The latest OECD Employment Outlook has just been released and, in addition to all of the data the OECD typically collects and reports on unemployment rates, GDP growth and government budgets/policy reforms, this year’s Outlook also has a specific focus on “how population and workforce ageing will affect the labour market and workers’ jobs.”
Its headline finding is that:
“Without swift changes in policies and behaviours, GDP per capita growth will slow down significantly in most OECD countries. Integrating under-represented groups in the labour market will help offset ageing, in particular older workers and, in many countries, women who are currently not working or working few hours.”
The report includes a number of ‘Country Reports’ including one on Australia. It includes the following details:
- Australia continues to have high employment rates and unemployment levels below the OECD average.
- The Australian labour market has grown less than those of other OECD countries in recent years and remains ‘tight’ in three key sectors: accommodation and food services, arts and entertainment, and real estate.
- GDP growth in Australia is expected to be 1.8% this year and 2.2% next year with inflation steady at around 2.3% and unemployment expected to increase slightly but still remain below the OECD average.
- Real wages in Australia are below 2021 levels and “well below the rate recorded for other OECD economies.”
The report then goes on to examine the challenges of an ageing population and while it notes that it is a “wonderful achievement” that “people around the world are living longer and healthier lives than ever before”, in combination with declining fertility rates it means that there are more “old-age people” in the population than ever before.
The OECD projects that by 2060 the proportion of old-age people per working person will have risen by two-thirds. In Australia the increase is projected to be of a similar level.
That means that by 2060 for every two working-age Australians there will be one “old-age dependent” unless policy reforms are introduced.
The kinds of reforms the OECD suggests are:
- keeping healthy older workers employed for longer
- supporting greater gender equality to encourage more women to work, and
- promoting regular migration.
These reforms are expected to offset “the negative impact of ageing” on GDP growth – but the OECD also warns that further productivity growth will be needed to “effectively limit the drag on growth brought by the demographic transition.”
It is against this backdrop that the Australian government is convening its Economic Reform (Productivity) Roundtable as it seeks ideas to deliver its five pillar productivity agenda:
- “Creating a more dynamic and resilient economy.
- Investing in the net zero transformation.
- Building a skilled and adaptable workforce.
- Harnessing data and digital technology.
- Delivering quality care more efficiently.”
VET will have a key role to play in upskilling and reskilling Australia’s healthy older workers, in educating women and men for a wider range of occupations, and in training workers employed in the care sector, those involved in the shift to net zero, and in the increased use of digital technologies across all industries.
