Rapid action needed for people to meet challenges of changing world of work

This article is brought to you in association with OECD.

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Governments need to overhaul their approach to employment and jobs to reduce further social and economic tensions, according to a new report from the OECD. Without rapid action, many people, particularly the low skilled, will be left behind in the fast-changing world of work. The OECD Employment Outlook 2019 is part of the OECD’s Future of Work initiative and the “I am the Future of Work” campaign, which aims to make the future of work better for all, helping to transform learning and social protection systems and reduce inequalities between people and across regions. “The OECD Employment Outlook does not envisage a jobless future. But it does foresee major challenges for the future of work,” said OECD Secretary-General Angel Gurría, launching the report in Berlin with Hubertus Heil, Germany’s Federal Minister of Labour and Social Affairs. “With the right policies, we can manage these challenges. We face significant transformation, but we have the opportunity and the determination to use this moment and build a future of work that benefits everyone.” While the OECD area has fully recovered the jobs lost during the crisis and today the employment rate is 2 percentage points higher than before the crisis, the projected slowdown in the global economy casts a shadow over short-term job prospects, and the job market has continued to polarise. To help workers, firms, and countries adapt to the changing world of work, the OECD proposes in this Outlook a Transition Agenda for a Future that Works for All. The employment rate improvement in most OECD countries has been driven by a substantial rise in the share of women in work and older workers staying longer in employment. Moreover, much of the increase in employment reflects the growing number of high-skilled jobs, the share of which has risen by 25% in OECD countries over the past two decades. However, among young people with less than tertiary education in many countries, a rising share are out of work or, if in work, under-employed or low-paid. Men have seen an increase in joblessness and under-employment in some countries, although labour market outcomes for women remain worse on average. The digital transformation, globalisation and demographic changes have already been reshaping the world of work. Looking ahead, 14% of existing jobs could disappear as a result of automation in the next 15-20 years, with another 32% set to change radically. While full-time, permanent employment is likely to still account for many, if not most, jobs in the future, the past few years have seen a further rise in non-standard work in some countries, such as self-employment and temporary contracts. Part-time employment has risen in virtually every OECD country over the past few decades. The share of people who work part-time but would prefer to work full-time has also risen in two thirds of OECD countries for which data are available. The Agenda recommends that countries focus on four key areas: labour protection, social protection, learning and social dialogue. It underlines the importance of ensuring adequate labour law protection for workers, regardless of their employment status. Governments should tackle false self-employment, which employers sometimes use to avoid taxes and regulations, minimise the “grey zone” between salaried work and self-employment, and extend rights to workers left in that zone. Adapting and extending social protection is essential to ensure better coverage for workers in non-standard forms of employment, according to the report. Non-standard workers are, in some countries, 40-50% less likely to receive any form of income support while out of work than standard employees. Benefit entitlements should be made portable across jobs and targeted social protection measures complemented with more universal and unconditional support. In all OECD countries, training participation is lowest among those who need it most, including the low-skilled, older adults and non-standard workers. A major overhaul of adult learning programmes to increase their coverage and promote quality is needed to harness the benefits of the changing world of work. Measures should include removing time and financial constraints to participation in training, making training rights portable, and providing quality information and counselling. Union membership has steadily declined over the last three decades in OECD countries, falling from 30% in 1985 to 16% in 2016, says the Outlook. This has weakened workers’ bargaining power and contributed to the decline in the share of national income going to workers. Membership is even lower among non-standard workers, who are 50% less likely than standard workers to be unionised. Access to collective bargaining and social dialogue should be extended beyond standard employment.