(Finance) – Employment in OECD countries is at an all-time high, but employment growth is starting to slow down and “real wages have recovered pre-2020 levels in only 19 of the 35 OECD countries” despite a recovery in recent quarters. This is what theOECD Employment Outlook 2024, which also confirms for the first quarter of 2024 the black jersey awarded to Italy for real wages: the country, with a -6.9% compared to the fourth quarter of 2019, is third to last among the 38 OECD countries and only Czechia and Sweden do worse, against -2% of Germany and +0.1% of France.
According to estimates by theEmployment Outlook 2024 Employment in OECD countries has reached 662 million in May 2024 (+25% since 2000) and is expected to grow by around 0.7% per year in 2024-25. The OECD-wide unemployment rate stood at 4.9% in May 2024 and is expected to rise slightly. It was 0.2 percentage points higher for women than for men.
THE real wages – the OECD notes – have recovered lost ground in 2022 and the first part of 2023. In 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%. Analysis of this employment outlook points to a reversal from recent trends that have seen profits grow faster than wages. Wages are now recovering some of the lost ground, while there is room for profits to provide a further cushion for wage growth, given the significant profit growth over the past two to three years. Minimum wages are above 2019 levels in real terms in almost all OECD countries. In May 2024, the real minimum wage was 8.3% higher than five years earlier than the median of the 30 OECD countries with a national statutory minimum wage, thanks to significant nominal increases in statutory minimum wages to support lower minimum wages during the period of high inflation over the past two to three years.
In Italy The low labor costs, allows Made in Italy to be competitive on an international level. At the same time, low wages limit domestic demand, resulting in significant trade surpluses. It is no coincidence that for the OECD, stagnant productivity for almost 30 years is the main ball and chain of the Italian economy, because a country that does not grow creates fewer jobs and the jobs are of lower quality and lower wages.
In the Employment Outlook 2024 OECD scolds countries where real wages continue to go backwards despite a season of more than good corporate profits: “In many countries there is still room for profits to absorb further wage increases.”
In its Economic Survey dedicated to Italy, in January, the Parisian organization noted the good performance of Italian exports compared to European partners in the post-Covid period, achieved by gaining competitiveness “mainly thanks to the low growth of unit labor costs”. But it also highlighted the need, in a collective bargaining system where companies have “significant bargaining power”, to increase wages and productivity of companies, through investment and innovation. One of the objectives of European aid with the ‘Recovery Plan’, which has not yet been achieved.