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Global: OECD says wages improving

According to the OECD’s annual employment report, labour markets remain tight, with total employment higher than before COVID-19 and the OECD unemployment rate close to its lowest level since at least 2001. 

The big picture: Real wages have recovered to pre-2020 levels in only 19 of the 35 OECD countries with available data, despite some catching up in the past quarters. Gender employment participation gaps are narrowing, with female employment up by about 5% in May this year from December 2019, compared with 3% for men.

Why it matters: The OECD finds that 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%. OECD analysis indicates a reversal of recent trends that saw profits growing faster than wages. Wages are now recovering some of the lost ground, while there is room for profits to provide additional buffering for wage growth given the significant growth in profits over the past two to three years.


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Authors: Tom Hayes

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