UN Report: Real Wages Stall in Economic Crisis
New York, Nov 3 2009 12:10PM
Real wages appear to be stagnating worldwide for the second consecutive year, underlining the fragility of any potential recovery from the global economic crisis, the United Nations International Labour Organization (http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang--en/WCMS_116503/index.htm) reported today.
The ILO’s annual (http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_116500.pdf)
study of global wages shows that growth in real wages –
measured across 53 countries – declined from an average of
4.3 per cent in 2007 to 1.4 per cent last year. In some of
the biggest economies sampled, real wages actually fell by
0.2 per cent last year.
This year, according to the
ILO, “the picture on wages is likely to get worse,” with
figures from the first quarter of 2009 indicating that real
wages in nearly 20 countries are now falling outright, often
because of cuts to the number of hours worked.
Manuela
Tomei, the director of ILO’s Conditions of Work and
Employment programme and the lead author of the study, said
the findings raise “serious questions about the true
extent of an economic recovery, especially if government
rescue packages are phased out too early.
“Wage
deflation deprives national economies of much needed demand
and seriously affects confidence,” she added.
In
June ILO members responded to the global economic crisis by
adopting a ‘global jobs pact’ that calls for measures to
maintain employment and to avoid deflationary wage spirals
and worsening working conditions.
Today’s study
notes that in the past few years both rich and poor
countries have boosted their minimum wage levels by more
than the rate of inflation because of concerns about
increasing inequality.
Describing these changes as
“an important policy tool for social protection,” the
report proposes that tax reductions and other income-support
measures also be introduced to further protect low-paid
workers.
“Minimum wages, social dialogue and
collective bargaining are all ways of avoiding deflationary
wage spirals and their impact on society,” Ms. Tomei
said.
In addition, the report warned that the economic
crisis has worsened the problem of wage arrears in some
countries, including Ukraine and Russia.
On Thursday
the ILO’s governing body gathers in Geneva to discuss the
study and how to implement the global jobs
pact.
ENDS