Global Wage Report 2012/2013: wages and equitable growth

This Report, that was funded by the International Labour Organization (ILO), examines regional differences and trends in the years proceeding and following the Global Financial Crisis and provides a fresh overview that aims to assist International Decision-Makers.

                                                                     Construction Workers image

Major Trends in Wages


THE CRISIS CONTINUES TO DAMPEN WAGES

Real average wage growth has remained far below pre-crisis levels globally, going into the red in developed economies, although it has remained significant in emerging economies. Monthly average wages adjusted for inflation - known as real average wages - grew globally by 1.2% in 2011, down from 2.1% in 2010 and 3% in 2007. China, because of it size and strong economic performance, weighs heavily in this global calculation. Omitting China, global real average wages grew at only 0.2% in 2011, down from 1.3% in 2010 and 2.3% in 2007.

REGIONAL DIFFERENCES IN WAGE GROWTH

There are major geographic variations in the trends in real average wage growth. Wages suffered a double dip in developed economies but remained positive throughout the crisis in Latin America and the Caribbean, and even more so in Asia. Fluctuations were widest in Eastern Europe and Central Asia, partly as a result of the strong post-transition recovery in wages before the global economic crisis, and the severe contraction in real wages in 2009. In the Middles East, real average wages appear to have declined since 2008, but some of the estimates still remain tentative, as they are for Africa.

CUMULATIVE WAGE GROWTH BY REGION

Differences between the regions are particularly stark if we look at the cumulative wage growth from 2000 to 2011. Globally, real monthly average wages grew by just under a quarter, in Asia they almost doubled, while in the developed world they increased by about 5%. In Eastern Europe and Central Asia wages nearly tripled, but this was mostly as part of the recovery from the transition to marked economies. In Russia, for example, the real value of wages collapsed to less than 40% of their value in the 1990s and it took another decade before wages recovered to their initial level.

REGIONAL DIFFERENCES IN WAGE LEVELS

While wages grew significantly in emerging economies, differences in wage level remain considerable. In the Philippines, a worker in the manufacturing sector took home around US$1.40 for each hour worked. In Brzil, the hourly direct pay in the sector was US$5.40, in Greece it was US$13.00, in the United States US$23.30 and in Denmark US$34.80.

Related UN Resources:

ILO’s Global Wage Report 2012/2013

The International Labour Organization (ILO) has released a new report entitled “Global Wage Report 2012/2013: Wages and Equitable Growth” looks at differences in wages around the globe and how they have been influenced by the economic crisis. It includes global and regional wage trends and statistics, as well as policy recommendations.

                             Wokers Picture

The Global Wage Report contributes to a wider literature on the changes in the distribution and levels of wages within and across countries, as well as on the economic and social implications of these trends. One of the key findings of this literature is the growing inequality in salaries, in terms of functional and personal salary distribution.

In terms of functional salary distribution, which concerns how national salary has been distributed between labour and capital, there is a long run trend towards a falling share of wages and a rising share of profits in many countries. The personal distribution of wages  has also become more unequal, with a growing gap between the top. 10% and the bottom 10% of wage earners. These internal “imbalances” have tended to create or exacerbate external imbalances, even before the Great Recession, with countries trying to compensate the adverse effects of lower wage shares on consumption demands through easily accessible credit surpluses.

RELATED UN RESOURCES:

Lebanon: Labour Force Survey among Palestinian Refugees Living in Camps and Gatherings in Lebanon, 2011

This Labour Force Survey, conducted by the International Labour Organization (ILO) and European Union, tells how Palestinian refugees living in Lebanon continue to find jobs despite legal and administrative hurdles, but face exploitative working conditions.

                              Palestinian Working Refugee

Palestinians are paid 20 per cent less than Lebanese workers for performing the same work. Their average monthly income is below the Lebanese minimum wage of 675,000 LBP (US$ 450).

As most of Palestinians are poorly educated and lacking skills, they eke out a living as casual workers in low-paid jobs in commerce and construction.

Few of these workers have a proper employment contract and next to none have access to health coverage, paid and sick leave. Very few are entitled to a pension or end-of-service indemnity.

The situation is particularly difficult for Palestinian working women. They tend to be better educated than their male counterparts, but are still underrepresented in the workforce and receive lower salaries.

Up to 280,000 Palestinian refugees live in 12 camps and 42 gatherings across Lebanon.

Legal amendments had no impact.

Related UN Resources:

United Nations Refugee Agency (UNHCR) HomePage

UNHCR and ILO Workshop on “Refugees and labour mobility” 2012

Policy Development and Evaluation of UNHCR - durable solutions for refugees

World of Work Report 2012.

World of Work

According to the International Labour Organization (ILO), the just released  flagship report titled World of Work Report: Better jobs for Better Economy provides a comprehensive analysis of recent labour market and social trends, assesses risks of social unrest and presents employment projections for the next five years.

The report addresses the following questions:

• To what extent has the slow recovery aggravated social conditions, including falling incomes, deepening poverty and worsening inequality?
• Have countries gone too far, too fast with fiscal consolidation? How should they support recovery while meeting fiscal goals in the medium term?
• What can be expected from recent labour market reforms?
• How can investment be boosted so as to ensure a long-lasting recovery in both the economy and jobs?
• What have been the barriers to implementing a more job-centred and equity-enhancing policy approach? Why has the business-as-usual scenario maintained its centrality despite the increasing risk of social unrest?

The full report is available in English pdf format.

Previous reports

Global Wage Report 2010/11: Wage policies in times of crisis

The second in a series of ILO reports focusing on wage developments, this volume reviews the global and regional wage trends during the years of the economic and financial crisis of 2008 and 2009. The report is available in 6 languages. Please download at the ILO website.