Global Wage Report 2024-25: ILO

Global Wage Report 2024-25: ILO

The International Labour Organization (ILO) has released its Global Wage Report 2024-25, offering an in-depth analysis of global wage trends, wage inequality, and real wage growth across different regions and countries.

Key Highlights of the Global Wage Report 2024-25:

1. Decrease in Wage Inequality:

   • Wage inequality has decreased globally at an average rate of 11.1% per annum since 2000 in about two-thirds of all countries.

   • This reduction is attributed to various social and economic policies implemented globally, although disparities remain.

2. Increase in Global Wages:

   • Global wages have been growing faster than inflation in recent times, signaling positive trends in wage growth.

   • Real wages grew by 1.8% in the past year, and projections for 2024 indicate a 2.7% increase, marking the highest growth in over 15 years.

3. Regional Disparities:

   • Africa, Northern America, and parts of Europe saw stagnant or even negative real wage growth.

   • Emerging economies showed stronger wage growth compared to advanced economies.

4. Persistent Inequality:

   • Low-income countries face significantly higher levels of wage inequality compared to high-income nations.

   • About 22% of workers in low-income countries earn less than half the median hourly wage.

5. Decoupling Between Productivity and Wages:

   • Despite a 29% rise in productivity in high-income countries between 1999 and 2024, real wages have only increased by 15%.

   • This highlights the failure to equitably share the productivity gains with workers, especially in wealthier nations.

6. Gender Wage Gap:

   • Women, particularly in lower-middle-income countries, continue to suffer from wage inequality due to overrepresentation in informal, precarious, and low-paid work.

Indian Scenario:

• Declining Low-Paid Workers:

  • Between 2008 and 2018, both 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%, respectively.

  • Low-paid wage workers in India, those earning less than 50% of the median hourly wage, now stand at 9.5%, showing positive progress.

• Comparative Wage Data in South Asia:

  • In India, the percentage of low-paid workers (9.5%) is comparable to:

    • Pakistan: 9.4%

    • Nepal: 10.5%

    • Bangladesh: 11.2%

    • Bhutan: 13.7%

    • Sri Lanka: 25.9%

• Recovery After Setback:

  • The global wage growth in 2024 marks a recovery after a negative global wage growth rate of -0.9% in 2022.

Suggestions for Policy Improvement:

1. Minimum Wage Adjustments:

   • Minimum wage policies need to be more responsive to inflation, particularly to protect low-wage earners from rising living costs.

2. Stronger Worker Protections:

   • Strengthening worker protections, policies, and regulations to address precarious and insecure forms of work.

3. Closing the Gender Wage Gap:

   • More comprehensive action is needed to close the gender wage gap and ensure equal pay for work of equal value.

About the International Labour Organization (ILO):

• Established: In 1919 as part of the Treaty of Versailles, marking the end of World War I. It became the first specialized UN agency in 1946.

• Membership: 187 Member States.

• Mission: The ILO aims to promote decent work for all women and men, setting labor standards, developing policies, and devising programs for better labor conditions worldwide.

• Tripartite Structure: It is the only tripartite UN agency that brings together governments, employers, and workers to discuss labor issues.

• Headquarters: Located in Geneva, Switzerland.

• Major Reports:

  • World Employment and Social Outlook (WESO)

  • Global Wage Report

  • World Social Protection Report

  • World Employment and Social Outlook for Youth

  • World of Work Report

Conclusion:

The Global Wage Report 2024-25 reveals encouraging growth in wages globally, though substantial wage inequalities remain. The findings emphasize the need for policy adjustments, particularly in areas of minimum wage responsiveness, worker protections, and gender equality. As India continues to show improvements in wage equality, targeted reforms will help further reduce disparities and enhance the living standards of its workers.