A worker wearing a protective mask, gloves and face shield disinfects a cash register in an Ikea store.

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The Organization for Economic Cooperation and Development announced on Wednesday that up to 22 million jobs have been lost in industrialized countries due to the Covid 19 pandemic.

The OECD’s Annual Employment Outlook says that job security programs introduced during the height of the coronavirus crisis saved around 21 million jobs. But rich countries are at risk of rising long-term unemployment rates as many of the low-skilled workers displaced by the pandemic struggle to fill new positions.

“Many of the jobs lost during this pandemic are not being restored,” said Stephane Carcillo, Head of Jobs and Income at the OECD, during a briefing on the report’s release.

In May 2021, unemployment in OECD countries fell to 6.6% but remained at least 1% above pre-pandemic levels. Of the 22 million unemployed across the OECD, 8 million are unemployed and 14 million are considered inactive.

Employment recovery forecast for the third quarter of 2023

The OECD assumes that total employment in the member states will not normalize until the third quarter of 2023. However, individual countries – like those in the Asia-Pacific region – that have weathered the crisis better may improve faster.

The effects of this persistent underemployment will be felt most strongly by vulnerable women and low-skilled workers, who are disproportionately represented in sectors hit hard by the pandemic.

With the youth, the scars in employment and wages could be felt for a long time.

Stefano Scarpetta

Director of Employment, Labor and Social Affairs, OECD

Young people are also likely to be more affected than the wider adult workforce, the report said.

“Young people continued to feel the scars in employment and wages for a long time,” said Stefano Scarpetta, director of employment, labor and social affairs at the OECD.

According to the OECD, the impact on young people was at least twice that of adults in general – and teenagers in Canada, the US, Mexico and Spain were hardest hit.

Young people badly affected

This against the background of an already difficult employment landscape for young people. According to OECD data, it took a full 10 years for youth employment to return to normal levels after the global financial crisis of 2008.

To avoid this “scar effect”, this time bigger measures would have to be taken to invest in young people – for example through training and retraining, said Scarpetta.

“The core message is: this time we should do better. We cannot have young people who are so badly affected,” he said.

In the meantime, the advent of teleworking is a bright spot in the situation and encourages employers to be more flexible and inclusive in their labor policies.

In the future, according to Scarpetta, there is “potential for the further spread of teleworking”. However, accessibility challenges remain to be addressed, both in terms of who can work remotely and the resources required to do so.

“Otherwise there could be another gap in the labor market,” he said.