By Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct (@nieuwenkamp_csr)
Ahmed, from India, paid over 1,300 USD to a recruiter to accept a position as a driver in Saudi Arabia. However, upon arrival his employer confiscated his passport and refused to pay him although Ahmed worked 12 to 14 hour days. Benny, from the Philippines, invested over 2,000 USD in recruitment fees in exchange for the promise of a well-paid factory job in Taiwan. Upon arrival Benny’s wages were half of what was originally promised to him and after three years of working 12 to 17 hour days he barely managed to save enough to pay off his initial investment, returning home with no savings. These men’s stories are not unique. A quick scan of the website of Verité, an organization committed to promoting fair labour standards and combating exploitative recruitment practices, reveals many shocking histories of migrant workers who have been subject to abuse and fraud.
Exploitative recruitment of migrant workers often results in situations of de facto modern slavery. Recruitment can involve up to seven different middle men all charging a fee which means workers incur debts in the thousands of dollars before they even take up employment. Even in situations where employment is provided as promised, these upfront debts can mean that any wages a worker manages to save simply go back to paying off their debt to the recruiter.
Issues around recruitment of migrant workers have received particular attention in the context of the Gulf countries. In this region use of the Kafala system, a sponsorship-based employment system for migrant workers, is common. Under the Kafala system migrant worker’s legal residency is tied to their employer, giving employers power over working conditions and whether workers can change jobs, quit jobs, or leave the country. This system paired with exploitative recruitment practices leads to situations where workers, thousands of miles from home and severely indebted, are at the mercy of their employers.
However de facto modern slavery is by no means an issue limited to the Gulf region. Recent research produced by Verisk Maplecroft found that almost 60 percent of countries are at high risk of using slave labour.
Source: Modern Slavery Index, Verisk Maplecroft
In previous articles, I have highlighted some of regulatory approaches that nations are taking to combat modern slavery at home and throughout global supply chains, including through the UK Modern Slavery Act, trade regulations in the US prohibiting imports made with forced labour, and more generally regulations promoting increased due diligence and reporting across global supply chains to promote responsible business conduct including the EU Directive on non-financial disclosure. Additionally, earlier this year an executive order was a finalised by the Obama administration which prohibits companies from receiving US federal contracts if they recently violated labour laws. This regulation has provided even more impetus to companies to ensure that they are not linked to exploitative labour practices.
In addition, tools and standards are also being developed to target the issue of exploitative recruitment practices specifically. For example the Dhaka Principles for Migration With Dignity were launched in 2012 and provide a set of human rights based principles to enhance respect for the rights of migrant workers from the point of recruitment, during employment and through to further employment or safe return. The principles align with the UN Guiding Principles for Business and Human Rights and thus also with the OECD Guidelines for Multinational Enterprises.
Verité has developed a Fair Hiring Toolkit which provides targeted guidance around recruitment issues for various actors along the supply chain including for brands, suppliers, governments, advocates, auditors, and investors. This tool kit includes a list of red flags with regard to recruiter-induced hiring traps. For example one red flag is long ‘’supply chains’’ between the worker and employer in terms of intermediaries used in the hiring process and degrees of separation such as language barriers, cultural and social differences, and geographical distances.
Brands are also taking initiative to combat exploitative recruitment processes. Earlier this year five of the world’s largest multinationals, the Coca-Cola Company, HP Inc., Hewlett Packard Enterprise, IKEA and Unilever, launched the Leadership Group for Responsible Recruitment. This initiative focuses on promoting ethical recruitment, specifically through recognizing the employer pays principle. Under the employer pays principle, workers are never responsible for their own recruitment fees.
