Global employment at record highs, says OECD
Labour markets in OECD countries remain resilient, with total employment at an all-time high and projected to continue to grow this year and next.
However, real wages remain below their levels five years ago in around one-third of OECD countries, and this year’s energy shock triggered by conflict in the Middle East is expected to put further pressure on wages, according to a report by the Organisation for Economic Co-operation and Development.
The OECD Employment Outlook 2026 reports that employment across 38 member countries reached 670 million in May 2026 – up by about 26% since 2001. It is expected to grow by 0.3% this year and 0.6% in 2027.
Global labour market
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Having been at or below 5.0% for more than four years, the OECD-wide unemployment rate stood at 4.9% in May 2026 and is projected to remain near this low level next year.
OECD secretary-general Mathias Cormann said: “OECD labour markets have been strong and resilient – employment is at record highs and unemployment rates are near historic lows.
“But workers’ purchasing power is not keeping up. The answer is boosting labour productivity with better education policies, adult learning options, job mobility and technology adoption.”
Real wage growth has lost momentum and, with inflationary pressures linked to higher energy costs, is expected to slow further. The wages of the lowest-paid workers in OECD countries have, however, held up better to inflation than for most workers, due to increases in minimum wages.
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Unemployment rates have risen for younger people globally. In addition to graduates, young people without degrees have started to see their unemployment rates rise in a few countries.
But the OECD said that evidence of the impact of AI on younger workers is limited so far, with cyclical factors and longer-term shifts in skills demand being more significant drivers.
This year’s edition also reveals large regional differences in labour market outcomes. The place where people live shapes their prospects for employment and their opportunities for moving up the income ladder.
The report also showed that trade and technological change affect local labour markets very differently depending on their industrial structure.
The UK ranked second, behind Luxembourg, for its labour market’s exposure to the impact of AI, with a rating of 60.9%. In London, the figure is 76.6%, while in Northern Ireland it is only 55.1%.
To help regions adapt to structural change, the OECD said 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.
This means developing partnerships among employers, public employment services, universities, training providers and local authorities to support regional strengths and tackle bottlenecks.
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