Economic crisis erodes global real wages growth, says ILO
Economic crisis erodes global real wages growth, says ILO
08:35, November 04, 2009 
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Global growth in real wages slowed dramatically in 2008 as a result of the economic crisis and is expected to drop even further this year despite signs of a possible economic recovery, the International Labor Organization (ILO) said on Tuesday.
According to a new report released by the UN agency, 2008 was a difficult year for wages. In a sample of 53 countries for which data are available, growth in real average wages in the median country had declined from 4.3 percent in 2007 to 1.4 percent in 2008.
While a majority of the 53 countries could maintain declining but positive wage growth in 2008, more than a quarter of them experienced flat or falling monthly wages in real terms. These countries include the United States, Germany, Switzerland, Israel, Japan, Singapore, the Republic of Korea, Mexico, etc.
According to the Global Wage Report, the picture on wages is likely to get worse in 2009 regardless of other economic indicators suggesting an economic rebound.
The report noted that in half of the 35 countries for which figures were available, real monthly wages fell in the first quarter of 2009 compared to their average of 2008, often due to cuts in hours worked.
"The continued deterioration of real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early," said Manuela Tomei, director of ILO's Conditions of Work and Employment Program and lead author of the report.
"Wage deflation deprives national economies of much needed demand and seriously affects confidence," Tomei said.
According to the new report, one particular concern about the impact of the crisis on wages is the extent to which wage-arrears have increased. In countries such as Ukraine and Russia where this was already a problem, it is likely that the situation may have gotten worse as a result of the crisis.
Source:Xinhua
According to a new report released by the UN agency, 2008 was a difficult year for wages. In a sample of 53 countries for which data are available, growth in real average wages in the median country had declined from 4.3 percent in 2007 to 1.4 percent in 2008.
While a majority of the 53 countries could maintain declining but positive wage growth in 2008, more than a quarter of them experienced flat or falling monthly wages in real terms. These countries include the United States, Germany, Switzerland, Israel, Japan, Singapore, the Republic of Korea, Mexico, etc.
According to the Global Wage Report, the picture on wages is likely to get worse in 2009 regardless of other economic indicators suggesting an economic rebound.
The report noted that in half of the 35 countries for which figures were available, real monthly wages fell in the first quarter of 2009 compared to their average of 2008, often due to cuts in hours worked.
"The continued deterioration of real wages worldwide raises serious questions about the true extent of an economic recovery, especially if government rescue packages are phased out too early," said Manuela Tomei, director of ILO's Conditions of Work and Employment Program and lead author of the report.
"Wage deflation deprives national economies of much needed demand and seriously affects confidence," Tomei said.
According to the new report, one particular concern about the impact of the crisis on wages is the extent to which wage-arrears have increased. In countries such as Ukraine and Russia where this was already a problem, it is likely that the situation may have gotten worse as a result of the crisis.
Source:Xinhua
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