According to the Ethical Trading Initiative 71% of companies suspect the presence of modern slavery in their supply chains. Thus it is important to promote human rights due diligence that addresses recruitment issues throughout supply chains. In this regard the OECD has developed detailed guidance on carrying out supply chain due diligence in several sectors based off of the general principles of the OECD Guidelines for Multinational Enterprises. For example the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the global standard on mineral supply chain responsibility, provides a 5 step framework for due diligence to manage risks in supply chains of minerals including forced labour in the context of artisanal mining. This Guidance is now the leading standard for avoiding child and forced labour in mineral supply chains and has been integrated as an operating requirement in the DRC, Rwanda and Burundi.
The FAO and OECD recently jointly developed a Due Diligence Guidance for Responsible Agricultural Supply Chains which also provides due diligence recommendations to manage risks related to forced labour in high risk agriculture sectors including palm oil and cocoa. Such approaches could be applied in the context of the Thai shrimping industry as well. Additionally, the OECD is also developing a Due Diligence Guidance on Responsible Garment and Footwear Supply Chains, which provides specific recommendations for addressing risks of forced labour. This Guidance will be launched later this year and will be relevant to migrant workers in textiles factories.
Resources to help businesses identify responsible recruitment agencies are also needed. This has been one of the objectives behind the International Recruitment Integrity System (IRIS) an initiative of the International Organization for Migration. As part of its principle activities IRIS is planning to develop an accreditation framework under which members can be recognized as fair recruiters. This will be based, among other criteria, on the fact that no fee is charged to job seekers, worker’s passports of identity documents are not retained and there is transparency in labour supply chains.
A strong relationship exists between exploitative recruitment practices and forced labour. Breaking this link through promoting ethical recruitment will be very important given the vast scope of the issue as well as increasing regulation seeking to prevent these practices. The initiatives discussed in this article provide promising ways forward. In order to effectively eradicate abusive recruitment practices companies should engage in supply chain due diligence processes which take into account these risks. Commitments to the ‘’employer pays’’ principle must be scaled up. Companies faced with significant risks with regard to these issues should follow the recommendations of the Leadership group for Responsible Recruitment and use the resources being developed through the IRIS initiative.
Roel Nieuwenkamp maintains a blog where all of his articles are archived. Please visit https://friendsoftheoecdguidelines.wordpress.com/
Alastair Wood and Paolo Falco, OECD Directorate for Employment, Labour and Social Affairs
The Euro 2016 football tournament is over. Well done to everyone involved and especially to the champions Portugal. Now we can take a breather and look forward to the women’s tournament next year. Football is known for bringing people together all over the world, but although women’s football is garnering more media attention, and participation levels are rising, it is also an area where gender gaps in participation and pay are still very large: In 2012 for example, the famous Brazilian footballer, Neymar da Silva Santos Júnior had his monthly salary increased to around 1.5 million Reals at his then club Santos, a sum that would have covered the cost of the whole women’s team for an entire year. And ask Steph Houghton, the top female English player, what she thinks about earning almost 10 times less a year (£35,000) than what the top male earner, Wayne Rooney, takes home in a week (around £300,000).
Beyond the spendthrift and extravagant world of men’s football, gender inequality is also a sad reality for too many workers in the everyday labour market. Recent OECD data shows the average gender pay gap is currently around 16% in OECD countries, but the problem is not just confined to advanced economies. Looking at 16 emerging economies that cover over half the world’s population, our latest OECD Employment Outlook shows that the average gender pay gap rises to 19%. In other words, for every dollar a man makes, a woman in emerging economies only makes about 80 cents. Of course, one reason is that in the emerging world women are even more under-represented in better-paid jobs – men are more likely to be employed in the goods-producing sector and construction, while women are considerably more likely to be employed in the (less well-paid) social and personal service sector. Women are also considerably less likely than men to be in top executive positions.
But that’s not the entire story. Even when they do succeed in securing similar jobs with the same level of education, women are still paid significantly less than men. Another finding in our study indicates that often the majority of working women in emerging economies are self-employed, but they own smaller and less profitable businesses than men. This is the result of inequalities in access to credit and of gender gaps in financial literacy and business-related knowledge.
