Low productivity jobs continue to drive employment growth

productivity

(Glenn Carstens-Peters, Unsplash)

This article is brought to you in association with OECD.


Employment is rising in OECD countries but most jobs continue to be created in relatively low-productivity, low wage activities, says a new OECD report.

The latest Compendium of Productivity Indicators says the trend has compounded the impact of generally weak business investment on productivity growth.

The downward pressure on wages may have allowed firms to defer investment decisions, instead meeting increased demand by hiring additional staff and, in turn, undermining the potential for investment-driven productivity growth, the report says.

In France, Germany and the United Kingdom, the top three sectors with the largest employment gains between 2010 and 2017 accounted for one third of total job creation but paid below average wages. Moreover, in Belgium, Finland, Italy and Spain, industries with above average labour productivity levels saw net job losses.

The data show wage growth (adjusted for inflation) improving in recent years but remaining below pre-crisis rates in two thirds of OECD countries despite a period of negligible or slow wage growth, and earlier declines in purchasing power in the aftermath of the crisis. Indeed, real wages remain below crisis levels in Greece, Italy and Spain, and have also contracted in recent years in Belgium and Canada.

More jobs in lower paid sectors such as accommodation and catering and health and residential care, weigh on average wages across the economy as a whole.

The report also shows that the share of income from economic activity going to labour through wages has continued to fall over the past 15 years in many countries, most markedly in manufacturing. By 2017, the sharpest falls were in Ireland, Poland and Portugal but labour income shares have also declined substantially in Australia, Hungary, Israel, Japan and the US.

With labour costs now beginning to rise in many countries, firms may start to reconsider investment decisions, the report adds. But political uncertainties, trade tensions and the erosion of business and consumer confidence may continue to weigh on investment. The report calls for policies to stimulate investment, capitalise on the efficiencies and economies of scale provided by the digital transformation and encourage growth in high productivity activities.

Slowing productivity growth limits the scope for improvements in material well-being. The OECD says productivity is ultimately a question of “working smarter” – measured by ‘multifactor productivity’ – rather than “working harder”. It reflects firms’ ability to produce more output by better combining inputs through new ideas, technological innovations, as well as by way of process and organisational innovations.

the sting Milestone

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

EU budget: Stepping up the EU’s role as a security and defence provider

Statement by President von der Leyen on recent developments related to Iran and Iraq

The energy industry is changing. Are governments switched on?

Myanmar military leaders must face genocide charges – UN report

The MH17 tragedy to put a tombstone on Ukrainian civil war

Climate change and health: Raising awareness is the key for greener actions

We have a space debris problem. Here’s how to solve it

The US reject EU proposal for prudential financial controls

The EU has to prove it can remain one piece

Will Merkel ever steer the EU migration Titanic and restore her power in Germany?

The EU Commission openly repudiates the austere economic policies

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

Unemployment worries spike around the world as coronavirus remains top global concern

The European Commission cuts roaming charges. But “it’s not enough”…

Post the pandemic: keeping our worlds turning

These rules could save humanity from the threat of rogue AI

Unemployment is down across the world’s largest economies

COVID-19: EU co-finances the delivery of more protective equipment to China

Global leaders and companies pledge to reduce the gender pay gap by 2030

Climate change: new rules agreed to determine which investments are green

The EU’s Response to COVID-19

Dangers of poor quality health care revealed ‘in all countries’: WHO report

Mergers: Commission opens in-depth investigation into joint ventures proposed by Boeing and Embraer

4 things ISPs can do to reduce the impact of cybercrime

Implementation of EU Facility for Refugees in Turkey: EU mobilises €663 million in humanitarian assistance

Palestine refugee crisis ‘expanding’; leaving highest number at risk this century across Gaza

European Commission requests that Italy presents a revised draft budgetary plan for 2019

ECB’s new money bonanza handed out to help the real economy or create new bubbles?

From ‘dead on the inside’ to ‘truly alive’: Survivor of genocide against the Tutsi in Rwanda recounts her story as UN marks 25th anniversary

On Youth Participation: Are we active citizens?

Huge data gaps’ hampering ‘evidence-based’ national migration policies

COP24: A million lives could be saved by 2050 through climate action, UN health agency reveals

EU-U.S. Privacy Shield: Second review shows improvements but a permanent Ombudsperson should be nominated by 28 February 2019

EU Commission indifferent on Court of Auditors’ recommendations

First-ever global conference of national counter-terrorism chiefs will strengthen cooperation, build ‘resilient’ States, says top UN official

COVID-19 tracing apps: MEPs stress the need to preserve citizens’ privacy

Almost there: Equal healthcare for LGBTQI+

Palestine refugees’ relief chief warns Security Council money to fund Gaza operations will run out in mid-June

We must learn and change after Haiti sexual abuse scandal -Oxfam chief

Online radio and news broadcasts: Parliament and Council reach deal

Health is nothing but the main consequence of climate change

Marco Polo’s Dream

Rural Bangladesh has already embraced renewable energy. Here’s what the rest of the world can learn

Europe plans to send satellites into space to monitor CO2 emissions

US now has most coronavirus cases in the world – Today’s coronavirus updates

UN chief lauds Fijians as ‘natural global leaders’ on climate, environment, hails ‘symbiotic relationship’ with land and sea

The 28 EU leaders care more about fiscal orthodoxy than effectively fighting youth unemployment

Lagarde: Keep feeding the banks cut down wages and food subsidies

Recognizing, protecting and empowering youth rights in Europe and the world

Should Europe be afraid of the developing world?

Most fish consumers support a ban on fishing endangered species, poll finds

New rules allow EU consumers to defend their rights collectively

The Great Reset needs great leaders to help the most vulnerable

A bad marriage can be as unhealthy as smoking and drinking

EU job-search aid worth €9.9 million for 1,858 former Air France workers

From Model T to EV: a short history of motor vehicle manufacturing

African elephants under continued threat of poaching, warns UN-backed report

This Dutch company has devised an innovative way to deal with food waste

Quicker freezing and confiscation of criminal assets in the EU

Euro celebrates its 20th birthday

More Stings?

Advertising

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