Global salaries and wages across the world fell to its lowest since 2008, far below the levels before the global financial crisis, according to a new International Labour Organisation (ILO) report.
The Global Wage Report 2018/19 released on Monday, November 26, 2018, finds that in real terms (adjusted for price inflation) global wage growth declined to 1.8% in 2017 from 2.4% in 2016. The ILO findings are based on data from 136 countries.
In analysing wage growth, the report finds that in advanced G20 countries real wage growth declined from 0.9 per cent in 2016 to 0.4 per cent in 2017. By contrast, in emerging and developing G20 countries, real wage growth fluctuated between 4.9 per cent in 2016 and 4.3 per cent in 2017.
Guy Ryder, ILO Director-General, said, “It’s puzzling that in high-income economies we see slow wage growth alongside a recovery in GDP growth and falling unemployment. And early indications suggest that slow wage growth continues in 2018.”
“Such stagnating wages are an obstacle to economic growth and rising living standards. Countries should explore, with their social partners, ways to achieve socially and economically sustainable wage growth."
In the last 20 years, average real wages have almost tripled in emerging and developing G20 countries, while in advanced G20 countries they have increased by just 9%, the report shows. But, in many low- and middle-income economies, wage inequality remains high and wages are frequently insufficient to cover the needs of workers and their families.
Growing concern over gender pay gaps
According to the report, women are paid approximately 20% less than men. The report calculates gender pay gaps in innovative and more accurate ways, using data covering some 70 countries and about 80% of wage employees worldwide.
“The gender pay gap represents one of today’s greatest manifestations of social injustice, and all countries should try to better understand what lies behind them and accelerate progress towards gender equality,” said Guy Ryder.
The report finds that in high-income countries it is at the high end of the pay scale that the gender pay gap is wider, while in low- and middle-income countries the gender pay gap is wider amongst the lower paid workers.
Using empirical evidence, the report also shows that traditional explanations, such as differences in the levels of education between men and women who work in paid employment, play 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,” said Rosalia Vazquez-Alvarez, econometrician and wage specialist at the ILO and one of the authors of the report.
“The wages of both men and women also tend to be lower in enterprises and occupations with a predominantly female workforce. To reduce gender pay gaps more emphasis, therefore, needs to be placed on ensuring equal pay for women and men, and on addressing the undervaluation of women’s work,” she said.
Minimum wage in Nigeria
The ILO report is coming at a time Nigerian government and the workers' union are fine-tuning the country's minimum wage.
Workers in Nigeria still earn N18,000 ($50) monthly as the government looks at an increase to N30,000 ($83) per month. Despite the proposed increase, Africa's largest economy still pays its workers.
If the Nigerian government successfully approved the N30,000 ($83) minimum wage, Africa's largest economy will still be ranked low among big economies in the continent concerning national pay for its workers.