Perhaps unsurprisingly, the share of young people not in employment, education or training (NEET) is higher among women than men, partly reflecting motherhood at a young age in some emerging economies, and culturally-induced behaviour in general. This is also the case for the OECD as a whole, but the gender difference in this share is far more pronounced in emerging economies (17.9 percentage points, almost four times larger than the OECD average of 4.7 percentage points). Reducing gender gaps in labour market outcomes (participation, earnings, NEET rate, etc.) have rightly been the focus of global efforts in the last few years. G20 commitments such as reducing the gap in labour force participation rates between men and women by 25% by the year 2025 will hopefully bring millions more women into the labour market, and there are similar efforts to increase participation of women in STEM-related jobs (science, technology, engineering and mathematics) that aim to give us generations of well-paid female engineers, mathematicians and scientists.
Indeed, there are already signs of progress, but change is slow and uneven. In Chile and Costa Rica for example, the gender participation gap has narrowed by over 20 percentage points since the mid-1990s, while the largest gaps persist in both Egypt and India, where labour participation rates are over 50 percentage points higher for men compared to women. And if you are a girl and you want to become a top manager, then you may want to move to Latin America: in Chile, Colombia, Brazil, Mexico, and Costa Rica, women account for a higher share of top management and executive positions than the OECD average of 32%. Investment in education and increased efforts to encourage women to undertake careers in STEM fields may be partly responsible for this advancement.
Another piece of good news is that gender gaps in educational attainment have also been shrinking in recent decades: enrolment rates in primary and secondary education are today almost identical for boys and girls, and in many countries women are now attending tertiary education more frequently than men. Unfortunately this is not true for all socio-economic groups as girls from poorer families are still much less likely to be enrolled in school at all levels of education.
So what can we do to reduce gender gaps further? Are we condemned to passively accept that the (r)evolution towards global gender equality will be a slow-moving progression as the decades pass us by, especially in emerging countries? Definitely not. Our study helps policy makers identify actions that can have the biggest impact in helping to close the gender gap. Here are a few examples.
- Tell your girls they can be rocket scientists: Removing gender bias at a young age and encouraging more women to take up STEM-related jobs would help to end stereotypes about appropriate areas of work for boys and girls, and inspire women to enter into better paid jobs.
- Give mums a real choice to go back to work: Subsidising childcare and creating real incentives for fathers to take parental leave are two important measures of the available options to support mothers’ careers.
- Ensure women have an equal chance to access credit and be fairly treated at work: Gender discrimination by credit providers and by businesses when hiring and paying their staff, and specifically against pregnant women, should be addressed in formal legislation. Inheritance laws that favour men should be changed and governments should specifically target women when enhancing financial education.
Reverting to football, it is interesting to note that all four countries that reached the semi-finals in the last women’s European football tournament had smaller gender pay gaps than the OECD average, and 3 out of 4 had better-than-average female rates of participation in the labour market. Football is hardly representative of the real world, but the gender gap, just like football, is a truly global phenomenon and has been engrained in societies throughout the world. As emerging economies develop economically, let’s try to help them also develop effective policies for “locking in” more gender equality in their society. Beyond the moral and social imperative, it will help them emerge economically stronger – women are the biggest untapped potential for economic growth. Closing gender gaps would therefore help both emerging and developed economies score a goal for economic growth while also promoting more inclusive societies.
In the United States it’s called “the 9-to-5”; in France it’s métro, boulot, dodo –“subway, work, sleep”; in Japan it’s personified as the “salaryman” and his female equivalent, the “office lady”. Whatever it’s called, the traditional job seems to be something we all identify with.
So it was a surprising to read earlier this year that most jobs are anything but permanent, routine and predictable. According to the International Labour Organisation (ILO), only around one in four workers worldwide have what most of us think of as a traditional job – stable and full-time with predictable earnings and working for a single employer. The rest? They’re all “employed on temporary or short-term contracts, working informally often without any contract, are self-employed or are in unpaid family jobs,” as The Guardian reported.
