TIL Desk/Business/Geneva-Global wage growth has slowed significantly, a worrying development that could fuel further inequality and suppress consumption worldwide, a United Nations report said. A dramatic slowdown in the developing world is the key driver of the trend, the UN’s International Labour Organisation said in the report.
The report, published by the ILO every two years since 2008, looks at worker compensation in all regions and aims to offer a broad view of where the world is headed in terms of household income and consumer purchasing power. Overall, “wage growth around the world has decelerated since 2012 from 2.5 per cent to 1.7 per cent in 2015, the lowest level in four years,” ILO said in a statement.
Deborah Greenfield, ILO deputy director for policy, called those figures “a matter of major concern.” Following the 2008 financial crisis, global wage growth was sustained by a strong performance in developing nations, notably places like Brazil, India and South Africa. That apparent “catching up” by poorer nations raised hopes of more global equality, said Greenfield.
But that progress “has slowed down, perhaps even halted,” Greenfield told reporters in Geneva, noting the exception of China where wages were still growing significantly faster than elsewhere. Problems in developing nations have partly been driven by the collapse in oil and commodity prices, the report’s lead author Patrick Belser said.
