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OECD employment forecasted to grow in 2024-25

OECD employment forecasted to grow in 2024-25

July 10, 2024

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Employment across the OECD (Organisation for Economic Co-operation and Development) is expected to grow at around 0.7% per year, according to the latest OECD Employment Outlook 2024

The Outlook 2024 showed that OECD-wide employment, which reached 662 million in May 2024, is up by about 25% since 2000. Meanwhile, the OECD-wide unemployment rate stood at 4.9% in May 2024 and is projected to inch up slightly. It was 0.2% higher for women than for men, the Outlook noted.

Real wages have been catching up on the lost ground in 2022 and the first part of 2023. By the first quarter of 2024, annual real wage growth was positive in 29 of the 35 OECD countries for which data are available, with an average increase across all countries of 3.5%.

Minimum wages are above 2019 levels in real terms in virtually all OECD countries. In May 2024, the real minimum wage was 8.3% higher than five years earlier at the median across the 30 OECD countries with a national statutory minimum wage. This is due to significant nominal increases of statutory minimum wages to support the lowest paid during the high inflation period over the past two to three years.

According to the OECD, evidence suggests that wages have been performing better in the lower part of the wage distribution, with nominal wages growing more in lower-pay industries and occupations and among workers with low education.

The report also analysed the impact that ambitious climate change mitigation packages aimed at achieving net-zero greenhouse gas emissions by 2050 will have on labour markets and on the jobs of millions of workers worldwide.

OECD Secretary-General Mathias Cormann said in a press release, “Strong labour markets, with strong jobs growth, have been central to the economic resilience of OECD countries over the past several years. In the period since the pandemic, OECD employment has increased to a record high, despite the challenges posed by inflation and slow productivity growth.”

Cormann added, “The climate transition will lead to significant shifts in labour markets, from high-emissions industries towards new opportunities in green-driven jobs. Policy priorities should be to enable the necessary jobs mobility, including through effective training programmes in impacted sectors, to support workers who have lost their job or whose jobs are at risk through the transition and to promote green-focused innovation, entrepreneurship and jobs.”

While aggregate employment effects of the climate transition are estimated to be limited in the short run, the Employment Outlook notes that the climate transition is expected to lead to significant shifts and disruptions.

Jobs will be lost in the shrinking greenhouse gas-intensive industries, while many others will be created in expanding low-emissions activities. About 20% of the OECD workforce is employed in green-driven occupations that will likely be positively impacted by the climate transition. This includes jobs that directly contribute to emissions reductions as well as those that produce intermediate goods and services for environmentally sustainable activities.

Workers in shrinking high-emissions industries, which account for 80% of all greenhouse gas emissions but only 7% of employment, face 24% larger earnings losses on average during the six years following a mass layoff than in other industries.