OECD job markets have remained resilient, with total employment in OECD countries 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 is expected to put further pressure on wages, according to a new OECD report.
The OECD Employment Outlook 2026 reports that OECD-wide employment, which reached 670 million in May 2026 – up by about 26% since 2001 – is expected to grow by 0.3% in 2026 and 0.6% in 2027. 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 through 2027.
“OECD labour markets have been strong and resilient – employment is at record highs and unemployment rates are near historic lows,” OECD Secretary-General Mathias Cormann said. “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 renewed inflationary pressures linked to higher energy costs, is expected to slow further. The wages of the lowest paid workers have held up better to inflation than for most workers, due to increases in minimum wages.
Unemployment rates have risen for younger people. In addition to graduates, young people without college degrees have started to see their unemployment rates rise in a few countries. Evidence of the impact of artificial intelligence on younger workers is so far limited, according to the report. Cyclical factors and longer-term shifts in skills demand are more significant drivers.
This year’s edition also 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. Unemployment rates in the 20% worst-performing regions are on average more than twice as high as in the 20% best-performing ones, a ratio exceeding four in Belgium, Canada, Italy and the Slovak Republic. People in lower-income regions also face weaker prospects for upward income mobility over time than those in higher-income regions.
The report shows that trade and technological change affect local labour markets very differently depending on their industrial structure. While structural change ultimately supports net job creation overall, adjustment occurs mainly through people entering and leaving employment rather than moving across sectors or regions, leaving some workers and communities facing persistent challenges.
To help regions adapt to 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. This means developing partnerships among employers, public employment services, universities, training providers and local authorities to support regional strengths and tackle bottlenecks; helping workers at risk of displacement through early intervention, retraining, and job-search and income support; and promoting diversification so local economies are less dependent on a single industry.
To enhance residential and labour mobility, including for disadvantaged households, governments need to tackle issues including housing, childcare, family constraints, portability of rights and access to local services. However, as for many people mobility is not a feasible option, these measures should be paired with efforts to expand good job opportunities where people already live.
Full data and projections from the Employment Outlook 2026 are available at: https://www.oecd.org/en/publications/oecd-employment-outlook-2026_7e710f54-en.html
For further information, journalists are invited to contact Spencer Wilson in the OECD Media Office (tel. +33 1 45 24 97 00).
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