Job market divide threatens social cohesion - OECD

Berlin - Social cohesion is under threat as medium-skilled jobs disappear in favour of better paid jobs requiring high qualifications and low-paid, unskilled work, the Organisation for Economic Co-operation and Development warned on Tuesday.

"Income inequality is unprecedented at the moment and is endangering social cohesion," OECD secretary-general Angel Gurria told journalists at a Berlin press conference.

Some 7.6% of medium-skilled jobs disappeared between 1995 and 2015 in the OECD's 35 mostly wealthy member nations.

Meanwhile, highly-skilled jobs grew by 5.3% and the number of unskilled jobs expanded by 2.3%.

"Low and middle incomes are stagnating, while the demand for mid-level qualifications is shrinking," the report noted.

The OECD points the finger at technological change for most of the ruction in rich countries' labour markets in recent decades.

A smaller share is blamed on off-shoring production to countries with cheaper labour.

A gap between high and low earnings has matched the gulf between high- and low-skilled work.

Those among the richest 10% of the population have more than nine times as much disposable income as the poorest 10%.

That ratio has grown from around seven times 25 years ago.

The OECD pointed to "rising inequality and concerns that top earners are getting a disproportionate share of the gains from economic growth".

Growing rejection of globalisation, expressed in swelling populist movements in some countries, can largely be traced to "a real failure of existing policies to promote inclusive growth" that would benefit a broader swathe of the population, the organisation said.

Beyond focusing on jobs and unemployment figures, policymakers should have an eye on pay and job security and greater "inclusiveness" in terms of male-female balance and helping the disadvantaged into work, the report found.

Labour markets should also be flexible and designed to support people as they adapt to economic hard times or technological change, it added.