Global Wage Report 2024-25: ILO

Syllabus: GS3/Economy

Context

• The International Labour Organization (ILO) has released the Global Wage Report 2024-25.

About

• The Global Wage Report is an annual publication released by the ILO. The first edition was published in 2008.
• It provides a detailed look at wage trends around the world and in different regions, highlighting changes in wage inequality and real wage growth. 

Major Highlights of the Report

• Decrease in Wage Inequality: The wage inequality has decreased at an average rate of 11.1% per annum in about two-thirds of all countries around the world since 2000.
• Increase in Global Wages: Global wages have grown faster than inflation in recent times.
  • The global real wages grew by 1.8% last year, while the projections have reached 2.7% growth in 2024, the highest increase in over 15 years.
• Regional Disparity in Growth: Africa, Northern America and parts of Europe recorded stagnant or negative real wage growth.
• Persistent inequality: Low-income countries suffer from significantly higher wage inequality compared to high-income nations, with nearly 22% of workers earning less than half the median hourly wage.
• Decoupling between productivity and wages: Despite a 29% rise in productivity in high-income countries between 1999 and 2024, real wages have only risen by 15%, highlighting a failure to share productivity gains equitably with workers.
• A continual gender wage gap: Women, especially in lower-middle-income countries, remain disproportionately affected by wage inequality due to overrepresentation in informal, precarious and low-paid work.
• Indian Scenario: 
  • The shares of low-paid wage workers and low-paid non-wage workers in India declined at an average annual rate of 6.3% and 12.7% between 2008 and 2018.
  • The share of low-paid wage workers — those earning less than 50% of the median hourly wage in the country — stands at 9.5% in India. 
  • On the other hand, it is 9.4% for Pakistan, 10.5% for Nepal, 11.2% for Bangladesh, 13.7% for Bhutan and 25.9% for Sri Lanka.
• Analysis:
  • Despite the positive trend, significant wage differentials persist worldwide.
  • Such positive outcomes mark a notable recovery compared to the negative global wage growth, of -0.9%, observed in 2022.
  • The emerging economies have experienced stronger growth than the advanced ones.
• Suggestions
  • Minimum wage adjustments need to be more responsive to inflation, especially to protect low-wage earners.
  • Stronger worker protections, policies and regulations to address precarious and insecure forms of work.
  • Action to close the gender wage gap and ensure equal pay for work of equal value.

Source: BS