The International Labour Organization, a United Nations agency based in Switzerland, released its annual global-employment trends report Tuesday.
Developed countries have started to implement austerity measures that are hurting the labour market, Ekkehard Ernst, chief of the employment trends unit, told Postmedia News.
"As a group, in total, that creates this kind of negative feedback loop, whereby growth decelerates under the impression of global austerity and further depresses the situation, thereby triggering another round of austerity measures," Ernst said.
"This is obviously then having severe consequences for global labour markets and for labour markets in developed regions."
The International Labour Organization predicts that developed economies will see their combined unemployment rate rise to 8.6 per cent this year from 8.5 per cent last year. In a worst-case scenario, that unemployment rate could jump to 9.6 per cent by 2013, the group said.
"That would include Canada," Ernst said.
The International Labour Organization recommends that developed countries turn from austerity measures to stimulus efforts that would benefit not just their own countries, but also the broader global economy.
"What we, in particular, recommend is that countries should concentrate on measures like social security measures as they have been implemented in particular in Canada or the U.S., where there was an extension of unemployment benefits, and these measures should be continued or broadened if possible to make sure that the unemployment situation does not have such a negative feedback," Ernst said.
"The focus should be on jobs more than anything else."
Canada has planned cuts in its federal spending, with a special focus on public-sector wages and cuts to the operating costs of federal departments, according to the report. The projected consolidation period for these measures is 2010 to 2015.
Canada added 17,500 jobs in December, but the unemployment rate edged up to 7.5 per cent from 7.4 per cent in November as more people entered the labour market in search of work, according to Statistics Canada's most recent numbers. The gains followed 54,000 job losses in October and another 18,600 in November.
Economists had expected 20,000 jobs to be added in December.
The global economy has been weakening rapidly, the International Labour Organization report says, which is increasing the threat of a prolonged jobs recession.
The organization says that nearly 200 million people are currently unemployed. Globally, young people ages 15 to 24 are three times as likely as adults to be unemployed.
The agency challenged political and business leaders to create 600 million productive jobs over the next decade — a number the agency said would generate sustainable growth while maintaining social cohesion, but that would still leave 900 million workers living with their families below the poverty line, and mostly in developing countries.