Connecting the right people to the right jobs benefits both individuals and the economy. This is especially true as technological innovation, aging populations, and demand for new skills drive the job market in new directions. Although overall unemployment continues to decrease in the U.S. and Canada, and both countries see encouraging signs for youth, issues such as discouragement among the long-term unemployed, and high levels of wage and skills inequality still need to be addressed

1. OECD EMPLOYMENT OUTLOOK 2015:
HOW DOES THE UNITED STATES COMPARE?
Paris, 9 July 2015
Stefano Scarpetta
Director
Employment, Labour and Social Affairs
OECD

2. OECD Employment Outlook 2015
• A new edition of the OECD’s annual flagship publication on labour
markets and employment policy:
o Editorial – Time is running out to help workers move up the jobs ladder
o Chapter 1 – Recent labour market developments with a focus on minimum wages
o Chapter 2 – Skills and wage inequality
o Chapter 3 – Activation policies for more inclusive labour markets
o Chapter 4 – The quality of working lives: Earnings mobility, labour market risk and
long-term inequality
o Chapter 5 – Enhancing job quality in emerging economies
o Statistical annex
• Launched in Paris by Secretary-General Gurría at a press
conference on 9 July at 11:00 a.m. CEST

3. High unemployment has unwound more quickly in the US than
in Europe, but long-term unemployment remains too high
Source: OECD Short-Term Labour Market Statistics Database.
A. Harmonised Unemployment rate
Percentage of total labour force
B. Incidence of long-term unemployment
Percentage of total unemployment
2468101214 United States Japan Euro area OECD
3
4
5
6
7
8
9
10
11
12
13
%
5
15
25
35
45
55
%

4. Declining participation in the US contrasts with recent
increases in other countries and could become a drag on living
standards, especially in the context of population ageing
A. Labour force participation rate
Percentage of working-age population (ages 15-64)
B. Employment rate
Percentage of working-age population (ages 15-64)
2468101214 United States Japan Euro area OECD
70
71
72
73
74
75
76
%
62
64
66
68
70
72
74
%
Source: OECD Short-Term Labour Market Statistics Database.

5. Real wages growth has been relatively strong in the
US, but has slowed since 2007
Real wage growth (2000 wage level = 100)
Source: OECD estimates based on National Accounts.
85
90
95
100
105
110
United States Japan Germany OECD

6. Earnings inequality is high and persistent
in the United States
0.1
0.2
0.3
0.4
0.5
Long-time inequality Within-year inequality
a) Simulations refer to individuals aged 15 to 54 in the reference year (20-54 for Denmark and Japan).
Source: OECD Employment Outlook 2015, Chapter 4.
Difference between within-year inequality and long-term inequality (Gini index) due to
earnings mobility (movements in and out of work and up and down the earnings ladder
over 10 yearsa)

7. The impact of UI in reducing insecurity and long-term
earnings inequality is relatively small in the US
a) Simulations refer to individuals aged 15 to 54 in the reference year (20-54 for Denmark and Japan).
Source: OECD Employment Outlook 2015, Chapter 4.
The proportional change in labour market risk (coefficient of variation of individual earnings ) and long-term inequality
(Gini coefficient of long-term earnings across active persons ) due to effective unemployment insurance, based on
simulations over ten yearsa
-30
-25
-20
-15
-10
-5
0
%
Long-term inequality Earnings risk

8. Cognitive skills are relatively low in the US
and vary a lot across working-age adults
Mean, 1st and 9th deciles of numeracy scores, all employees, 2012
175
205
235
265
295
325
355
P90 P10 Mean
a) OECD calculated as the simple, unweighted country average.
b) The Survey of Adult Skills only covered Flanders (Belgium) and England/Northern Ireland (United Kingdom).
Source: OECD Employment Outlook 2015, Chapter 2.

9. The pay premium for cognitive skills is
particularly high in the US
a) The Survey of Adult Skills only covered Flanders (BEL) and England/Northern Ireland (GBR).
Source: OECD Employment Outlook 2015, Chapter 2.
Percent increase in hourly wages for an increase of one standard deviation in numeracy
skills, 2012
0
5
10
15
20
25
%

10. While US workers have relatively low numeracy
skills, they make good use of them at work
Average numeracy scores and average skill use levels, 2012
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
250
255
260
265
270
275
280
285
290
295
Numeracy proficiency scores (left axis) Numeracy use (right axis)
a) OECD calculated as the simple, unweighted country average.
b) The Survey of Adult Skills only covered Flanders (Belgium) and England/Northern Ireland (United Kingdom).
Source: OECD Employment Outlook 2015, Chapter 2.

11. Low parental education is an important
barrier to skills acquisition in the US
High versus low parental education wage ratio before and after controlling for
skills distribution and price effectsa
a) OECD calculated as the simple, unweighted country average. Wage gaps are expressed as the log of the D9/D1 ratio.
b) The Survey of Adult Skills only covered Flanders (Belgium) and England/Northern Ireland (United Kingdom).
Source: OECD Employment Outlook 2015, Chapter 2.
0.6
0.8
1
1.2
1.4
1.6
1.8
Raw Skills distribution Skills prices

12. The level of the minimum wage in the
United States is low by OECD standards
Minimum wages as a percent of median wages of full-time employees, in gross terms, 2013
30
35
40
45
50
55
60
65
70
%
Note: Germany: the minimum-wage level in 2015 is expressed as proportion of the projected 2015 median wage. Projections are based on earnings
data from the OECD Economic Outlook Database.
Source: OECD Employment Outlook 2015, Chapter 1.

13. US lone parents would pocket about 40% of any
increase in the minimum wage in the absence of
other adjustments
Share of MW increase that is left after taxes and benefit reductions,a lone parent family, 2013
-20
0
20
40
60
80
100
120
%
Net gain Employee income tax and social contributions Benefit reduction
a) Calculations refer to a 5% minimum-wage increase and a single-adult household with two children. They assume that all tax and benefit provisions remain as
they were before the increase, and account for minimum-income and other means-tested benefits that are primarily income related and are typically accessible
for low-income families. For Japan, calculations reported in this figure use minimum wages for Tokyo and social assistance rates for Tokyo grade 1-1.
b) Minimum wage levels refer to 2015 for Germany.
Source: OECD Employment outlook 2015, Chapter 1.

14. Some policy lessons for the US
• Better activation and retraining measures are needed to:
o Help the long-term unemployed back into jobs
o Connect discouraged workers and other inactive persons of working age with
appropriate jobs
• Measures to encourage higher participation are also needed:
o Paid-leave for new parents
o Making the Child and Dependent Care Credit refundable
o Greater assistance and stronger financial incentives for disability benefit
recipients to work

15. Some policy lessons for the US (continued)
• Education and training measures to overcome skill deficits:
o Reducing school failure through early childhood interventions for at-risk families
o Second-chance programmes for adults with weak literacy and numeracy skills
o Improved college affordability
• Boosting take-home pay and career advancement opportunities at
the bottom of the jobs ladder:
o Raising the Federal minimum wage in coordination with adjustments to the EITC

16. 16
Thank you
Contact: Stefano.Scarpetta@oecd.org
OECD Directorate for Employment, Labour and Social Affairs, via www.oecd.org/els
Follow us on Twitter, via @OECD_Social
OECD Employment Outlook, via www.oecd.org/employment/outlook
OECD Employment database, via www.oecd.org/employment/database