The OECD Employment Outlook looks at the latest labour market developments and prospects in OECD member countries. This edition also assesses the impact of the transition to net-zero emissions by 2050 on the labour market and the jobs of millions of workers. While total employment will not change much, many jobs will be lost in the shrinking high-emission industries, while many others will be created in the expanding low-emission activities.

Labour markets continued to perform strongly, with many countries seeing historically high levels of employment and low levels of unemployment. By May 2024, the OECD unemployment rate was at 4.9%. In most countries, employment rates progressed more for women than for men, compared to pre-pandemic level.

Amid the general slowdown in economic growth, labour market tightness (i.e. the number of vacancies per unemployed person) has eased in recent quarters but remains above pre-COVID-19 levels in many countries. In Q4 2023, among the countries with available data, vacancy-to-unemployed ratios were below their post 2019 peak in all countries where they had increased considerably after the COVID-19 crisis.

Real wages are now growing year-on-year in most OECD countries, generally driven by a decline in inflation. Yet, they are still below their 2019 level in many countries. As real wages are recovering some of the lost ground, profits are beginning to buffer some of the increase in labour costs. Yet, in many countries, there is still room for profits to absorb some further wage increases, especially as there are no signs of a price-wage spiral.

Across the OECD, 20% of the workforce is employed in green-driven occupations, also considering jobs that do not directly contribute to emission reductions but are likely to be in demand because they provide goods and services needed for green activities. Conversely, about 7% of jobs are in greenhouse gas (GHG) -intensive sectors.

The net-zero transition induces a contraction of high-emission sectors, which account for 80% of GHG emissions but only 7% of employment. Workers in these sectors face greater earnings losses after job displacement, averaging a 36% decrease over 5-6 years after job loss compared to 29% in other sectors.  Policies that support incomes and facilitate job transitions are essential to mitigate these losses and ensure continued support for the net-zero transition.

Most GHG-intensive occupations share similar skill requirements with other jobs including green-driven occupations, suggesting that transitions out of these jobs are possible with targeted retraining. However, the move towards the emerging green-driven occupations is more challenging for workers in low skilled positions than for the high-skilled, calling for urgent policy action to ensure that no one is left behind by the net-zero transition.