To be sure, there are major variations. For example, even though there are signs of a slight shift towards higher rates of formal employment, very few people in poor and developing countries have formal jobs. In Sub-Saharan Africa and Southeast Asia, fewer than one in five workers are working 9-to-5, says the ILO.
By contrast, traditional jobs are much more widespread in the wealthy OECD countries. But that, too, is showing signs of change. While part-time and temporary work and self-employment still only accounts for about one in three jobs in OECD countries, it makes up a much bigger share of new jobs. Between 1990 and the crisis, around half of all new employment in OECD countries involved these sorts of jobs.
Part-time and temporary work doesn’t always have a very good reputation – often for good reasons – but it undoubtedly meets the needs of some workers. Women, who still bear the brunt of household chores and parenting duties, are much more likely to work part-time than men. Among women who work, about 40% are part-timers against 28% for working men. Young people, too, are a big presence in non-traditional jobs. Among temporary workers, close to half are aged under 30. Some may be tempted by the gig economy; others are probably finding it impossible to break into the permanent workforce.
The growth of non-traditional jobs is affecting not just workers and their families. Its impact can also be seen in society and the economy, and not least in income inequality. The main reason for this is that part-time and temporary jobs are helping to drive a trend towards job “polarisation” or a hollowing-out of the workforce. In other words, old-style jobs are vanishing in the solid middle of the workforce – middle incomes, mid-level skills – while non-traditional jobs are increasingly prevalent among both low and high-skill workers. So, goodbye full-time accountants, hello part-time cleaners and freelance designers.
This squeeze on the middle would tend to widen the income gap in any case. But its impact is exacerbated by the fact that, for low-paid workers, non-traditional jobs tend to pay less – hour for hour – than traditional jobs. Indeed, about 60% of so-called “working poor” households rely mainly on income from non-standard workers.
And lower pay isn’t the only problem facing low-skill temps and part-timers. As the OECD’s recent report on inequality, In It Together, notes, non-traditional workers “tend to receive less training and, in addition, those on temporary contracts have more job strain and have less job security than workers in standard jobs.” Non-traditional work is also rather less of a “stepping stone” to a traditional job than many people think, especially for part-timers and the self-employed.
And there’s a cost for businesses, too, from the decline of traditional jobs: As the OECD’s Stefano Scarpetta told the FT recently, the rise of temping “is not even good for the firms themselves nor for the economy, because this reduces the build-up of human capital on the job.”
Still, despite the drawbacks, it seems clear that growing numbers of people are going to be temping, working part-time or self-employed in the future. In response, countries will need to find ways of better supporting such workers to ensure they don’t slip beneath the poverty line. That may mean changes to taxes and benefits and more support in areas like training and job search to ensure that non-traditional workers can maximise their earnings and job prospects.
OECD Policy Brief: Adapting to the changing face of work
In It Together: Why Less Inequality Benefits All (OECD, 2015)
“How good is your job? Measuring and assessing job quality” – OECD Employment Outlook 2014
Where do you stand on the income scale? Find out with the OECD’s Compare Your Income web tool.
Time was when the only people who had gigs were long-haired types who stayed in bed till noon and played in bars till dawn. These days, it seems, everyone’s hopping from one gig to another – drivers, software designers, cleaners. Bye-bye full-time work, hello freedom and flexibility.
Well, maybe …
The “gig economy” has emerged as potentially one of the major shifts in what the Financial Times calls “the new world of work” (paywall). It’s certainly one of the most eye-catching. Unlike other trends in this brave new world, the gig economy seems to represent a significant shift in what it means to be a worker. Depending on where you stand, it will either liberate millions of people to become mini-entrepreneurs free from the 9-to-5 grind or imprison them in a world of low-wage self-servitude and insecurity.
