Global Wage Report

  • IASbaba
  • December 8, 2022
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Context: The International Labour Organization (ILO) recently released the Global Wage Report 2022-2023. This ILO flagship report examines the evolution of real wages, giving a unique picture of wage trends globally and by region.

Key findings of the report:

  • The real and nominal wages of employees were considered: The word “wage”, was defined as the total gross remuneration including regular bonuses received by employees during a specified period for time (monthly for the report) worked as well as for time not worked.
  • Nominal wage data: The adjusted figures after accounting for consumer price inflation while real wage growth refers to the year-on-year change in real average monthly wages of all employees.
  • Global wages: They were reduced in 2022 for the first time since 2008. It also added that monthly wages have declined by 0.9 per cent in real terms in the first half of 2022. This is the first negative growth of real global wages in the 21st century.
    • The United States, the United Kingdom, Spain, South Korea, Bulgaria and Spain are some of the countries that witnessed a fall in the minimum wages. While Italy, Japan, Mexico and the UK facing a decrease in overall wages in real terms compared to 2008.
  • Cost of living: It has the greatest impact on lower-income earners and their households as they have to spend most of their disposable income on essential goods and services, which generally experience greater price increases than non-essential items.
  • Inequality: At the Asia-Pacific level, only the jobs in high-skill occupations saw a recovery from the COVID-19 crisis, which is true across all subregions. It is raising concerns about increased inequality.
  • Employment: While there is an employment gain of 1.6% among high-skill workers between 2019 and 2021, there is no such substantial gain among low-to-medium-skill workers.
    • Among the G-20 countries, a significant gap, in the average level of real wages between advanced G-20 countries and emerging G-20 countries such as India, is seen.
  • Poverty: 75 to 95 million people were pushed into extreme poverty during COVID-19.
  • India: In India, the nominal wages rose to ?17,017 per month in 2021 from ?4,398 in 2006.
    • But when inflation is factored in, the real wage growth in India plunged to -0.2% in 2021 from 9.3% in 2006.
    • The negative growth in India started after the pandemic.
  • Other Asian Countries: In China, the growth decreased from 5.6% in 2019 to 2% in 2022. In Pakistan, the growth is -3.8%.

Pandemic Impacts


  • COVID-19 intensified informality, led to the withdrawal of workers from the labour market, reduced earnings, increased unemployment and widened inequality
  • They struggled to find shelter, food, and even drinking water for their families.
  • Inflation was the major reason for decrease in income and the greatest impact was on low-income groups.
  • Rising inflation had a greater cost-of-living impact on lower-income earners, the ILO said adding that they had to spend most of their disposable income on essential goods and services, which generally experience greater price increases than non-essential items.
  • Inflation is also biting into the purchasing power of minimum wages.
  • Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained. In addition, a much-needed post-pandemic recovery could be put at risk. This could fuel further social unrest across the world and undermine the goal of achieving prosperity and peace for all.
  • Although the recent health crisis and the war in Ukraine seem to be the key drivers of uncertainty at present, the fact is that over the past two decades the world has arguably been drifting in a direction that endangers the prospect of achieving prosperity and peace for all, as called for by the United Nations 2030 Agenda for Sustainable Development.

World Bank on Global Growth:

  • Global growth is expected to decelerate markedly from 4.1 per cent in 2022 and 3.2 per cent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.

Major causes for slowdown:

  • Lengthy lockdown months,
  • Excess expenditure on health infrastructure
  • Loss of human resources.
  • Decreasing purchasing power of people around the world.


  • The current slowdown in demand and escalating inflation in the world market are a few repercussions that the world is facing due to the advent of the pandemic.
  • Lesser earnings further proceed to the lesser demand in the market and eventually create an economic condition of recession where the purchasing power of people does not allow them to consume the current supply rate.

Way Forward:

Labour market policies: There is a need to strengthen labour market institutions and wage policies.

  • The creation of decent formal wage employment is a prerequisite for a more equitable distribution of wages and income, and is a key contributor to equitable and sustainable wage growth.

Gender pay gap:

  • Governments should focus on the gender pay gap as when women leave the labour market, they are less likely to return than men.

Multipronged approach:

  • There is an urgent need to address the negative effects of climate change; increasing inequalities; the poverty, discrimination, violence and exclusion endured by millions of people, including the discrimination that women and girls continue to suffer in many parts of the world; the lack of vaccines and access to adequate sanitation and essential healthcare.

Additional Information:

About International Labour Organization:

  • It is a specialised agency of the United Nations.
  • It is the only tripartite U.N. agency since 1919.
  • Aim: To promote rights at work, encourage decent employment opportunities, enhance social protection and strengthen dialogue on work-related issues.
  • India is a founder member of the ILO.
  • Headquarters: Geneva, Switzerland.
  • Received the Nobel Peace Prize in 1969:
    • For improving peace among classes
    • Pursuing decent work and justice for workers
    • Providing technical assistance to other developing nations
  • Flagship Reports of ILO are:
    • Global Wage Report
    • World Employment and Social Outlook
    • World Social Protection Report
    • World of Work Report

Source:  The Hindu


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