OECD Employment Outlook

OECD labour markets remain tight even as the recovery has stalled, with unemployment at a low not seen since the early 1970s. Yet, nominal wages have not kept up with high and persistent inflation, and real income of workers has fallen in almost all OECD countries. Increasingly rapid developments in AI are likely to significantly affect jobs. Initial results from a new OECD survey on AI use in the manufacturing and finance sectors show the urgent need to act now, with policies that allow countries, firms and individuals to benefit from AI, while addressing risks.

Key findings:

> Labour markets have stabilised

> Amid a cost-of-living crisis, real wages are down

> AI likely to significantly impact jobs

> What do workers and employers think about AI in the workplace?

Discover what governments can do

Latest trends in jobs and wages

Labour markets have stabilised

Labour markets remain very tight in most OECD countries although the number of vacant positions per job seeker has declined in many countries. Employment has stabilised at a level slightly higher than before the COVID crisis, while unemployment rates across the OECD remain historically low. Labour market participation has increased as well, with fewer working-age people inactive than before the COVID-19 crisis, and the average hours worked per employed person are above or just below pre-crisis levels in most countries.

4.8%

OECD unemployment rate (May 2023)

Amid a cost-of-living crisis, real wages are down

Labour markets have pushed up nominal wages, but less so than inflation, leading to a fall in real wages in almost all industries and OECD countries. The real value of statutory minimum wages has been preserved thanks to regular adaptation to inflation in many OECD countries. This is particularly important as high inflation weighs heavily on low-income households. Company profits have risen more than labour costs in many countries and sectors, suggesting that the cost-of-living crisis has not been shared equally by everyone.

-3.8%

year-on-year change in real wages in OECD countries (Q1 2023)

Artificial intelligence and jobs

AI likely to significantly impact jobs

While firms’ adoption of AI is still relatively low, rapid progress including with generative AI (e.g. ChatGPT), falling costs and the increasing availability of workers with AI skills suggest that OECD countries may be on the brink of an AI revolution. It is vital to gather new and better data on AI uptake and use in the workplace, including which jobs will change, be created or disappear, and how skills needs are shifting. When considering all automation technologies including AI, 27% of jobs are in occupations at high-risk of automation. Initial findings from a new OECD survey of AI's impact in the manufacturing and finance sectors of seven countries highlight both the opportunities and risks that AI brings.

What do workers and employers think about AI in the workplace?

In 2022, the OECD gathered data on the impact of AI on people and their workplaces, in the manufacturing and finance sectors of seven countries. The findings show that AI use at work can lead to positive outcomes for workers around job satisfaction, health and wages. Yet there are also risks around privacy, work intensity and bias. The survey revealed a clear divide between what workers think about AI use in their jobs today and their fears for the future. The results highlight the urgent need for policy action now, to ensure that no one is left behind.

What can governments do?

1. Support low-wage workers

Wage policies such as minimum wages and collective bargaining can help mitigate losses in purchasing power. Governments can also provide direct support through the tax and benefit system to protect low-income households’ net income.

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2. Safeguards are needed

To reap the benefits AI can bring to the workplace while addressing risks to workers’ fundamental rights and well-being, countries should consider concrete policy actions to ensure the enforcement of key principles for trustworthy use of AI. Governments need to ensure that AI serves to support inclusive labour markets, rather than hinder them.

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3. Ensure training for AI

Increasingly rapid AI development and adoption means that new skills will be needed, while others will change or become obsolete. Training is needed for both low-skilled and older workers, but also for higher skilled workers. Governments should encourage employers to provide more training, integrate AI skills into education, and support diversity in the AI workforce.

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Country notes

Event resources

OECD Employment outlook 2023

Artificial Intelligence and the Labour Market

iLibrary doi: 10.1787/08785bba-en

The 2023 edition of the OECD Employment Outlook presents the latest labour market developments in OECD countries. It examines the evolution of labour demand and widespread shortages, as well as wage developments in the context of high inflation. It also takes stock of the current evidence on the impact of artificial intelligence (AI) on the labour market, investigating how to get the balance right in addressing the possible negative effects of AI on labour market outcomes while not stifling its benefits.

Executive summary in other languages: FR | ES | DE | JP | IT

Read the report

> Press release

> Editorial

> Facts & figures (Infographics)

> Statistical annex

> OECD employment database

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