According to a recent report, around half of OECD countries now earn less than they did before the pandemic. Looking at real hourly wages – that is, wages adjusted for inflation – people in the US, Canada, Japan, Australia and many European countries have less money to spend today than they did about four years ago. No data was published for Turkey, Chile and Colombia.

While the pandemic caused problems for some industries, others also began paying their workers more as they became scarce due to the labor market upheaval caused by Covid-19. Following Russia’s invasion of Ukraine in early 2022, most workers around the world saw their real wages decline as inflation was high in many countries, leading to price increases that outpaced virtually any potential wage growth.

Finland, Italy, the Czech Republic, Sweden and New Zealand were most affected by this phenomenon, according to the OECD Employment Outlook 2024, where real wages fell by more than 5%. Wages fell the most in Sweden, by 7.5%. The country is known for its relatively low real wages compared to its expensive standard of living – wages are 11% lower than in neighbouring Denmark and 16-20% lower than in Germany, the Netherlands or Norway. Trade unions negotiate most collective agreements in the country, which has placed an emphasis on equality, but as in many European countries, collective bargaining has become more contentious. In this context, observers even spoke of a “lost decade” for Swedish wages.

The United States fared better than others, with real wages in the first quarter of 2024 only 0.8% lower than the fourth quarter of 2019. Neighbouring Canada lost 2.4% in real hourly wages over roughly the same period, while Australia’s loss was even more severe at 4.8%. The University of Sydney notes that a move away from collective bargaining and a decline in manufacturing have hurt jobs, which were once the frontrunners for wage growth in the country.