OECD: Rising employment overshadowed by unprecedented wage stagnation

04/07/2018 – Economic growth is picking up and unemployment has reached record lows in some OECD countries but wages continue to stagnate. Unless countries can break this cycle, public belief in the recovery will be undermined and labour market inequality will widen, according to a new OECD report.

This story is brought to you in association with the Organization for Economic Cooperation and Development, OECD

 

The OECD Employment Outlook 2018 says that the employment rate for people aged 15-74 in the OECD area (36 countries) reached 61.7% in the OECD area at the end of 2017. For the first time there are more people with a job today than before the crisis. The employment rate in the OECD is expected to reach 62.1% by the end of this year and 62.5% in the fourth quarter of 2019. Some of the strongest improvements occurred among disadvantaged groups, such as older workers, mothers with young children, youth and immigrants.

Unemployment rates are below, or close to, pre-crisis levels in most countries. Job vacancies have also reached record highs in Japan, the euro area, the United States and Australia. The OECD unemployment rate is predicted to continue falling, to reach 5.3% at the end of 2018 and 5.1% the following year. Yet the picture continues to be mixed in terms of jobs quality and security, while poverty has grown among the working age population, reaching 10.6% in 2015 compared to 9.6% a decade earlier.

Wage growth remains remarkably more sluggish than before the financial crisis. At the end of 2017, nominal wage growth in the OECD area was only half of what it was ten years earlier: in Q2 2007, when the average of unemployment rates of OECD countries was about the same as now, the average nominal wage growth was 5.8% vs 3.2% in Q4 2017.

More worryingly, wage stagnation affects low-paid workers much more than those at the top: real labour incomes of the top 1% of earners have increased much faster than those of median full-time workers in recent years, reinforcing a long-standing trend.

“This trend of wageless growth in the face of a rise in employment highlights the structural changes in our economies that the global crisis has deepened, and it underlines the urgent need for countries to help workers, especially the low-skilled,” said OECD Secretary-General Ángel Gurría, launching the report in Paris. “Well-targeted policy measures and closer collaboration with social partners are needed to help workers adapt to and benefit from a rapidly evolving world of work, in order to achieve inclusive growth.”

Low inflation and the major productivity slowdown have contributed to wage stagnation, as well as a rise in low-paying jobs. The Outlook notes a significant worsening in the average earnings for part-time workers relative to full-time workers. Declining coverage of unemployment benefits in many countries and persisting long-term unemployment may also have contributed. Fewer than one-in-three jobseekers receive unemployment benefits on average across the OECD, and the longer-term downward trend of benefit coverage has continued in many countries since the crisis.

Countries should develop high-quality education and training systems that provide learning opportunities throughout the life course, says the OECD. Evidence suggests that the low skilled are three times less likely to receive training than high-skilled workers. More needs to be done to overcome this gap, as highlighted in the recently launched Policy Framework for Inclusive Growth, with better targeted training measures for workers at risk of becoming trapped in low-wage, low-quality jobs or in joblessness, together with a greater involvement of employers, especially in small and medium-sized enterprises that struggle to offer training.

New evidence in the Outlook shows that co-ordinated collective bargaining systems, with strong and self-regulated social partners and effective mediation bodies, contribute to high levels of employment, a better quality work environment, including more training opportunities, and greater resilience of the labour market to shocks.

This year’s Outlook includes analysis of how labour market gender inequalities evolve over the career of men and women. Even if the gap in annual average labour income between men and women has fallen significantly, women’s annual labour income was still 39% lower on average than that of men in 2015 across the OECD. This measure takes account of gender differences in participation, as well as of hours worked and hourly earnings when employed.

Much of this gap is generated in the first half of women’s careers, the report finds. Family policies, measures to encourage behavioural changes and actions promoting changes in the workplace, such as increased take-up of flexible working time arrangements by both fathers and mothers, would help create more inclusive career paths for both men and women.

