Half of OECD Countries Earn Less Now Than Pre-Pandemic

According to a recent report, around half of OECD countries are earning less now than they had before the pandemic. Considering hourly real wages—wages adjusted for inflation—people in the United States, Canada, Japan, Australia and many European countries now have less money at their disposal than roughly four years ago. No data was published for Turkey, Chile and Colombia.

While the pandemic caused issues for some industries, others also started paying workers more as they wound up being in short supply due to the upheavals to employment Covid-19 caused. After the invasion of Ukraine by Russia in early 2022, most workers around the world took a hit to their real wages as inflation was running hot in many countries, causing price increases to effectively outweigh any potential wage growth.

Finland, Italy, the Czech Republic, Sweden and New Zealand were hardest hit by this phenomenon according to the OECD Employment Outlook 2024, seeing real wages decrease by more than 5%. Sweden saw wages dwindle most, by 7.5%. The country is known for relatively low real wages compared to its pricy standard of living—pay is 11% lower than in neighboring Denmark and 16-20% lower than in Germany, the Netherlands or Norway. Trade unions negotiate a majority contracts in the country that has placed a focus on equality, but like in many European nations, collective bargaining has become more contentious. In this context, observers have even referred to a "lost decade" for Swedish wages.

The United States fared better than others as real wages were just 0.8% lower in Q1 of 2024 than in Q4 of 2019. Neighbor Canada lost 2.4% of hourly real wages in roughly the same time period, while the loss was even more severe in Australia at 4.8%. The University of Sydney comments that a departure from collective bargaining and a decrease in manufacturing have affected the jobs that used to be peak performers for wage growth in the country.