UN Warns of Social Unrest After ‘Striking’ Drop in Global Wages

Date: 30 November 2022 - 21:41

News ID: ۱۰۹۶۱۱

LONODN (Al-Jazeera) - Global wages fell in 2022 for the first time since the global financial crisis due to soaring living costs, threatening to worsen inequality and drive social unrest, the United Nations labor agency has warned.
Monthly wages dropped 0.9 percent in real terms in the first half of 2022 – the first negative wage growth since 2008, the International Labor Organization (ILO) said in its latest global wage report released on Wednesday.
Lower-income groups have been hit especially hard after suffering significant wage losses during the COVID-19 pandemic, according to the ILO’s Global Wage Report 2022–23.
Despite rises to keep up with inflation, the minimum wage fell in real terms from 2020-2022 in Bulgaria, Spain, Sri Lanka, South Korea, the United Kingdom and the United States, the ILO said.
Meanwhile, overall wages were lower in real terms in 2022 than in 2008 in Italy, Japan, Mexico and the UK.
The slump in wages comes despite rising productivity, with 2022 showing the biggest gap between real labor productivity growth and real wage growth in high-income countries since 1999, according to the report.
ILO Director-General Gilbert F Houngbo said the deterioration in real wages would likely continue without targeted policy responses by governments.
“This would increase the probability of a deeper recession, a risk that is already worsening due to the restrictive monetary policies adopted by central banks in their efforts to bring down inflation,” Houngbo said.
Global inflation is expected to hit 8.8 percent by the end of 2022, according to the International Monetary Fund, before declining to 6.5 per cent in 2023 and 4.1 per cent in 2024.
By region, Eastern Europe and North America saw the sharpest declines in purchasing power, with real wages falling 3.3 percent and 3.2 percent, respectively, in the first half of 2022.
The European Union saw real wages fall 2.4 percent, while Latin America and the Caribbean recorded a 1.7 percent decline. Africa saw real wages shrink by 0.5 percent.