The outlook estimates that OECD-wide employment, which reached 662 million in May 2024—an increase of approximately 25 per cent since 2000—is projected to grow at about 0.7 per cent per annum over 2024-2025. The unemployment rate across the OECD stood at 4.9 per cent in May 2024, with a slight projected increase. The rate was 0.2 percentage points higher for women than for men.

Real wages have been making up for losses incurred in 2022 and early 2023. By the first quarter of 2024, annual real wage growth was positive in 29 of the 35 OECD countries with available data, averaging an increase of 3.5 per cent across all countries. The analysis suggests a reversal of recent trends where profits grew faster than wages. Currently, wages are recovering, with profits having room to support further wage growth due to significant profit increases over the past two to three years, as per OECD.

Minimum wages are above 2019 levels in real terms in nearly all OECD countries. As of May 2024, the real minimum wage was 8.3 per cent higher than five years earlier at the median across the 30 OECD countries with a national statutory minimum wage, driven by significant nominal increases to support the lowest-paid workers during the high inflation period of the past few years.

This year’s Employment Outlook also examines the impact of ambitious climate change mitigation packages aimed at achieving net-zero greenhouse gas emissions by 2050 on labour markets and millions of workers worldwide. While the short-term aggregate employment effects of the climate transition are expected to be limited, significant shifts and disruptions are anticipated. Jobs will be lost in greenhouse gas-intensive industries, while many new positions will emerge in low-emissions sectors.

About 20 per cent of the OECD workforce is employed in green-driven occupations that will likely benefit from the climate transition. These jobs directly contribute to emissions reductions or produce intermediate goods and services for environmentally sustainable activities. High-skill green-driven jobs typically offer higher-than-average wages, but low-skill green-driven jobs tend to have poorer job quality compared to other low-skill positions, making them less attractive to low-skilled workers.

Workers in shrinking high-emissions industries—responsible for 80 per cent of all greenhouse gas emissions but only 7 per cent of employment—face 24 per cent larger earnings losses on average during the six years following a mass layoff than those in other industries.

To address these challenges, policies should facilitate job transitions and help workers seize new opportunities in green-driven jobs while mitigating earnings losses for displaced workers. Suggested measures include early intervention, effective training programmes, and targeted in-work support approaches such as time-limited wage subsidy schemes, the OECD added.

Fibre2Fashion News Desk (DP)