If you’re confused by what defines the gig economy, you’re not alone. The term is used to refer to everything from old-style temping to the sharing economy – think amateur-hotelier sites like Airbnb or car-rental sites like RelayRides. But it seems mostly to describe various forms of self-employment and independent contracting facilitated by online platforms like TaskRabbit and Uber. Indeed, in France, uberisation has become shorthand for the gig economy.
This ambiguity is not a trivial matter. Uncertainties over the gig economy, and what it means to be a gig worker, have sparked reviews and court cases in a number of countries. In the United States, for example, a judge in California recently gave the green light to a group of Uber drivers to sue to establish their legal status. The drivers contend they are effectively employees of Uber, and so entitled to be reimbursed for expenses, including the cost of buying petrol and maintaining their cars. Uber argues that they are independent contractors, which means it is not required to cover payroll taxes, health insurance and the cost of maintaining cars. As The New York Times pointed out, the outcome of the case “could strike at the heart of the ride-hailing company’s business model.”
That’s not the only uncertainty hanging over the gig economy. As the Wall Street Journal (paywall) reported last month, despite all the hype there doesn’t currently seem to be a lot of evidence in US jobs data of a big upsurge in self-employment. The same is true, too, of the United Kingdom, according to Ian Brinkley of The Work Foundation. But, as he also points, the emergence of the gig economy may still be “too recent a development to show up in the aggregate figures”.
Indeed, given the rapid growth of services like Uber so far, it’s hard not to feel that we are witnessing genuine shift in the economy. That may well continue, if for no other reason than demographics. By many accounts, the so-called Millennial generation – the oldest of whom are now approaching their mid-30s – are particularly keen on gig working. According to research in the US, almost half of millennials “will choose workplace flexibility over pay”. Of course, a few years down the road, when they’re trying to feed children and pay school fees, Millennials’ taste for job security may well increase.
Indeed, for individual workers, that tension between the freedom of freelancing and the security of the 9-to-5 may become a core issue. “There’s certainly something empowering about being your own boss,” Arun Sundararajan of the NYU Stern School of Business wrote in The Guardian. “[…] But there’s also something empowering about a steady pay cheque, fixed work hours and company-provided benefits.”
There will be dilemmas, too, for government policy, both in terms of wider regulation of the gig economy and unleashing what some argue is its potential to create jobs. According to consultants McKinsey, it could contribute $2.7 trillion, or 2%, to the global economy over the next 20 years and add the equivalent of 72 million full-time equivalent jobs.
But will they be good jobs? That question is relevant not just to the gig economy but to other trends in the world of work, such as temporary and short-term employment, both of which are on the rise. As we’ll discuss in the next post, some fear that the benefits of these shifts may be outweighed by the loss to workers of both income and job security.
OECD work on employment
Where do you stand on the income scale? Find out with the OECD’s Compare Your Income web tool.
Marianna Georgallis, Policy & Advocacy Coordinator at the European Youth Forum
One month ago, all eyes turned to the Greek drama playing out in Europe. It has been a month of fraught negotiations, a shock referendum and a European Union and its leaders put under the spotlight, with European values of solidarity and unity questioned and, some might say, threatened. The focus has been largely on numbers – on the billions needed to avoid a Grexit, on the daily €60 cash withdrawal limit currently in place. But the ultimate reason for the past weeks of drama has not been figures – it has been people. The Greek government’s actions, right or wrong, are attempting to reverse the trend of years of wage cuts, welfare cuts, growing poverty, inequality and dire levels of unemployment. Undercutting all talk of currencies, of bailouts and banks has been the grave social impact of the economic and financial crisis and Europe’s response to it.
The statistics are there and are by now well known. The OECD Employment Outlook 2015, published earlier this month, highlights what has been mentioned in countless political speeches over the past years: Europe is suffering a social crisis. Unemployment rates give the first indication of this: Whereas unemployment has fallen below 6% in the United States and is under 4% in Japan and Korea, in the euro area the unemployment rate remains above 11%. It is clear that Europe is still lagging behind the rest of the world when it comes to employment.
