Job markets in OECD members have been resilient, with total employment in such nations at an all-time high and projected to continue to grow.
However, real wages remain below their levels five years ago in around a third, and this year’s energy shock may put further pressure on wages, an OECD report revealed.
OECD-wide employment is expected to grow by 0.3 per cent in 2026 and 0.6 per cent in 2027.
The OECD Employment Outlook 2026 reports that OECD-wide employment, which reached 670 million in May 2026—up by about 26 per cent since 2001—is expected to grow by 0.3 per cent in 2026 and 0.6 per cent in 2027.
Having been at or below 5 per cent for more than four years, the OECD-wide unemployment rate stood at 4.9 per cent in May 2026 and is projected to remain near this low level through 2027.
“OECD labour markets have been strong and resilient – employment is at record highs and unemployment rates are near historic lows,” OECD secretary General Mathias Cormann said. “But workers’ purchasing power is not keeping up. The answer is boosting labour productivity with better education policies, adult learning options, job mobility and technology adoption.”
Real wage growth has lost momentum and, with renewed inflationary pressures linked to higher energy costs, is expected to slow further. The wages of the lowest paid workers have held up better to inflation than for most workers, due to increases in minimum wages.
Unemployment rates have risen for younger people. In addition to graduates, young people without college degrees have started to see their unemployment rates rise in a few countries.
Evidence of the impact of artificial intelligence on younger workers is so far limited, the report found. Cyclical factors and longer-term shifts in skills demand are more significant drivers.
The place where people live shapes both their prospects for employment and their opportunities for moving up the income ladder.
Unemployment rates in the worst-performing regions (a fifth) are, on an average, more than twice as high as in the 20-per cent best-performing ones, a ratio exceeding four in Belgium, Canada, Italy and the Slovak Republic.
People in lower-income regions also face weaker prospects for upward income mobility over time than those in higher-income regions.
The report shows that trade and technological change affect local labour markets very differently depending on their industrial structure. While structural change ultimately supports net job creation overall, adjustment occurs mainly through people entering and leaving employment rather than moving across sectors or regions, leaving some workers and communities facing persistent challenges.
To enhance residential and labour mobility, including for disadvantaged households, governments need to tackle issues including housing, childcare, family constraints, portability of rights and access to local services, the report recommends.
However, as for many people mobility is not a feasible option, these measures should be paired with efforts to expand good job opportunities where people already live, it adds.
Fibre2Fashion News Desk (DS)
