A global report is necessary to get comprehensive insights into the ongoing subject-based trends across the world. By reviewing a global report, policy-makers and practitioners can analyse, discuss, and suggest effective solutions to emerging issues that are creating a worldwide impact. Likewise, Global Wage Report 2022-23 is a list of data that measures the current wage trends all around the globe for the year 2022-23. In this article, we will be discussing more on the Global Wage Report, key findings and inferences from such a report and mention where experts think lie the solution for the global minimum wage crisis.
So, without any delay, let’s get started…..
What is a Global Wage Report?
A Global Wage Report is a flagship report published by the International Labour Organisation (ILO) providing important findings on different aspects of wages or current wage trends on a global level. It publishes a report reviewing the wages for a successive two-year period. For an instance, there are global wage reports from 2018-19, 2020-21, and 2022-23. For the year 2018-19, the wage report provided a list of wage trends globally and by region. During the pandemic, the Global Wage Report 2020-21 looked at the current wage trends, the global economy and labour market context and the impact on wages brought about by COVID-19. The first edition of the Global Wage Report was released in 2008-09 and it was on “Minimum wages and collective bargaining: Towards Policy Coherence”. A Global Wage Report is important to have a clear understanding of the current economic scenario in different countries, the emerging problems and how they may be addressed.
Terms to Know:
What is a Minimum Wage?
The minimum wage refers to the lowest or minimum remuneration that an employer must pay to his employees against the work performed for a given term. This minimum wage is regardless of fixing the wage amount and therefore cannot be reduced by collective agreement or an individual contract. The chief aim behind the binding nature of the minimum wages is to safeguard workers against unduly low pay. The International Labour Organisation whose objective is to protect human and labour rights have important research regarding the report on the minimum wage for the period 2022-23, also known as the Global Wage Report.
What are Real Wages?
Real wages do not refer to the remuneration that you receive but are calculated in terms of your purchasing power of different goods and services. If there is inflation (an increase in the prices of goods and a reduction of purchasing power) in society, the real wages will be on the negative side because of the reduction of the buying power of individuals. The Global Wage Report 2022-23 factifed that because of the inflation post-pandemic, there is a decrease in real wages.
Global Wage Report 2022-23
The International Labour organisation flagship published a report in Geneva on 30 November 2022 titled “Global Wage Report 2022-23: The Impact of Inflation and COVID-19 on wages and purchasing power”. It is the eighth edition of the global report on wages.
What are the Key Findings of the Global Wage Report 2022-23?
- Fourteen years after the 2008 global financial crisis, global wages took a downward curve owing to increasing living expenses. This will widen the differences and cause much social unrest.
- The two reasons that are resulting in a decline in real monthly wages in several countries are- severe inflation crisis and global economic slowdown. These situations of crisis are caused partly due to the ongoing war in Ukraine and the worldwide energy crisis.
- In the first half of 2022, there has been a decline in monthly wages by 0.9% in real terms. This is for the first time in the 21st century that the real global wage experienced declining growth.
- COVID-19 resulted in significant loss of wages worldwide but it was particularly severe in low-income countries.
- Efforts were made to keep pace with the 2020-2022 inflation but the minimum wages sunk in real terms during that period. The countries whose minimum wages dipped include Bulgaria, Sri Lanka, the UK, Spain, and the US.
- As compared to the baseline (2008), the overall wages in 2022 were lower in real terms for countries like Italy, Mexico, Japan and the United Kingdom.
- Although the productivity output is greater in high-income countries, there has been a decline in wages. The year 2022 witnessed the greatest gap between growth in real labour productivity and growth in real wage.
- In the first half of 2022, the real wages for advanced G20 countries dropped to minus 2.2%. The real wages of emerging G20 nations grew by 0.8% which is 2.6% lesser than in the year preceding the COVID-19 breakout i.,e 2019.
- On an average level, there is a great rift between the real wages of the developing/emerging G20 countries and the developed/advanced G20 economies.
- For advanced G20 countries, the average wage is 4000 USD/month, and for emerging G20 countries, the average amount is 1,800 USD/month.
- Therefore, we can roughly conclude that the average monthly wage of developed G20 countries is about 2.23 times that of the average wage of emerging G20 countries.
- The report also mentions that wages in India also underwent a decline in comparison to the pre-pandemic conditions.
What are the Important Conclusions/Inferences of the Global Wage Report 2022-23?
- According to ILO Director-General, Gilbert F. Houngbo, the lowering of real wages is because of the multiple global crises that the world has faced in the past and is facing today.
- In 2008, we witnessed a greater global financial crisis since the Great Depression in 1929. The economic crisis was caused because of malpractices in lending, an overwhelming amount of risk-taking by financial institutions, the collapse of mortgage-backed securities etc.
- This was followed by the pandemic situation that not only cost millions of lives but also caused other major upheavals, one of them being financial loss and instability.
- Not to mention, the war in Ukraine and the resultant energy crisis in Europe have contributed to declining real wages in the world.
- Since particularly low-income earners purchase mostly essential goods and services like food with their disposable income, they are particularly susceptible to inflation.
If the current situation of economic slowdown persists, income inequality and poverty will continue to be prevalent. Besides, the expected post-pandemic recovery will fail. When global prosperity is impacted severely, peace will become a far-fetched goal to attain. There will be widespread conflict whose solutions will be hard to fetch. Therefore, to prevent such dire consequences, there is an urgent need for policy measures to bring a balance to the purchasing power and living standards of wage earners and their families. 90% of the ILO Member states already have minimum wage systems in place, all that is required is an adequate adjustment of minimum wages. It becomes the responsibility of every country to protect vulnerable sections through targeted support. Apart from that, strong social dialogue can be used as a tool to resolve such economic crises both today and tomorrow.
Can you suggest other solutions to the current real wage’s scenario in low-income countries? Do you think the global situation will improve if the world doesn’t face any crises in the future? Share with us in the comment section below.
Frequently Asked Questions (FAQs)
Who published the Global Wage Report?
The International Labour Organisation (ILO) published the Global Wage Report for 2022-23 in Geneva on 30 November 2022.
What are the two functions of ILO?
The International Labour Organisation or the ILO encourages social justice, recognises human and labour rights and works towards collective prosperity and peace.
What is the Global Minimum Wage?
The minimum wage refers to the minimum amount that an employer must pay his workers that cannot be reduced by collective agreement or individual contract. Therefore, global minimum wage refers to the minimum wage amount on a global level.
What is India’s Minimum Wage?
The minimum wage for India is INR 178/day (US $2.16) and INR 5,340/month (US $65).
What is the average minimum wage around the world?
The minimum wage around the world is calculated in a country-wise manner. For example, the highest minimum wage for 2022 in Australia is $14.54 and for Luxembourg, it is $13.67.