Among the 14 nations with a stable rate are powerhouses such as France, Germany, and Japan, whilst a decline was recorded in 13 countries, including Italy and Norway. Conversely, a rise in unemployment was observed in five nations, including the US and Canada.
The OECD Employment Outlook 2023 predicts a promising future for job markets in member countries with an expected expansion in 2023 and 2024.
Unemployment rates have hit record lows, with May 2023 marking a third consecutive month at 4.8 per cent.
However, real wages have fallen in most OECD nations due to inflation outpacing nominal wage increases.
Despite the considerable slowdown in the global economy since 2021, job markets in the OECD countries remain robust with employment levels rebounding to pre-pandemic standards. Unemployment rates are at a historic low, resembling figures from the early 1970s. However, this progress comes with a caveat; nominal hourly wages have increased but not sufficiently to keep pace with inflation, resulting in a decline in real wages across almost all OECD nations, as per the outlook.
Looking forward to the end of 2024, the unemployment rate is forecasted to experience a minor uptick to 5.2 per cent, with significant rises anticipated in the UK, US, Australia, and New Zealand. The first quarter of 2023 saw an unfortunate decline in real annual wage growth in 30 out of the 34 countries assessed, marking an average reduction of 3.8 per cent.
The outlook divulged an alarming trend where profits have frequently surged beyond labour compensation. Yet, it suggests a potential for profits to further accommodate wage adjustments, gradually restoring lost purchasing power without instigating substantial price pressures or declining labour demand.
A highlight of this year’s outlook is the potential onset of an AI revolution, indicating that 27 per cent of employment, chiefly low and middle-skilled roles, are highly susceptible to automation.
Furthermore, the assimilation of AI in firms could potentially enhance work engagement and safety by mitigating tedious and hazardous tasks. However, it also brought to light concerns with three-fifths of workers apprehending job losses to AI within a decade and fears of wage shrinkage in their sectors due to AI advancements. Privacy issues and heightened work pace were additional concerns expressed by over half of the survey respondents.
As AI continues to evolve, the pressing need for international cooperation escalates to foster inclusive labour markets and prevent a fragmented approach that could potentially hamper innovation and give rise to regulatory gaps, the outlook added.
“Labour markets have shown remarkable resilience over the past year and remain tight, though high inflation and the rising cost of living has eroded real incomes,” said OECD Secretary-General Mathias Cormann. “The recent acceleration of generative AI related developments and tools marks a technological watershed with material implications in many workplaces. There is a real need to consider longer term policy frameworks on the use of AI in the workplace and to continue to foster international cooperation to maximise the benefits while appropriately managing the downside risks.”
Fibre2Fashion News Desk (DP)
