Jobs markets are continuing to recover from the 2008 crisis and employment is set to return to pre-crisis levels next year, but wage growth remains weak, according to the latest OECD report.

OECD secretary general Angel Gurría said: “The job of healing the employment market is only half done: back at work, but out of pocket. Comprehensive and ambitious policy action is needed to kick start labour productivity growth, raise wages, and reduce rising job market inequalities.”

She was introducing the OECD Employment Outlook 2016 before next week’s meeting of G20 labour and employment ministers in Beijing.

Gurría added: “Comprehensive and ambitious policy action is needed to kick start labour productivity growth, raise wages, and reduce rising job market inequalities.”

Ireland, however, along with Greece and Spain, is lagging behind in terms of jobs recovery. The proportion of people aged 15 to 74 in work in OECD countries will be 61% by the end of next year, slightly above the level recorded at the end of 2007.

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The jobs gap compared to the end of 2007 remains large in some European countries, notably Greece, Ireland and Spain (at 9, 7.9 and 8.5 percentage points, respectively), but in some OECD countries, notably Chile, Germany, and Turkey, employment rates already exceed pre-crisis levels.

Wage growth remains subdued. Productivity has stagnated over the past years and many of the workers who lost their jobs in manufacturing and construction during the crisis have got jobs in the services sector that often do not match their skills and are lower paid.

Real wages fell sharply during the crisis in Greece, Ireland, Japan, Portugal, Spain, and the Baltic States. Comparing real wage growth during 2000-2007 with 2008-2015, a number of other countries, including the Czech Republic, Estonia, Latvia, and the United Kingdom, experienced sharp deceleration. By 2015, real hourly wages in these countries were over 25% below where they would have been if wage growth had continued at the same rate. This wage gap exceeded 20% in Greece, Hungary, and Ireland.

Job quality, and in particular the situation of certain groups, is also a source of concern. In the OECD the rate of young people neither in employment nor in education ─ so-called NEETs ─ was still higher in 2015 (15%) than in 2007 (13.5%), with significant increases in several countries. Gender gaps in the labour market also persist, and female workers continue to have worse jobs than men.

The OECD says that an adequate skills policy can help reduce inequalities in the labour market and boost productivity and wages. Its report says it is equally important to improve the recognition and use of skills at work as among equally educated and skilled workers, those who use their skills at work are more productive and earn higher wages.

The report also concludes that as most countries are on a recovery path, however weak, the time is ripe for structural reforms, as potential short-term labour market costs from such reforms can be minimised, if not eliminated, by implementing them during economic upswings.