These statistics are higher and more shocking when it comes to young people specifically. The share of young people neither employed nor in education or training, the so-called NEETs, has reached a staggering 40 million across OECD countries – with 27 million of these NEETs totally off the radar – a disappeared mass of young people, registered nowhere.
The enduring effects of this are a serious cause for concern. More than one in three jobseekers in the OECD has been out of work for 12 months or more. Long-term unemployment has serious consequences, ranging from deterioration of skills, lack of confidence which can lead to mental health issues and an impact on the economy through inactivity and costs of welfare provision such as unemployment benefits. However, the new finding of this year’s Employment Outlook is that a person’s long-term career prospects are largely determined in the first ten years of their working life. Long-term spells of unemployment can have an influence well into one’s career in terms of earnings – meaning that upward earnings mobility can be reduced having been long-term unemployed as a young person. This in turn raises income inequality and thus impacts economic growth through, amongst others, perpetuating under-investment and lower aggregate output.
However, it’s not just about having a job. The European Youth Forum has been calling for an end to the ‘any-job-will-do’ approach which has persisted since the onset of the crisis, with no real attempt from European policy-makers to address this. The Outlook shows that youth, alongside low-skilled and informal workers, typically hold the poorest quality jobs. The disproportionate increase of young people on temporary contracts over recent years is not a case of voluntary temporary employment – it is clearly a situation of forced, precarious work. Unpaid internships are a clear example of this – you would be hard pushed to find a young person, fresh out of their studies, willing and happy to work for free for 6 months – yet the 5 million interns in Europe, almost half of whom are unpaid, show that this is unfortunately the current reality.
Quality employment is a right, enshrined in several universal legal frameworks. Unfortunately this has been ignored by too many governments and EU leaders; focusing on job quality is perceived as a drag on job creation. The Employment Outlook disproves this, however, showing that the best performing OECD countries in terms of employment rates are also the ones that have the highest level of job quality. This is why the clear message of the Outlook is that governments must take action to foster stronger employment growth, implementing direct measures to improve workers’ access to productive and rewarding quality jobs.
The European Youth Forum views the new Investment Plan for Europe as an opportunity to do this. If the focus is on investment in quality job creation, particularly in emerging sectors with great potential such as the green economy and ICT, there is hope yet that the social crisis, experienced in Greece but also across the board, can begin to be reversed. Governments need to fulfil their duty of ensuring that all young people are able to access their social and economic rights, in order to achieve independence and autonomy, and thus contribute to a healthy economy and an inclusive society in Europe and the world.
Employment Outlook editor Paul Swaim writes about this year’s edition here
The OECD’s Employment Outlook argues that time is running out to help workers move up the jobs ladder
Paul Swaim, Senior Economist in the OECD Employment, Labour and Social Affairs Directorate and Editor of the OECD Employment Outlook
The recovery is underway, but millions of workers risk being trapped at the bottom of the economic ladder. While unemployment is on a downward trajectory in most countries, about one-half of the crisis-related increase in joblessness in the OECD area still persists more than seven years after the crisis began. Around 42 million persons were without work in May 2015 across the OECD, 10 million more than just before the crisis. Long-term unemployment is a particular concern. The number of persons who have been unemployed for a year or longer is 77% higher than then it was just before the crisis struck in 2007. Young people in the OECD are twice as likely to be unemployed as prime-age workers. More than 40 million 15-29 year-olds (or 1 in 6 youth) across OECD countries are neither employed nor in education or training, the so-called NEETs. More than half of all NEETs –27 million young people – have dropped off the radar completely. They have literally disappeared from their country’s education, social, and labour market systems. Whatever their age, the long-term jobless can become demoralised and are sometimes stigmatised by potential employers, so there is a real risk that some members of this group will become permanently disengaged from the labour market.
