Global wage growth down by half on economic crisis: ILO

09:55, December 16, 2010      

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The global wage growth was cut by half during the financial and economic crisis in 2008 and 2009, said the International Labor Office (ILO) in a report issued Wednesday.

The report, covering data from 115 countries and territories with 94 percent of the 1.4 billion wage earners worldwide, shows that global wage growth decreased from 2.8 percent in 2007, to 1.5 percent in 2008 and 1.6 percent in 2008, nearly cut by half.

"The recession has not only been dramatic for the millions who lost their jobs, but also affected those who remained in employment by severely reducing their purchasing power and their general well-being," said the ILO Director-General Juan Somavia in a message marking the debut of the report.

According to the ILO, the proportion of low pay people, earning less than two-thirds of media wage, has increased in more than two- thirds of countries since the mid-1990s.

The ILO believes long-term wage stagnation and decline in the share of wages in total income was "an important trigger of crisis ", as it contributed to the imbalance and disconnect between growing productivity and deficient aggregate demand.

"Macroeconomic policy makers must turn their attention to employment and to wage determination to strength the tepid recovery and address longer term social and economic imbalances," said Somavia, adding that consumption on increased and balanced wages is key to the recovery.

Source: Xinhua


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