The global economy is improving. Just don't tell many of the people who live and work in it.
That's according to the Organization for Economic Co-operation and Development (OECD), which has published a report about the labor conditions of its nearly three dozen member countries, including the U.S., Japan, and European countries such as the U.K. While economic conditions have generally improved, the recovery is far from complete, and remains uneven across countries.
One of the ailments of today's job market is a shift toward part-time work, leaving millions of workers earning less and with fewer opportunities for job growth, the report noted. About 43 million people across the OECD countries are unemployed, or 11 million people more than before the financial crisis. Long-term unemployment is still "unacceptably high," and some in this group, especially young workers, may have become disengaged from the labor market.
On top of that, minimum wages need to be reset regularly to match the cost of living, or else workers will face an erosion in their real wages, the group warned. That has happened in the U.S., which just marked the sixth-anniversary since the last minimum wage hike.
Minimum wage U.S. workers with two children to support need to work almost 60 hours a week to move beyond the poverty line, the report found. However, other countries, such as Australia and Ireland, provide minimum wages that are high enough to allow workers to hold a minimum-wage part-time job and still climb out of poverty.
"Time is running out to prevent the scars of the crisis becoming permanent, with millions of workers trapped at the bottom of the economic ladder," OECD Secretary-General Angel Gurría said in a statement. "If that happens, the long-run legacy of the crisis would be to ratchet inequality up yet another notch from levels that were already far too high."
Part-time work is on the rise in a number of European countries, most notably in the Netherlands, where 51.7 percent of the working population is in a part-time job. More than one in three workers have part-time jobs in Switzerland, while a quarter of the workforce in Austria, Belgium, Denmark, Germany, Norway, Sweden and the U.K. is working in part-time jobs.
Still, such jobs are likely voluntary in countries where part-time work is widespread, especially because women are more likely to hold part-time roles, given some may want to balance work and family life. Other countries such as Greece, Italy and Spain, which have struggled with high unemployment rates, have higher shares of involuntary part-time work. Fewer than one out of five workers in the U.S. hold part-time jobs, the study said.
Most OECD countries review and revise their minimum wage each year, the study noted. "Not revising the minimum wage regularly can result in a significant erosion of its (real) value," the report said. "This occurred in the United States, for example, where the federal minimum was unchanged between September 1997 and July 2007, while average wages rose by 80 percent."
Labor advocates are pushing for another increase to the federal minimum wage, which has remained at $7.25 an hour since 2009. According to Business for a Fair Minimum Wage, a coalition of businesses that support a higher baseline wage, the current minimum wage has one-third less buying power than it had in 1968, adjusted for inflation.
Some states have responded by boosting their minimum wages, and cities such as San Francisco and Seattle have set higher baseline hourly pay.
Some critics counter that a higher minimum wage will lead to job cuts and a slowdown in hiring, as businesses adjust their staff to account for the higher wages. But the OECD noted that recent research shows that there may be no hit to employment after a minimum wage hike. Employers might adjust by cutting other costs, such as paring back training or nonwage benefits, the study noted.
Inequality, which is increasingly a concern among U.S. economists and policymakers, is indeed on the rise in America, the study found. However, earnings mobility and inequality is most significantly hurting male workers in the short and long term, while inequality for women has remained stable or increased only slightly.
"The decline in employment mobility for men is likely to reflect the secular decline in job allocation and unemployment turnover during the period of the Great Moderation from 1983 to 2007," the report said. Women, on the other hand, have been joining the labor market in greater numbers, which is boosting their employment mobility.
Helping workers gain new skills and find stable jobs can help improve earnings mobility, the report noted.
It added, "Chronic unemployment, weak cognitive skills, atypical work arrangements and poor productivity firms are major determinants of low long-term earnings."