(26.07.2023) Despite unemployment remaining relatively low, inflation is eroding purchasing power in OECD member economies. According to the Organisation for Economic Co-operation and Development, real wages have decreased by an average of 3.8% between the first quarters of 2022 and 2023.
The average unemployment rate in OECD countries stands at 4.8%, maintaining its lowest historical level for the third consecutive month, indicating a strong job market. However, it is expected to increase by 0.4 percentage point to 5.2% by the end of the year.
While nominal wages have indeed risen, they are not increasing as quickly as the cost of living, resulting in a decline in real wages in 30 out of 34 countries with available data (-3.8%).
In Switzerland, the growth of real wages also shows a negative trend (-1.4%), although it has regressed much less than most other evaluated economies. In neighboring countries, the decline in real wages reached -1.8% in France, -3.3% in Germany, -4.3% in Austria, and even -7.3% in Italy. In Hungary (-15.6%), Latvia (-13.4%), and the Czech Republic (-10.4%), real wages have dropped by over -10% on an annual basis.
However, four OECD member economies experienced an increase in real wages: the Netherlands (+0.4%), Israel (+0.6%), Costa Rica (+1.7%), and Belgium (+2.9%).
The OECD also highlights that technological advancements in artificial intelligence put over a quarter of current jobs (27%) at risk of automation, especially in the construction, agriculture, fishing, forestry, production, and transportation sectors.
The organization calls for increased cooperation among states to develop sustainable policy frameworks regarding the use of these new technologies in the workplace.
Last modification 26.07.2023
