightly to 7.8 per cent next year.
However, the outlook diverged widely with the unemployment rate set to keep rising in Greece to 28.2 per cent next year and Spain seeing its jobless rate rise to 27.8 per cent in 2014, the highest in the OECD. "By the end of 2014, unemployment is expected to be just over 11 per cent in France, around 12.5 per cent in Italy," it added.
With many countries still struggling to recover from the 2008-2009 financial and ensuing economic crisis, the OECD said there were more and more long-term unemployed people who increasingly risked losing their rights to jobless benefits.
Because youth often have little or even no benefits to start with, the situation has become particularly dire for them. Youth unemployment rates in Greece and Spain are near 60 per cent and economists increasingly see the problem as a top risk for the future of Europe along with the weakness of its banks, according to a recent Reuters poll.
EU leaders, who have made the fight against youth unemployment a priority, agreed last month to set aside around ^8 billion for jobs and training, even as they admitted that the labour market would only sustainably improve once the crisis-hit region returns to growth.
The OECD urged governments to resist resorting to early retirement schemes in hope of reducing youth unemployment, which it said had little benefit but bore heavy costs.
In the US, however, the jobless rate is expected to decline to less than seven per cent by the end of next year. The level stood at 7.6 per cent in May 2013. Meanwhile, the unemployment rate in Germany is anticipated to be below five per cent by the end of next year from 5.3 per cent in May 2013.
"In many OECD countries, job losses and earnings losses have been concentrated in low-skilled, low-income households more than in those with higher skills and incomes," the statement said. On the other hand, in large emerging economies, employment was less affected by the crisis but many workers remain trapped in low-paid, insecure jobs with little social protection, it added.
Noting that the social scars of the crisis are far from being healed, OECD Secretary General Angel Gurria said many countries in the region continue to struggle with high and persistent unemployment, particularly among youth.