According to a new report published on July 7, 2021, by the Organisation for Economic Co-operation and Development (OECD), the strong economic recovery underway in OECD countries has yet to fully translate into enough new jobs to return employment levels to pre-pandemic levels in most member economies.
According to the OECD Employment Outlook 2021, around 22 million jobs were lost across 38 OECD nations in 2020 compared to 2019 and 114 million globally. Despite a partial recovery, the OECD region still has over 8 million more unemployed persons than before the crisis, and over 14 million more people who are not actively looking for work. According to the Outlook, the employment rate (the share of working-age individuals in employment) in OECD nations will remain below pre-pandemic levels by the end of 2022.
Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States are OECD members.
Over the OECD, hours spent in low-paying occupations declined by more than 28 per cent, 18 percentage points more than in high-paying occupations. The number of young people who are not in employment, education, or training (NEET) surged by about 3 million, reversing a decade-long trend. By the end of 2020, the average NEET rate among 15-29 year-olds remained a full percentage point higher than the previous year, at 12 per cent.
The OECD unemployment rate fell somewhat in May 2021, to 6.6 per cent (from 6.7 per cent in April 2021), but remained 1.3 percentage points (pp) higher than its pre-pandemic level in February 2020. In May 2021, the comparable number of unemployed workers in the OECD area was 43.5 million, 8.1 million more than in February 2020.
The OECD youth unemployment rate remained 2.2 percentage points higher than its pre-pandemic level in May 2021, at 13.6 per cent. The intensity of the economic shock and the rate of recovery varies significantly between nations, with changes between May 2021 and February 2020 unemployment rates ranging from more than 4 percentage points in some (e.g., Colombia and Costa Rica) to close to 0 in others (e.g. Australia and France).
“It will be very important to get policy settings right to encourage business investment and job creation, as well as to drive the necessary upskilling, re-skilling and skills matching required to ensure everyone has the best possible opportunity to participate and benefit from the recovery”, OECD Secretary-General Mathias Cormann said, launching the report in Paris.
“As governments roll out their recovery plans, it is essential to continue supporting families most in need while better targeting fiscal policy measures designed to boost growth towards firms and jobs that have a viable future in the new post-COVID environment, providing the right incentives for business investment leading to the restoration and creation of more new jobs.
“Withdrawing support too soon would risk jeopardising the recovery. The short-term costs of fiscal support measures can be reduced by enhancing the targeting to the most vulnerable sectors, companies and households while fostering start-ups and job creation,” he said.
At the height of the crisis, job retention programmes maintained about 60 million employment, more than ten times the number of jobs sustained during the financial crisis, and rescued up to 21 million jobs. These have served to restrict increases in unemployment in many nations, while there is no evidence that they have had a significant negative influence on job creation thus far.
What should be needed –
- Support should now be directed toward industries that are still subject to social distancing regulations. According to the research, the architecture of other systems should be changed to facilitate recovery and finally phased out
- Increased investment in active labour market policies will be crucial to assisting employees in finding work
- Activation policies should be expanded to give assistance, and governments should better integrate job and training programmes, as well as individualise assistance, to improve its efficacy
- Investment in effective skills policy is critical to assisting firms, start-ups, and people in transitioning to vocations and sectors with significant development potential, especially those reliant on green technologies
- More efforts should be made to encourage a culture of lifelong learning and to connect training to people rather than jobs