The severe inflationary crisis combined with a global slowdown in economic growth are causing a striking fall in real monthly wages in many countries, reducing the purchasing power of the middle classes and hitting low-income households particularly hard, the International Labour Organization (ILO) said.
In its “Global Wage Report 2022-2023”, the ILO said that global monthly wages fell in real terms to minus 0.9 per cent in the first half of 2022, the first time this century that real global wage growth has been negative, Xinhua news agency reported.
According to the report, real wages in the G20 countries in the first half of 2022 are estimated to have declined to minus 2.2 per cent, whereas real wages in emerging G20 countries grew by 0.8 per cent, 2.6 pe rcent less than in 2019, the year before the Covid-19 pandemic.
“The multiple global crises we are facing have led to a decline in real wages. This has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” ILO Director-General Gilbert F. Houngbo said.
“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,” he commented.
The report, which includes regional and country data, shows that in Northern America (Canada and the US), average real wage growth slid to zero in 2021 and dropped to minus 3.2 per cent in the first half of 2022.
In the European Union, where job retention schemes and wage subsidies largely protected employment and wage levels during the pandemic, real wage growth increased to 1.3 per cent in 2021 and declined to minus 2.4 per cent in the first half of 2022.
In Eastern Europe, real wage growth slowed down to 4.0 per cent in 2020 and 3.3 percent in 2021, and fell to minus 3.3 per cent in the first half of 2022.