Wages are recovering from a negative shift in 2022, the United Nations labor agency said
“If this trend is confirmed, this would be the largest increase in more than 15 years… However, this The positive trend is not shared equally across regions,” speak ILO General Manager Gilbert Houngbo.
Speaking in Geneva at the launch of the ILO Global Wages Report, Mr. Houngbo noted that today’s global wage growth reflects a notable recovery from the 0.9% decline in 2022, when High inflation – and higher prices – outpace wage growth.
However, the trend toward larger pay packages has been less noticeable in highly industrialized economies, where wages “rose modestly” by 0.9% last year, the ILO chief said. This contrasts with bumper wage growth of nearly 6% in emerging economies in 2023 after a 1.8% increase in 2022 – a positive trend that will continue in 2024.
Despite this welcome development, prices remain prohibitive for low-income households, who continue to struggle with rising costs of living. “Although inflation has decreased, it is still a harsh reality in many emerging and developing countries”, noted the head of the United Nations labor agency.
Regional trends
From a regional perspective, average wages grew faster in Asia and the Pacific, Central and West Asia and Eastern Europe than in the rest of the world.
In 2022, Africa, Asia and Pacific, Central and West Asia were the only regions to see average wages increase in 2022, while average real wages decreased in all regions. other area. The ILO said the decline ranged from minus 0.8% in Eastern Europe to minus 3.7% in Northern, Southern and Western Europe.
In 2023, wage growth is positive in most regions, except Africa, North America and Northern, Southern and Western Europe.
In 2024 – except for African and Arab countries, where average real wages remained stable – wages increased in all regions in 2024from 17.9% in Central and West Asia to 0.3% in North America.
The productivity conundrum
Amid these achievements, the ILO points out that productivity grew “faster” than wages in high-income countries over the period 1999–2024 (29% increase in output compared to a 15% change in wage packages ). This difference originated mainly from 1999 to 2006, then during the financial crisis of 2008 to 2009 and then due to COVID-19 crisis.
According to ILO data collected from about 150 countries, wage inequality – the difference between the lowest and highest paid workers – yes decreased in two-thirds of countries since the early 2000s, at an average annual rate of 0.5 to 1.7%.
“The most significant reductions occurred in low-income countries, where average annual declines ranged from 3.2 to 9.6% over the past two decades,” the UN agency explains.
In contrast, wage inequality remains persistent in richer countries, falling annually by 0.3 to 1.3 percent in upper-middle-income countries and 0.3 to 0.7 percent in high-income countries. “The decline was more significant among salaried workers at the top of the pay scale,” the ILO said.
