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OECD countries: Real wages overall lower than pre-Covid levels

OECD countries: Real wages overall lower than pre-Covid levels

OECD countries: Real wages overall lower than pre-Covid levels

Real wages are “rising” in most countries in the Organisation for Economic Co-operation and Development (OECD). But in almost half of them they remain “below 2019 levels,” she said in a study published on Tuesday.

Real wages, which more or less correspond to purchasing power, “are now rising in most OECD countries, largely due to lower inflation,” the Organization for Economic Cooperation and Development notes in its Employment Outlook 2024. “However, they are still below 2019 levels in just under half of countries,” the organization continues.

In France, wages are relatively stable

Thus, according to the study, in the first quarter of 2024, “annual real wage growth was positive in 29 of the 35 countries for which data are available.” But in 16 of them, wages remain below the level of the fourth quarter of 2019, before the Covid pandemic.

“While real wages are recovering some of their lost ground, profits are beginning to absorb rising labour costs,” the OECD notes. “However, in many countries, profits will be able to absorb further wage increases, especially as there is no sign of a wage-price spiral,” it stresses.

While household consumption in France is still lower than pre-Covid levels, according to INSEE data, real wages remained “relatively stable” between late 2019 and early 2024. But they fell in Germany, Belgium, Spain and Italy, for example, the OECD notes.

“Unemployment at its lowest level”

The organisation believes that “disinflation will support purchasing power”. Headline inflation “is expected to decline to 2.3% in 2024 and to 2% in 2025”, the OECD writes, estimating that “employment growth is expected to slow and unemployment to increase slightly, reaching 7.8% at the end of 2025”.

The unemployment rate was at its lowest in May 2024, with an average of 4.9%, according to data released Tuesday, the organization said.

However, Spain recorded a job seeker rate of 11.7%, Greece – 10.6%. France closes the top three with 7.4% of unemployed. Among the good indicators are the USA (4.1%), Germany (3.3%) and Japan (2.8%).

Source: Le Parisien

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