To decrease wages could be counterproductive, OECD warns

The OECD has published „Employment Outlook 2014“ comparing the labour market in the member countries.

The unemployment in most member countries of the Organisation for Economic Cooperation and Development (OECD) will stay above the pre-crisis level. The employment outlook for 2015 is among the OECD member countries rather different.

The OECD predicts that in the eurozone it will sink to 11,2 percent, in the Czech Republic to 6,6 percent and in Germany and Austria under 5 percent. Currently, there are 45 million people unemployed in the OECD member countries which is by 12,1 million more than before the crisis.

The real wages increase has been stoped in 2009 and in the most OECD countries, the wages decreased by 2-5 percent. In the Czech Republic the decrease amounted to 3,3 percent in 2013. In its report, the OECD warns that any further decrease of the wages could drive the low-income workers into poverty.

„While the wage decrease has helped to many countries with higher deficits to keep jobs and restore competitiveness, their further decrease could be counterproductive, won’t create jobs and won’t support growth,“ the OECD secretary general Angel Gurría stressed.

The long-term unemployement has probably reached its peak, but it remains to be the main threat for the future. In the Czech Republic, the long-term unemployed have made out 44,9 percent of all unemployed persons in the first quarter of 2014. In the 15-24 year age group, the long-term unemployed represented 33,3 percent of the total.