Not only is the labour market recovery still far from complete, but the OECD Employment Outlook 2015, released today, argues that time is running out to prevent millions of workers from being left trapped at the bottom of the economic ladder. Many of the youth who finished their schooling during the crisis years and have struggled to gain a secure toe-hold in the labour market may be approaching the “make or break” point so far as being able to ascend the career ladder. Indeed, one of the striking findings in this edition of the OECD Employment Outlook is that long-term career prospects are largely determined in the first ten years of working life. Some of the experienced workers who have lost their jobs during the crisis are also having a difficult time putting their careers back on track. For example, a number of those who lost jobs in the manufacturing or construction sectors will need to make a career switch to growing service industries and often to adapt their skills if they are to avoid becoming trapped on the margins of the labour market.
The scarring effects of the crisis on the hardest hit groups are compounded by longer-run trends that are making it more difficult for low-skilled workers to move out of precarious, low-paid jobs into jobs that offer opportunities for career advancement. If the missing rungs are not put back into the jobs ladder, the legacy of the crisis is likely to include a further permanent increase in economic inequality above the already record high levels that had been reached before the crisis in many OECD countries. Governments need to take action now if they are to avoid a permanent increase in the number of workers stuck in chronic unemployment or cycling between unemployment and low-paid jobs.
Polices to support upward mobility in the labour market are a priority
The Employment Outlook underlies the high social costs resulting from earnings inequality by showing that a substantial portion of the persons who are unemployed or in low-paid jobs at one point in time are at a high risk of becoming trapped at the bottom of the earnings ladder. Policy makers should thus place a high priority on assuring that the crisis does not leave additional workers permanently excluded from work or trapped in low-paying and insecure jobs, thereby ratcheting inequality up another notch.
Concerns about a possible increase in inequality are heightened by the fact that most OECD economies had already become significantly more unequal in the distribution of income during the decades preceding the crisis, reflecting a large rise in earnings inequality. It follows that the challenge to promote upward mobility at the bottom of the jobs ladder is much more than a cyclical issue related to the global crisis. It is also a key to helping all workers to participate successfully in a rapidly evolving economy. Technological change and the digital revolution in particular have been important drivers of this trend by skewing job demands towards high-level skills and putting downward pressure on the pay of less skilled workers. These structural changes in the economy are part of a continuous process of adaptation to new technologies and processes, as well as globalisation. In this context, workers must have the opportunity to build the skills needed by employers, but also to adapt them to changes in labour demand and to use their skills fully on the job. This is of crucial importance to ensure human capital plays its expected role in boosting innovation and productivity, but also to make growth inclusive.
Governments need to begin restoring the missing rungs back in the jobs ladder and help workers to climb them
The Employment Outlook analyses in detail three types of policy measures that are particularly important for improving the labour market prospects of the workers who are currently stuck at the bottom of the economic ladder. First, effective activation measures are needed that connect jobseekers with suitable jobs. Second, skill deficits in the workforce must be addressed since one of the strongest predictors of poor career outcomes is a low level of skills. Finally, direct measures to raise job quality have an essential role to play, especially in shoring up the earnings of low-paid workers. The importance of these types of measures has long been apparent, but their importance has been magnified by the crisis and by the increase prevalence of temporary and other atypical jobs in a number of countries. Career advancement opportunities are often limited for workers in these types of jobs.
Turning the recovery into an opportunity to promote inclusive growth
Going forward, the most general lesson for labour market policy makers is that more attention should be paid not only to the number of job opportunities available, but also to the quality of these jobs and who requires targeted assistance to access them. In order to promote full recovery from the crisis and help workers to thrive in an ever-changing economy, governments must take action to foster stronger employment growth and improve workers’ access to productive and rewarding jobs. Doing so will help to repair the broken rungs of the jobs ladder and reverse the long-run increase in inequality. It will also strengthen the sustainability of economic growth, another key requirement for promoting inclusive growth.