The job market is remaining resilient across most OECD countries but real wages are at a five-year low.
The OECD Employment Outlook 2026, released last night, also showed that unemployment rates have risen for younger people in several countries.
It said there was limited evidence on whether this was linked to the impact of artificial intelligence but the more likely drivers were “cyclical factors” and longer-term shifts in skills demand.
The report said that, despite the weakening of youth job prospects, employment in advanced economies was at an all-time high, and growing.
“However, real wages remain below their levels five years ago in around one-third of OECD countries, and this year’s energy shock is expected to put further pressure on wages,” the report said.
“Having been at or below 5.0 percent for more than four years, the OECD-wide unemployment rate stood at 4.9 percent in May 2026 and is projected to remain near this low level through 2027.”
OECD-wide employment stood at 670 million in May 2026, up by about 26 percent since 2001.
It is expected to grow by 0.3 percent in 2026 and 0.6 percent in 2027.
OECD Secretary-General Mathias Cormann said unemployment rates were still near historic lows.
“But workers’ purchasing power is not keeping up,” he said.
“The answer is boosting labour productivity with better education policies, adult learning options, job mobility and technology adoption.”
The OECD outlook said that real wage growth had lost momentum and was expected to slow further off the back of inflationary pressures linked to higher energy costs.
“This year’s (outlook report) reveals large regional differences in labour market outcomes and that the place where people live shapes both their prospects for employment and their opportunities for moving up the income ladder,” the report said.
“Unemployment rates in the 20 percent worst-performing regions are on average more than twice as high as in the 20 percent best-performing ones.
“People in lower-income regions also face weaker prospects for upward income mobility over time than those in higher-income regions.”
The report said regional discrepancies in employment outcomes could be addressed through structural change.
“Governments need to combine investment in local public goods – such as transport, housing, childcare, digital infrastructure, education and health services – with targeted employment, skills and industrial policies,” it said.
“This means developing partnerships among employers, public employment services, universities, training providers and local authorities to support regional strengths and tackle bottlenecks.”
The OECD is a global policy forum working with 100 countries to promote policies to preserve individual liberty and improve the economic and social well-being of people around the world.
Full data and projections from the Employment Outlook 2026 are available here