The report and country notes available for Australia, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the United Kingdom and the United States, are available at http://www.oecd.org/employment/oecd-employment-outlook-19991266.htm.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Find unity ‘to halt Libya’s senseless unraveling’, UN envoy urges Security Council

Drones, disinfectant, distancing – Europe’s beaches open up

Syria: Guterres concerned over reported attacks in Idlib, calls for ‘full investigation’

The needs, challenges and power dynamics of refugee resettlement

Global Europe: MEPs back EU external cooperation funding instrument worth €79.5 billion

A more credible, dynamic, predictable and political EU accession process – Commission lays out its proposals

Commission disburses €14 billion under SURE to nine Member States

Belgium: keep up reforms to increase employment and productivity growth

The importance of including palliative care in the Universal Health Coverage and how to achieve it

How governments and mobile operators are easing network congestion during the COVID-19 crisis

UN condemns deadly attack against G5 Sahel force headquarters in Mali

Comprehensive listening: a tool to humanize Primary Healthcare and medical specialties

Landmine casualties high for third consecutive year despite record funding, latest monitor reports

Banks launch green charter to help shipping reduce its carbon footprint

Security Council must ‘come together’ to address the plight of children trapped in armed conflict, says UN envoy

3 ways AI will change the nature of cyber attacks

Human Rights: breaches in Cambodia, Uganda and Myanmar

Kazakhstan continues to push for a nuclear-free world

Monday’s Daily Brief: the cost of maternal healthcare, Sudan and Chad updates, sustainability in focus

These patients are sharing their data to improve healthcare standards

3 ways to accelerate the energy transition

A call for a new crop of innovators

Brexit: European Commission recommends the European Council (Article 50) to endorse the agreement reached on the revised Protocol on Ireland / Northern Ireland and revised Political Declaration

Brussels to tear down the trade wall with Mexico as opposed to Trump’s “walls”

European Court of Justice to Google: It is #righttobeforgotten but not #righttoberemembered

Netherlands: Budget MEPs back €1.2m in job-search aid for 450 redundant workers

The race to net-zero is on. This is how we can cross the finish line

Why the colour of your fruit and vegetables matters

Team Europe contributes €500 million to COVAX initiative to provide one billion COVID-19 vaccine doses for low and middle income countries

5G will drive Industry 4.0 in the Middle East and Africa

Antitrust: Commission fines car manufacturers €875 million for restricting competition in emission cleaning for new diesel passenger cars

What is hydroponics – and is it the future of farming?

UN health emergency committee to re-convene on global threat posed by China coronavirus

How can we measure real progress on the Sustainable Development Goals?

How can entrepreneurship tackle the migration crisis in the EU?

Powering through the pandemic

To build cities fit for the future, we need to think differently

US pardons for accused war criminals, contrary to international law: UN rights office

Judges urge Security Council to serve interests of all UN Member States

With a premature death every five seconds, air pollution is violation of human rights, says UN expert

Innovative investment could help solve the world’s water crisis – here’s how

‘Laser-sharp focus’ needed to achieve Global Goals by 2030, UN political forum told

Music is a vital urban resource. How do we plan for it?

These are the most desirable cities for overseas workers

China and UK relations post Brexit as EU addresses Chinese takeovers

New Disability Inclusion Strategy is ‘transformative change we need’, says Guterres

There is no greater sorrow on earth than the loss of one’s native land

It’s ‘time to #EndTB’, says UN on World Tuberculosis Day

European Solidarity Corps: three years on

Europe moulds global defense and security chart given US new inward vision

Search Engine neutrality in Europe in danger: Are 160.000 Google filtering requests good enough?

UN human rights ruling could boost climate change asylum claims

The unpleasant truth of plastic straws

Why your next car is a bike

Coronavirus: Commission lists key steps for effective vaccination strategies and vaccines deployment

Africa is helping the drone industry get off the ground. Here’s how

Geographical Indications – a European treasure worth €75 billion

The Eurogroup offered a cold reception to IMF’s director for Europe

Scotland in United Kingdom: It’s either the end or the beginning of the end

FIRST PERSON: An artist’s ‘obsession’ with New Orleans tradition

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s