About 22m fewer people are in work in advanced economies than before the coronavirus pandemic, according to research by the OECD which forecasts that labour markets will not recover until the end of next year.
Rich countries could face a sustained rise in long-term unemployment, warned the report published by the OECD in Paris on Wednesday. This is because the low-skilled workers who were most likely to lose their jobs at the start of the pandemic are ill-equipped to move into the sectors where hiring is strongest.
Meanwhile, businesses are likely to bring back employees who are still being supported through short-time work schemes before they create new jobs at scale, risking the emergence of a gulf between those who have continued to work and those who have lost jobs and income, the OECD said in its annual employment outlook.
Of the 22m people who remain out of work across the OECD, 8m are unemployed and 14m are classed as inactive.
“A widening gap may develop between those who have weathered the crisis through reduced hours and short periods on temporary lay-off, and those who have found themselves jobless — increasingly distant from the labour force, exhausting benefit entitlements and risking long-term scars,” the OECD said.
By the end of 2020, the number of people who had been unemployed for more than six months was 60 per cent up on pre-pandemic levels across OECD member nations.
“At the beginning of the crisis, low-skilled workers were more likely to lose their jobs. High-skilled workers were more likely to reduce their working time,” said Stefano Scarpetta, the OECD’s director for employment, labour and social affairs.
The OECD said there was evidence that many of the jobs hit hardest by the pandemic were already at risk of being replaced by automation before the crisis, and could now disappear as the adoption of digital technologies gathers pace. It pointed to big falls in job postings for secretaries in Australia, data entry clerks in Canada, and travel agents, word processors and typists in the US.
The report noted increasing demand for professionals in healthcare and green energy in many rich economies.
Scarpetta said this was evidence that governments should make job retention schemes more targeted to ensure they did not prop up businesses that are unlikely to survive in the open market. Governments should also provide incentives for businesses to create jobs, and steer workers towards sectors that are expanding through hiring subsidies, mobility bonuses and concerted efforts to help adults retrain, he said.