The global employment outlook is now highly uncertain in the wake of the Russia-Ukraine war, according to the OECD Economic Outlook released Friday. 

While labor markets remain tight in most OECD countries, lower global growth implies slower employment amid rising energy and commodity prices, according to the Paris-based group.

The OECD unemployment rate stabilized at 4.9% in July, 0.4 points below its pre-pandemic level recorded in February 2020 and its lowest level since the start of the series in 2001.

Meanwhile, the number of unemployed workers in the OECD reached 33.0 million in July, 2.4 million less than before the pandemic, according to the report.

However, the organization noted the unemployment rate in July remained higher than before the pandemic in one-fifth of OECD countries, with employment growing more strongly in high-pay service industries. 

“Rising food and energy prices are taking a heavy toll, in particular on low-income households,” OECD Secretary-General Mathias Cormann said. “Despite widespread labor shortages, real wage growth is not keeping pace with the current high rates of inflation. In this context, governments should consider well-targeted, means-tested and temporary support measures. This would help cushion the impact on households and businesses most in need while limiting inflation impacts and fiscal cost of that policy support.”

The organization also foresees the real value of wages declining over the course of 2022 as inflation is projected to remain high and well above the level expected at the time of relevant collective agreements for the year.

OECD suggests the following measures to keep the situation in check:

• Supporting real wages for low-paid workers is essential, with governments considering adjusting statutory minimum wages to maintain effective purchasing power for low-paid workers.
• Targeted, means-tested and temporary social transfers to people most affected by energy and food price hikes will help support the living standards of the most vulnerable.
• Active discussions between governments, workers and firms on wages will help. 
• Countries should accelerate efforts to reconnect the low-skilled and other vulnerable groups to available jobs. 
• Improving job quality for frontline jobs should be an urgent priority for governments.