Total employment across OECD member countries reached an all-time high of 670 million in May, while the unemployment rate held at 4.9 percent, near historic lows. The organisation’s Employment Outlook 2026, released on Tuesday, describes labour markets as “strong and resilient” but warns that real wages have yet to recover fully from the inflation shock in roughly one-third of member economies. Viewed from Paris, the persistence of this wage gap—alongside renewed energy-price pressures—constitutes the central fault line in an otherwise robust picture.

Labour scarcity, driven by demographic shifts, and a post-pandemic tendency among firms to hoard workers have supported employment levels even as GDP growth has disappointed. Yet productivity gains remain elusive, and the latest surge in energy costs is now feeding back into consumer prices, eroding purchasing power. OECD Secretary-General Mathias Cormann pointed to education, skills, mobility and technology adoption as the necessary levers to lift productivity and, with it, real incomes. The report projects aggregate employment growth of just 0.3 percent in 2026 and 0.6 percent in 2027, with the unemployment rate staying close to current levels.

Italy illustrates the divergence between quantity and quality of work. Its employment rate has climbed to a record 62.8 percent, but that still leaves a gap of more than nine percentage points to the OECD average, concentrated among women and young people. Real wages there are 6.1 percent below their level in the first quarter of 2021—the largest shortfall of any major OECD economy—and the organisation forecasts a further decline of 0.9 percent this year. Regional disparities compound the problem: in the weakest Italian provinces, unemployment runs more than four times higher than in the strongest, against an OECD average ratio of about two. In Argentina, where the labour market lies outside the OECD but faces similar strains, the pressure rate—combining the unemployed and those seeking additional hours—stood at 23.6 percent in early 2026, with underemployment rising.

On the question of artificial intelligence, a first-of-its-kind Australian government report finds no evidence yet of mass lay-offs. Employment in the occupations most exposed to AI grew 5.6 percent between late 2022 and early 2026, compared with 9.5 percent in the least-exposed, and software development roles expanded by a quarter. Canberra will now conduct regular monitoring. Deutsche Bank’s global head of macro and thematic research, Jim Reid, told Bloomberg that economic history offers grounds for optimism: every major technological breakthrough has raised fears of job destruction that never materialised in aggregate. The next milestones to watch are the evolution of real wage indices through the second half of 2026, as energy-driven inflation works its way through advanced economies, and the first quarterly update of Australia’s AI employment tracker.