Still out of pocket: Recent labour market performance and wage developments

This chapter examines the evolution of labour market performance since the onset of the global financial crisis. OECD labour markets are back to pre‑crisis levels in terms of job quantity, with only few notable exceptions, while a more mixed picture emerges as regards job quality and inclusiveness. In spite of this, nominal wage growth remains remarkably lower than it was before the crisis for comparable levels of unemployment, and the shift of the relationship between unemployment and wage growth has continued during the recovery. The chapter investigates the factors accounting for the persistent wage growth slowdown. While low inflation expectations and productivity growth deceleration remain the main drivers of observed patterns, the dynamics of low‑pay jobs and the wages associated to them have also been key factors accounting for the overall decline in wage growth.