The Triple Threat | Article on Global Resession | Harsh Kumar
OECD Report Shows Skills Most Impact Jobs, Wages
1. OECD Employment Outlook 2014
Stefano Scarpetta, Director for Employment, Labour
and Social Affairs, OECD
2. The recovery is gaining momentum but there is no time for complacency
•
Unemployment has started to decline, but further progress is required as the job recovery has not gone very far yet
•
People have borne considerable personal, economic and social costs that may prove to be long-lasting:
–
long-term unemployment remains persistently high
–
many workers have experienced falls in the real value of their earnings
•
Fixed term contracts are increasingly used for new hires, but they are not an automatic stepping-stone to permanent work
•
Not just more jobs but also better jobs are needed. The good news is that there is little sign of a trade-off between job quantity and job quality across countries
•
Skills are the key to better jobs, but this requires giving people the opportunity to acquire the right skills needed in the labour market. It is not just educational attainment that matters 2
3. Unemployment has started to decline, but further progress is required… 3
0
2
4
6
8
10
12
14
Italy
Euro area
France
OECD
United Kingdom
United States
Canada
Germany
Japan
%
Unemployment rate
Percentage of the labour force
Current value (Q4 2013)
Start of the crisis (Q4 2007)
Country-specific peak
Projected value (Q4 2015)
4. 4
Youth unemployment has reached very high levels in some OECD countries
Youth unemployment rate (15-24) Percentage of the labour force
0
5
10
15
20
25
30
35
40
45
50
Italy
Euro area
France
United
Kingdom
OECD
Canada
United States
Germany
Japan
%
Q2 2014
Q4 2007
Country-specific peak
5. … since the jobs recovery has not yet gone far enough 5
41
43
45
47
49
51
53
55
57
59
61
63
Canada
United
Kingdom
Japan
Germany
United States
OECD
Euro area
France
Italy
%
Employment-to-population ratio
Percentage of the working-age population (aged 15 or more)
Current value (Q4 2013)
Start of the crisis (Q4 2007)
Country-specific trough
Projected value (Q4 2015)
6. The personal, economic and social costs of the crisis have been considerable
•
Among those who are unemployed, an increasing number of persons are out of work for 12 months or more, facing a depreciation of their skills and a risk of labour market exclusion
•
Among those who have kept their jobs, many low- paid workers and their families have experienced economic hardship as a result of declines in the spending power of their earnings 6
7. The long-term unemployed face skill depreciation and labour market exclusion 7
0
10
20
30
40
50
60
Canada
United States
United
Kingdom
OECD
France
Japan
Germany
Euro area
Italy
%
Long-term unemployed (more than one year)
as a percentage of total unemployed
Q4 2013
Start of the crisis (Q4 2007)
8. 8
Real wage growth has come to a virtual standstill
-6-4-202468%Q4 2007-Q1 2009Q1 2009-Q4 2013
Real hourly wage, average annualised percentage growth rate
Source : OECD calculations based on quarterly national accounts.
9. 9
The growth in unit labour costs has slowed, particularly in a number euro zone economies
Base 100 = 2000
Source : OECD calculations based on quarterly national accounts.
8090100110120130140150160CanadaUnited KingdomJapanOECDUnited States8090100110120130140150160GermanySpainFranceGreeceItalyOECD
10. … but the flip side is that many workers saw the real value of their earnings fall 10
0
10
20
30
40
50
60
70
FIN
NLD
DNK
SVN
AUS
LUX
ITA
POL
AUT
FRA
BEL
ALL
DEU
USA
CZE
GBR
ESP
GRC
PRT
EST
%
Incidence of real wage cut in 2010 Percentage of full-time job stayers (aged 15-64, staying at least one year with the same employer)
Nominal wage cut
Real wage cut
11. Fixed term contracts are increasingly used for new hires 11
0
10
20
30
40
50
60
70
80
90
%
Fixed-term contracts among new hires
Percentage of employees with no more than three months of tenure
2011-12
2006-07
12. Temporary jobs are not an automatic stepping-stone to permanent work 12
0
10
20
30
40
50
60
NLD
GRC
EST
FRA
ESP
IRL
ITA
AUT
BEL
POL
ALL
PRT
SWE
LUX
CZE
SVN
GBR
FIN
HUN
SVK
NOR
ISL
%
Three-year transition rates from temporary to permanent contracts Share of temporary employees in 2008 that were employed as full-time permanent employees in 2011
13. Gaps in employment protection between permanent and temporary workers should be reduced…
•
When these gaps are excessive, the job losses in a downturn are greater, especially for temporary workers. They also reinforce labour market segmentation and undermine employment prospects for temporary workers
•
Reducing these gaps could be done by:
─
Lowering the level of protection for permanent contracts (which could raise labour churning) or raising protection for temporary contracts (which would reduce labour adjustment)
─
Or by introducing a single or unified contract. But these options involves overcoming implementation difficulties, especially where employment protection of permanent contracts is very strict
•
Reducing labour market segmentation also requires complementary reforms to be effective 13
14. Both more jobs and better jobs are needed
Job quality embraces a range of aspects that matter for well-being:
•
Earnings quality: level and distribution of earnings
•
Labour market security: risk and consequence of job loss in terms of lost income
•
Quality of the working environment: extent to which workers have the resources they need to meet the demands of their jobs 14
15. There is little sign of a trade-off between job quantity and job quality across countries… 15
0.00.20.40.60.81.0 TURESPGRCSVKESTPOLHUNMEXSVNCZEPRTKORJPNISRITAFRAUSAAUTCANDEUGBRNZLLUXAUSBELIRLSWEFINNLDDNKCHENOR Indices from 0 (low quality) to 1 (high quality) Earnings qualityLabour market securityQuality working environmentHigh employment rate (in the top two deciles)Low employment rate (in the bottom two deciles)
16. … but there are considerable differences in job quality between socioeconomic groups within countries 16
Job quality outcomes by socio-demographic group (gender, age, education) Average over 23 European countries, 2010048121620Earnings qualityPPP-adjusted gross hourly earnings02468101214Labour market insecurityRisk of income loss due to unemployment risk, as a % of previuos earnings0510152025Quality of the woking environmentIncidence of job strain
17. Having the right skills to get a good job: what matters most?
The OECD’s international Survey of Adult Skills shows that:
•It is not just educational attainment but also the type of skills acquired and proficiency in these skills that affect the probability of finding a job
•Work experience and generic skills positively affect wages early on 17
18. Youth with high proficiency in literacy are much less likely to be out of work and out of school… 18
*** *** *** ** ** ** ** * -10-8-6-4-20246810Level 4 and 5Level 3Level 2Level 1ServicesHealth and welfareAgriculture and veterinaryEngineering, manufacturing and construcScience, mathematics and computingHumanities, languages and artsTeacher training and education scienceGeneral programmesTertiaryPost-secondary, non-tertiaryUpper secondaryPrecentage point diffrerence in the probability of being NEETThe determinants of the probability of being neither in employment nor in education or training (NEET), for young poeple aged 16-29Proficiency in literacy(as compared to below level 1) Field of study(as compared to Social Sciences) Educational attainment(as compared to lower secondary)
19. … and work experience as well generic skills are key determinants of the level of pay 19
03691215182124YouthPrime-age workersOlder workersThe determinants of the variation in hourly wagesPercentage of the explained variance (R-squared) in hourly wagesExperienceGeneric skillsField of studyEducationUse of information- processing skillsProficiency in literacy
20. Thank you
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