The Organisation for Economic Co-operation and Development (OECD) has published a new report highlighting structural problems in global labor markets and rising geopolitical risks. The Labor Market Outlook Report, prepared under the theme 'Regional Inequalities in Occupations and Incomes,' reveals that although employment has reached record levels, unemployment is rising and wage growth is slowing.
Unemployment rate rises
According to the report, in the first quarter of 2026, the employment rate in OECD countries reached 72.1 percent, the highest level on record. However, the unemployment rate began to rise in the same period. Unemployment, which was 5.5 percent in March 2025, rose to 5.8 percent as of March 2026. Youth unemployment rates continued to remain above the overall level in many countries.
Recovery in real wages slows
The recovery in real wages that began after the rise in inflation has also lost momentum. In about one-third of OECD countries, real wages are still below the levels seen before inflation surged in 2022.
Geopolitical risks and energy costs as pressure factors
The report warned that geopolitical uncertainties, rising tariffs and high energy costs could push inflation up again in the coming period. It assessed that these developments could further slow the recovery in labor markets and wage increases.
Regional inequalities deepen
Regional labor market disparities in OECD countries are also striking. In more than half of the countries, the employment rate gap between small regions can exceed 20 percentage points. Limited labor mobility from low-employment regions to high-employment regions deepens inequality. While capitals and large cities offer more economic opportunities, those living in lagging regions face lower incomes and career prospects.
The OECD stressed that despite historic employment rates, the rise in unemployment, the slowdown in wage growth and regional inequalities need to be closely monitored. It assessed that geopolitical developments and economic uncertainties in particular will be decisive for the future performance of labor markets.
