03.12.2020
Average wages are falling in most countries
As a result of the COVID pandemic in the first six months of this year, average wages are falling or rising more slowly in most countries around the world, according to a new report by the International Labor Organization (ILO), quoted by the CITUB press center.
This trend is observed in two thirds of the countries for which the organization has official data, and the forecast is that the crisis will put enormous downward pressure on wages in the near future.
For this one-third of the countries with growth for the first half of the year, it is actually largely due to distortions of values due to the large number of low-paid workers who have lost their jobs and thus do not fall into the employment data, added the ILO. .
In countries where decisive measures have been taken to preserve employment, the effects of the crisis are felt mainly as a decline in wages rather than a huge job loss, is another conclusion in the 2020/21 Global Wage Report.
In addition, not all workers have been equally affected by the crisis. The impact on women is greater than on men. The crisis has also hit lower-paid workers hard. Those in lower-skilled occupations have reduced working hours, in contrast to higher-paid managerial and skilled jobs. Based on data from 28 European countries, the report shows that without temporary subsidies, the lowest paid 50 percent of workers would lose about 17.3 percent of their income. Without subsidies, the average amount of lost wages for all groups would be 6.5 percent.
"Rising inequalities caused by the COVID-19 crisis threaten to create a legacy of poverty, social and economic instability that would be devastating," said ILO Director-General Guy Ryder. According to him, the recovery strategy should be focused on the person. "If we're going to build a better future, we also have to deal with some awkward questions about why high-value jobs, such as carers and teachers, are often associated with low pay," said Guy Ryder.
The report includes an analysis of minimum wage systems and concludes that they could play an important role in sustainable and equitable recovery.
At present, minimum wages have been introduced in some form in 90 percent of ILO member states. But even before the pandemic began, the report found that 266 million people worldwide - 15 percent of all wages in the world - earned less than the hourly minimum wage, either due to non-compliance or legal exclusion from such schemes.
The groups most often excluded from the legal coverage of minimum wage systems are agricultural and domestic workers. The report shows that by 2020, approximately 18 percent of countries with a statutory minimum wage exclude either agricultural workers, domestic workers or both sectors from the minimum wage regulations.
Collective bargaining, which takes into account the specifics of specific companies or sectors, can strike the right balance and reassess wage adequacy in some predominantly female-dominated low-paid sectors that have proved essential and of high social value in the current crisis, according to the ILO.
Planning new and adequate minimum wages - mandatory or negotiated - could help ensure more social justice and less inequality. The analyzes in the report show that when minimum wages are set at an adequate level, they legally cover those employees who are most likely to be in low-paid jobs and thus contribute to reducing inequality.
The 2020/21 Global Wage Report also looks at wage trends in 136 countries in the four years leading up to the pandemic. He found that global wage growth ranged from 1.6 percent to 2.2 percent. They are growing fastest in Asia and the Pacific and Eastern Europe and much slower in North America and Northern, Southern and Western Europe.
