Wage gap with lower growth rate since 2008 – The Economic Journal

Wage gap with lower growth rate since 2008 - The Economic Journal


The new study released by the International Labor Organization (ILO) reveals that, regardless of the area of ​​the globe where one looks, it is found that women (still) have lower wages than men. In the report on wages 2018/2019, released on Monday, the ILO concludes that on average the wage gap is 20%.

The report's data show that overall wage growth in 2017 was not only lower than in 2016 but also fell to the lowest growth rate since 2008, remaining well below pre-global financial crisis levels.

The report analyzed the pay gap in 136 countries and concluded that real wage growth (ie adjusted for price inflation) decreased from 2.4% in 2016 to 1.8% in 2017.

But the outlook for workers is more daunting when calculations exclude China, where a population and a steady rise in wages strongly influence the data. Not counting the data from this western country, wages rose only 1.1% last year, compared with 1.8% in 2016.

The report also presents consistent trends when it highlights substantial differences between developed and developing countries.

In what the ILO calls "emerging and developing economies of the G20," wages have nearly tripled over the past 20 years, including a 4.3 percent increase last year. But in the developed nations of the G-20, wages have risen by 9 percent in the last two decades and declined in 2017, a mere 0.04 percent increase.

In Western and Southern Europe, wage growth fell from 1.6% in 2015 to 1.3% in 2016 and 0% last year. This deceleration occurs in a context of falling unemployment and increasing productivity. Between 1999 and 2017 the productivity of the 52 richest countries increased 17% while real wages advanced 13%.

These numbers, against the backdrop of rising economic growth and falling unemployment in high-income countries, are "intriguing," commented ILO Director-General Guy Ryder.

Wage disparity factors

Ryder also called persistent wage differentials between men and women "one of the greatest manifestations of social injustice in the world," saying that "all countries should try to better understand what lies behind them and accelerate progress towards gender equality ".

The ILO has also examined the importance of factors traditionally used to explain wage discrepancies between men and women, including different levels of education.

Men's salary benefits are not due to issues related to their training and qualifications. In fact, according to the study of the organization led by Guy Ryder, the qualifications do not contribute much to the fixing of the salaries, being that in countries of higher income contribute with less than 1% to this situation. The gap is, therefore, largely due to subjective reasons.

"In many countries, women are more highly educated than men, but they earn lower wages even when they work in the same professional categories," said ILO salary specialist and co-author Rosalia Vazquez-Alvarez.

"Never before has the awareness and commitment to gender equality at work as well as in society been so prominent in national and international public debates," the report writes.

This report is the sixth edition of the income analysis at the global level and follows the action plan of the United Nations Sustainable Development Goals (ODS), which sets the goal of "achieving full and productive employability and work dignity for all women and men, including for young people and people with disabilities and equal pay for work of equal value "by 2030.



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