A stronger increase in Germany and the United States does not compensate for lower wages in emerging economies, says the International Labor Organization (ILO) in its global report.
The catch-up of wages following the financial crisis of 2008 is running out of steam. After a recovery in 2010, the real growth of wages is down, according to the report of the International Labor Organization published Thursday. After rising 2.5% in 2012, they grew only 1.7% in 2015, the lowest level in four years. “Excluding figures from China, where wage growth has been faster than anywhere else, the real wage growth rate fell from 1.6% in 2012 to 0.9% in 2015,” he said. emphasizes the ILO.
The Geneva-based organization sees all a reversal of the trend. If in the first phase of recovery after the shock wave of Lehman Brothers, emerging economies were pulling up wages, today the wage dynamics has reversed in favor of developed economies. In emerging countries, the evolution of real wages went from 6.6% in 2012 to 2.5% in 2015.
The decline in Latin America, dynamic Asia
In OECD countries, it rose from 0.2% in 2010 to 1.7% in 2015, the highest level in the last ten years. This dynamism is mainly based on the economic health of the US (up 2.5% in 2015) and Germany (+ 2.8%) against 1.1% in France and 1.9% in the European Union. “It is not yet certain that this encouraging development will continue for a long time as developed countries face growing economic, social and political uncertainties,” said Deborah Greenfield, Deputy Director General of the ILO for Policy.
Note that significant disparities remain in emerging economies. While Asia is doing well thanks to China, India or the Philippines, Latin America is down by 1.3% in 2015, weighed down by Brazil’s severe recession, the biggest economy in the sub-region. continent. In Eastern Europe (-5.2%), the Russian crisis, a consequence of the sharp decline in oil prices of the last two years, and that of Ukraine weigh on the level of remuneration. The fall in real wages is spectacular in Russia (-9.5%) and catastrophic in Ukraine (-20%).
Beyond the numbers, the ILO warns of the economic and social consequences of stagnating wages: the decoupling of economic growth from wage growth risks fueling the frustration of workers and families. Not to mention the impact on their purchasing power and their consumption, “so on overall demand, especially if wages stagnate at the same time in several major economies.”
Worsening wage inequality
The ILO is also alerting about widening wage inequalities at the top of the scale. “Salaries are gradually increasing in the bulk of the distribution and then make a sudden jump for 10% of the top of the salary scale and even more for the 1% of the best paid,” insist the international experts. In Europe, the 10% of the highest paid employees to absorb on average a quarter of the payroll, almost as much as the 50% the least well paid. The gap is even more significant in emerging countries, particularly in Brazil, India and South Africa.
Women, always less well paid than men
Despite catching up in recent years, women still remain largely underpaid compared to men, especially at the highest levels of the hierarchy. In Europe, the gap is on average 20%, it climbs to 45% for the 1% of the best paid, up to 50% between women and men CEOs.
Among other measures to limit wage inequality, the ILO highlights the role of minimum wages and collective bargaining – preferring agreements at the national or branch level rather than at the level of companies to limit competition by the cost of labor – and also advocates the regulation of excessive remuneration.