Salaries are still far too low in the developing world with take-home pay growth overall at its lowest since 2008, the International Labour Organisation (ILO) has said.
The UN labour agency in its Global Wage Report 2018/19 released on Monday, also said that pay rose by just 0.4 per cent during last year in advanced economies.
The report, however, said wages grew higher and faster in developing countries in 2017 than in richer nations, at over four per cent.
ILO Director-General, Guy Ryder, however, noted that wages in developing countries increasing more quickly than those in higher-income countries, should not be exaggerated.
Mr Ryder said: “That sounds like good news, because we all want to see convergence around the world. But let’s not exaggerate, because the gaps are still very, very big.
“Very often the level of wages is still not high enough for people to meet their basic needs”, he added.
Overall, global wage growth declined to 1.8 per cent in 2017 from 2.4 per cent in 2016, according to the findings, which were based on data from 136 countries.
In the last 20 years, average real wages had almost tripled in emerging and developing G20 countries, the ILO report also found.
On the other hand, in advanced G20 countries, they have increased by just nine per cent.
Faced with such low salary growth in richer economies in 2017 – with pay growing at its lowest level in a decade – the ILO chief noted with concern that “this has happened despite a recovery in global output”.
“It’s puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment.
“Wages are still growing much less slowly than productivity. I think that has implications for demand; if you haven’t got money in your pocket, you can’t spend money,” he said.
The ILO chief noted that ‘if you can’t spend money, enterprises suffer’ and investment opportunities become rarer.
Global gender pay gap
For the first time, the ILO report also focused on the global gender pay gap, using data from 70 countries and some 80 per cent of employees worldwide.
Its findings indicated that despite some significant regional differences, men continue to be paid around 20 per cent more than women.
This, the ILO chief called “perhaps the biggest single injustice in the world of work”.
“This goes diametrically against this basic principle of equal pay for work of equal value,” Mr Ryder added.
He noted that it had featured “in the constitution of the ILO for the last 100 years”, and also figures among the goals the international community has agreed to achieve by 2030, as part of the UN Sustainable Development Goals agenda.
In high-income countries, the gender pay gap is at its biggest in top-salaried positions, according to the report.
In low and middle-income countries, however, the gap is widest among lower-paid workers, the ILO report found.
Its data also suggested that traditional explanations for this – such as differences in the levels of education between men and women who work – play only a “limited” role in explaining gender pay gaps.
“In many countries women are more highly educated than men but earn lower wages, even when they work in the same occupational categories.
“The wages of both men and women also tend to be lower in enterprises and occupations with a predominantly female workforce,” said ILO expert, Rosalia Vazquez-Alvarez.
To reduce gender pay gaps, she recommended that more emphasis should be placed on ensuring equal pay for women and men, and on addressing the lower value placed on women’s work.
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