Global Wage Report

Global wages remain far below pre-crisis levels, says a new United Nations report, which points to a continuing slowdown in developed countries alongside increases in emerging economies.

The Global Wage Report 2012/13, released on December 7^th by the International Labour Organization (ILO), shows that global monthly wages grew by 1.2 per cent in 2011, down from three per cent in 2007 and 2.1 per cent in 2010. It also cites huge differences between countries and regions.

“This report clearly shows that in many countries, the crisis has had a strong impact on wages – and by extension, workers,” said ILO’s Director-General, Guy Ryder. “But the impact was not uniform.”

While wage growth suffered a double-dip in developed economies – where it is forecast at zero per cent in 2012 – it remained positive throughout the crisis in Latin America and the Caribbean, as well as Africa, and even more so in Asia.

“This report clearly shows that in many countries, the crisis has had a strong impact on wages – and by extension, workers.”

The biggest changes were seen in Eastern Europe and Central Asia, which went from double-digit pre-crisis rates to a “hard landing” in 2009, the ILO stated in a news release. In the Middle East, wages appear to have dropped since 2008, although the data is still incomplete.

The differences between the regions are particularly stark when examining wage growth from 2000 to 2011. Globally, wages grew by just under a quarter. In Asia, they almost doubled. In Eastern Europe and Central Asia, they nearly tripled, although following significant declines in the 1990s. And in the developed world, they increased by just about five per cent.

The report also cites considerable differences in wage levels across countries. A worker in the manufacturing sector in the Philippines took home $1.40 for every hour worked, compared to less than $5.50 in Brazil, $13 in Greece, $23.30 in the United States and almost $35 in Denmark.

Also included in the report are recent findings that show wages have grown at a slower pace than labour productivity – the value of goods and services produced per person employed – over the past decades in a majority of countries for which data is available.

“Where it exists, this trend is undesirable and needs to be reversed,” said Mr. Ryder. “On a social and political level, its clearest interpretation is that workers and their families are not receiving the fair share they deserve.”

In developed economies, labour productivity has increased more than twice as much as wages since 1999. In the US, hourly labour productivity in the non-farm business sector increased by about 85 per cent while earnings only increased by about 35 per cent since about 1980. In Germany, labour productivity surged by almost a quarter over the past two decades while wages remained flat.