The average unemployment rate across the OECD remains at a low of 4.9% in May 2026, according to the latest OECD Employment Outlook. TUAC warns that this apparent strength masks deeper challenges for workers. Signs of cooling are already emerging: unemployment rates are ticking up in many economies and new job postings are slowing. Most critically, real wages in one-third of OECD economies have still not recovered the purchasing power lost since the onset of the cost-of-living crisis.
A number of structural factors contribute to depress workers’ wages and bargaining power, despite strong headline employment rates. For example, employer-imposed restrictions on worker mobility are one example: the OECD estimates that non-disclosure agreements cover roughly half of workers in surveyed countries, with non-compete clauses binding between 20% and 33%. Widespread no-poaching and wage-fixing arrangements between employers add to the problem. The OECD finds these anti-competitive practices suppress wage growth and stifle productivity by restricting movement between firms and industries – evidence TUAC argues confirms that employer market power remains a central barrier to fair wages. Tertiary education and training – which should deliver the strongest wage gains – offers little relief. Wage returns to education and training are declining, and non-formal training, much of it employer-provided, disproportionately benefits workers already in higher-paid occupations. The Employment Outlook shows that employers concentrate investment in their most productive staff, reinforcing existing wage gaps rather than narrowing them. Trade unions insist this unequal access strengthens the case for a collectively bargained right to training and paid training leave.
The picture worsens at the regional level. Unemployment rates in the worst-performing regions can be up to four times higher than in the best-performing regions within the same country, with individual characteristics such as age, gender and education explaining only between one-third and one-half of these gaps. The OECD acknowledges that while promoting greater labour mobility can improve individual chances, it also risks widening existing divides, as younger, better-educated workers are most likely to relocate.
Trade liberalisation – particularly following China’s accession to the WTO – has deepened these disparities, contributing to the loss of approximately one in seven manufacturing jobs in the United States between 2000 and 2018, one in ten in Western Europe and one in twenty-three in Canada. New OECD evidence in the Employment Outlook finds that even where employment recovers, replacement service-sector jobs tend to offer lower wages – not least because manufacturing retains higher trade union density and stronger bargaining coverage.
Low unemployment means little in itself, if too many jobs are insecure, underpaid, or concentrated in only a handful of places. For too many workers and their families across the OECD, decades of global competition, deindustrialisation, stagnant wages and rising inequality have meant that economic growth has not translated into greater security or better living standards.
TUAC welcomes the Outlook’s finding that eight out of ten countries reforming temporary contracts after the pandemic made their use more restrictive, with Spain’s 2021 reform demonstrating that reducing labour market dualism promotes more stable employment. But trade unions urge governments to go much further. Strengthening collective bargaining, pursuing ambitious mission-oriented industrial policies, and investing in less developed regions are essential to ensure economic growth delivers genuine security for all workers.
