Wage growth around the world slowed in 2013 to 2.0%, compared to 2.2% in 2012, and has yet to catch up to the pre-crisis rates of about 3.0%, according to the ILO’s Global Wage Report 2014/15 *.
Even this modest growth in global wages was driven almost entirely by emerging G20 economies, where wages increased by 6.7% in 2012 and 5.9% in 2013.
By contrast, average wage growth in developed economies had fluctuated around 1% per year since 2006 and then slowed further in 2012 and 2013 to only 0.1% and 0.2% respectively.
“Wage growth has slowed to almost zero for the developed economies as a group in the last two years, with actual declines in wages in some,” said Sandra Polaski, the ILO’s Deputy Director-General for Policy. “This has weighed on overall economic performance, leading to sluggish household demand in most of these economies and the increasing risk of deflation in the Eurozone,” she added.
Kristen Sobeck, economist at the ILO and one of the authors of the report observed that, “the last decade shows a slow convergence of average wages in emerging and developing countries towards those of developed economies, but wages in developed economies remain on average about three times higher than in the group of emerging and developing economies.”
|Comparing how wages have changed in different regions of the world|
Among developing economies, the report notes vast differences between regions.
For example, in 2013, wages grew by 6.0% in Asia and 5.8% in Eastern Europe and Central Asia but only 0.8% in Latin America and the Caribbean.
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