Skip to main content
Home » Future of work » Rebuilding a future that works for all
Future of Work 2020

Rebuilding a future that works for all

iStock / Getty Images Plus / fizkes

Stefano Scarpetta

Director, Employment, Labour and Social Affairs, OECD

In only three months, the COVID-19 pandemic has become a public health crisis with no parallel in living memory. It is driving the global economy to the deepest recession since the Great Depression.

It’s already hard to remember, but back at the end of 2019, we were celebrating record-high employment rates in the OECD at 68.9%. Yet, even then, many workers and companies were feeling mounting pressures of globalisation, digitalisation and other megatrends that had been profoundly changing how we live and work.

At the OECD, we had estimated that 14% of jobs were at risk of automation, but another 30% were likely to be largely overhauled in the coming decade. Technological progress and the integration of global supply chains were proving to be a bonus for many workers with high skills and in expanding occupations, but a challenge for workers with low or outdated skills in declining occupations. Inequalities in earnings and job quality had been widening in many countries.

The impact of COVID-19 on low-paid workers

When COVID-19 hit, those widening disparities were laid bare. Most high-paid workers stayed home and managed to work remotely, while many low-paid workers had to continue providing essential services during the lockdowns, often at a substantial risk of exposure to the virus.

In Europe, job retention schemes now provide support to about half of dependent employees in France, 40% in Italy, and 25-30% in Austria, Germany and the United Kingdom.

Own-account and temporary workers, and those working short hours – about a third of the workforce in OECD countries – were the first to lose their job. What’s more, they often have less access to social safety nets and less generous benefits than workers with a permanent contract. These gaps in social protection are untenable in the COVID-19 crisis.

Response to the crisis

OECD countries have taken unprecedented measures to respond to this unprecedented crisis, for example by improving access to, and the generosity of, job retention schemes and unemployment benefits. In the US alone, more than 40 million people have filed unemployment benefit claims since mid-March. In Europe, job retention schemes now provide support to about half of dependent employees in France, 40% in Italy, and 25-30% in Austria, Germany and the United Kingdom. A number of countries eased access to existing minimum-income schemes; the US, Japan and Korea introduced or announced universal cash payments to the entire population.

Will these massive public transfers be enough? They might be if they are maintained for months to come. But this will probably not be feasible or efficient as the economic activity restarts. For example, keeping job retention schemes unconditional will give firms incentives not to go back to normal even if their activity resumes, or is no longer viable. Withdrawing these schemes too soon, on the other hand, could generate an unbearable wave of layoffs.

The policy makers’ challenge

Policy makers today face the daunting task of moving the economy out of intensive care onto the recovery phase, where support needs to be differentiated according to the conditions of firms, sectors and workers. The megatrends that were already re-shaping the world of work may have even accelerated.

Lockdown measures have forced the adoption of ICT technologies at a pace never seen before, and some even suggest that firms may be pushed to replace frontline workers with machines to avoid the risk of infection and disruption. And, although there is much talk about the end of globalisation, it’s unlikely that countries will revert to complete economic self-sufficiency: value chains may become shorter, but benefits from cutting back trade would be small and unlikely to last.

Last year, the OECD called for a “transition agenda for a future that works for all” to re-shape a more inclusive and resilient labour market. The COVID-19 crisis has made this inclusive transition even more urgent, and, at the same time, has prompted decisive action to reduce gaps in social protection.

Building on the impressive efforts made during lockdown, countries now have to walk a tightrope with the same determination to revamp the economy, and build a more inclusive and resilient labour market.

Next article