Crisis-hit developed countries see wages fall: ILO



AGENCE FRANCE PRESSE

Published — Friday 7 December 2012

Last update 8 December 2012 12:50 am

| نسخة PDF Print News | A A

GENEVA: A sluggish global economy hit world wage growth hard last year, taking an especially harsh toll on workers in developed countries, who saw their salaries shrink, the International Labour Organization said yesterday.
"The global crisis has had significant negative repercussions for labor markets in many parts of the world," said ILO director general Guy Ryder.
In its Global Wage Report, the UN's labor agency said that monthly average wages adjusted for inflation grew globally by just 1.2 percent last year, down from 2.1 percent in 2010 and 3.0 percent in 2007.
It added that if China — a country where wages roughly tripled over the past decade — was omitted from the equation, global wages grew by just 0.2 percent last year from 1.3 percent in 2010 and 2.3 percent in 2007.
Developed countries, many of them suffering from the euro zone debt crisis, had been especially hard-hit with average salaries slipping by 0.5 percent in 2011 compared with the year before, the report said.
Ryder pointed out to reporters in Geneva that in developed economies, the crisis led to a "double dip" in wages, with average salaries falling into the red first in 2008 and again last year.
"And the trend seems to be for zero growth in 2012," he said.
Other regions of the world fared far better, with Asia seeing wages jump 5.0 percent, as salaries grew 5.2 percent in Eastern Europe and Central Asia and 2.2 percent in Latin America and the Caribbean, the report showed.
In a longer perspective, the ILO report pointed out that since 2000, average global wages had grown by nearly a quarter, although the regional differences again were striking.
Salaries in Asia had for instance almost doubled over the 11-year-period, while developed countries saw a mere 5.0 percent increase in wages.
But although wages were falling in developed countries as they grew in developing nations the wage gap between them remained overwhelming, Ryder said.
While a worker in the manufacturing sector in the Philippines on average took home $ 1.40 an hour last year, a US worker earned $ 23.30 and in Denmark the hourly pay was $ 34.80, he said.
In its analysis of wage developments, the ILO underscored that salary increases in recent years have not kept pace with labor productivity and that workers have seen their share of national incomes shrink as a result.
"There is a break in the linkage between wages and labor productivity," Ryder lamented, pointing out that this basically means that "workers and their families are not receiving the fair share they deserve."
This is true both in countries where wages have long been stagnant, and perhaps more surprisingly in countries where wages have grown significantly, like China, he said.
In developed countries, labor productivity — or the amount of goods and services produced compared to the number of hours worked — has increased roughly twice as fast as wages since 1999, the report showed.
And since the 1970s, workers in these countries have seen their share of the countries' national income slip from 75 percent to around 65 percent.
In Germany, for instance, labor productivity surged by nearly 25 percent in the past two decades, while salaries remained flat, the report showed.
This trend is not only bad for employees, it is also bad for national economies, it cautioned.
"A decrease in the labor share not only affects perceptions of what is fair... It also hurts household consumption," the report pointed out.
In this time of crisis, it also cautioned against over-zealous austerity and the "simplistic view that countries can cut their way out of the recession" in terms of wages.
Instead, Ryder insisted, countries should invest in setting minimum wages at a level that allows workers to "live in reasonable dignity."

What's happening around Saudi Arabia

RIYADH: The Saudi Commission for Tourism and National Heritage (SCTNH) has encouraged businessmen to invest in tourism villages in Asir region.“Tourism villages are considered to be one of the most attractive options in the province,” said Mohammad A...
RIYADH: The General Presidency for Youth Welfare (GPYW) has taken part in serving pilgrims and visitors to the Two Holy Mosques as part of the organization’s voluntary and humanitarian work. In his statement, the head of the Riyadh office, Abdulrahma...
RIYADH: Prince Faisal bin Bandar, governor of Riyadh, opened on Wednesday 20 environmentally friendly entertainment projects with a total area of more than 270,000 sq. meters. Among interesting features of these new parks are replicas of the Eiffel T...
JEDDAH: Children and youths afflicted with cancer in the Eastern Province have launched a campaign against terrorist attacks. The patients, their families and doctors have slammed the attacks, which saw many killed and injured, a local publication re...
JEDDAH: Failing to report what one knows about the presence or plans of terrorists and extremists is a “grave sin” and makes the person who fails to do so an accomplice to the resulting actions, according to Abdullah bin Suleiman Al-Manae, a member o...
RIYADH: The World Assembly of Muslim Youth (WAMY) is a major player when it comes to relief work in countries wrecked by human tragedies, Secretary-General Saleh Al-Wohaibi said on Tuesday.He was addressing some 700 guests at the 13th annual iftar pa...
JEDDAH: The General Committee for the Municipal Elections has issued new regulations to oversee the polls, which will be taking place on Dec. 12, 2015.The rules released on Monday spelled out requirements for council members, list of violations and a...
JEDDAH: The Martyrs Fund has announced that it disburses 75 percent of its annual revenues to helping the needy families of martyrs, the wounded, prisoners of war and missing persons.Approximately 25 percent of the revenues is allocated for further i...
MADINAH: Custodian of the Two Holy Mosques King Salman arrived in Madinah on Tuesday accompanied by several princes and senior officials for his first visit since ascending the throne. He was met at the airport by Madinah Gov. Prince Faisal bin Salma...
JEDDAH: The Council of Ministers has condemned the terrorist attacks in Kuwait, France, Tunisia and Egypt over the past few days.At its weekly meeting chaired by Custodian of the Two Holy Mosques King Salman on Monday night, the Cabinet said that the...
JEDDAH: The father of the suicide bomber who blew himself up in a mosque in Kuwait has blamed “evil” forces for his son’s behavior.Sounding confused and sad, Sulaiman Al-Gabbaa, the father of Fahad Al-Gabbaa, said: “An evil hand has sent my son to hi...
JEDDAH: The Saudi Traffic Department has denied that it is introducing new license plates for cars.It said hackers posted pictures of the supposedly new license plates on its Twitter account on Sunday. The department said the news, which went viral,...
JEDDAH: The Al-Haramain Train project is described as the largest public transportation project in the Middle East. This vital and strategic project is one of the implementation schemes of the mass expansion of the Saudi railway across the country.Th...
JEDDAH: The number of marriages between expatriates and Saudis has dropped 84 percent to 1,928 since the start of this Islamic year that began on Oct. 24, compared to the same period the previous year.The Ministry of Justice said that there were 12,0...
JEDDAH: The General Authority for Civil Aviation (GACA) launched the idea of a project called Watani to link all parts of the Kingdom by air by beefing up activities at important provincial airports.Capt. Abdul Hakim Badar, assistant vice president a...

Stay Connected

Facebook