Stefano Scarpetta

Direcotr for Employment, Labour and Social Affairs

Rapporto CNEL sul mercato del lavoro, Roma 30 Settembre, 2014

2

• Unemployment has started to decline in the OECD, but further progress is required as the job recovery has not gone very fast yet.

• People have borne considerable personal, economic and social costs that may prove to be long-lasting:

– long-term unemployment remains persistently high,

– many employees have experienced economic hardship.

• 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.

The recovery is gaining momentum but there is no time for complacency

3

Unemployment has started to decline, but further progress is required…

Italy Euro area France OECD United Kingdom

United States Canada Germany Japan0

2

4

6

8

10

12

14

Unemployment ratePercentage of the labour force

Current value (Q4 2013) Start of the crisis (Q4 2007)Country-specific peak Projected value (Q4 2015)

%

4

… since the job recovery has not gone very fast yet.

Canada United Kingdom

Japan Germany United States OECD Euro area France Italy41

43

45

47

49

51

53

55

57

59

61

63

Employment-to-population ratioPercentage 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)

%

5

• 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 workers and their families have experienced economic hardship as a result of declines in the spending power of their earnings from work.

People have borne considerable personal, economic and social costs

6

Long-term unemployment remains persistently high.

Canada United States United Kingdom

OECD France Japan Germany Euro area Italy0

10

20

30

40

50

60

Long-term unemployed (more than one year) as a percentage of total unemployed

Q4 2013 Start of the crisis (Q4 2007)

%

7

Labour costs have grown at a much slower pace. This has played an important role in helping the labour

market weather the crisis…

Japan

Euro areaOECD Italy

United States

Germany

France

Canada

United Kingdom-4

-2

0

2

4

6

Unit labour cost growthAverage annualised growth rate

Q1 2009-Q4 2013

Q4 2007-Q1 2009

%

-2

-1

0

1

2

3

Real wage growthAverage annualised growth rate

Q1 2009-Q4 2013

Q4 2007-Q1 2009

%

8

… but the flip side is that many workers saw the real value of their earnings fall.

FIN NLD DNK SVN AUS LUX ITA POL AUT FRA BEL ALL DEU USA CZE GBR ESP GRC PRT EST0

10

20

30

40

50

60

70

Incidence of real wage cut in 2010Percentage of full-time job stayers

(aged 15-64, staying at least one year with the same employer)

Nominal wage cut Real wage cut

%

9

... since fixed term contracts are increasingly used for new hires…

GBR LTUDNK

ESTAUT

LVA

CHENOR

LUX

BEL IRL ISLDEU

SVKHUN ALL GRC

CZE FIN ITANLD FRA

SWESVN

PRTPOL

ESP0

10

20

30

40

50

60

70

80

90

Fixed-term contracts among new hiresPercentage of employees with no more than three months of tenure

2011-12 2006-07

%

10

… albeit atypical jobs are not an automatic stepping-stone to permanent work.

NLD GRC EST FRA ESP IRL ITA AUT BEL POL ALL PRT SWE LUX CZE SVN GBR FIN HUN SVK NOR ISL0

10

20

30

40

50

60

Three-year transition rates from temporary to permanent contractsShare of temporary employees in 2008 that were employed as full-time

permanent employees in 2011%

11

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.

Not just more jobs but also better jobs are needed

12

There is little sign of a trade-off between job quantity and job quality across countries…

0.0

0.2

0.4

0.6

0.8

1.0

TUR

ESP

GRC SVK

EST

POL

HUN MEX

SVN

CZE

PRT

KOR

JPN ISR

ITA

FRA

USA

AUT

CAN

DEU

GBR NZL

LUX

AUS

BEL

IRL

SWE

FIN

NLD

DNK CHE

NOR

Indices from 0 (low quality ) to 1 (high quality )

Earnings quality Labour market security Quality of the working environment

High employment rate (in the top two deciles) Low employment rate (in the bottom two deciles)

Read more about our work

Website: www.oecd.org/employment/outlook

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Thank you