Presents data on trends in wages around the world and compares them with trends in global labour productivity in order to analyze their complex political, social, and economic effects on the global economy.
“This Global Wage Report presented data on trends in wages around the world and compared them with trends in labour productivity, analysing their complex effects on the global economy with a view to shedding some light on the current debates over distribution, competitiveness and labour costs. When wages rise in line with productivity increases, they are both sustainable and create a stimulus for further economic growth by increasing households’ purchasing power. However, for a decade or more before the crisis, the link between wages and labour productivity was broken in many countries, and this contributed to the creation of global economic imbalances. The report showed that since the 1980s, a majority of countries have experienced a downward trend in the ‘labour income share,’ which meant that a lower share of national income has gone into labour compensation and a higher share into capital incomes. This has happened most frequently where wages have stagnated but also in some countries where real wages have grown strongly....Many countries in the world are trying to address these challenges, often by implementing innovative policies. [The authors hope that] this Global Wage Report will help them and will stimulate fresh thinking on issues which today stand at the centre of international decision-making” (p. v-vi). (Abstractor: Author)

Major Findings & Recommendations

• “The crisis continues to dampen wages. Real average wage growth has remained far below pre-crisis levels globally, going into the red in developed economies, although it has remained significant in emerging economies” (p. xiii). • “There are major geographic variations in the trends in real average wage growth…Wages suffered a double dip in developed economies but remained positive throughout the crisis in Latin America and the Caribbean, and even more so in Asia” (p.xiii). • “While wages grew significantly in emerging economies, differences in wage levels remain considerable. In the Philippines, a worker in the manufacturing sector took home around US$1.40 for each hour worked. In Brazil, the hourly direct pay in the sector was US$5.40, in Greece it was US$13.00, in the United States US$23.30 and in Denmark US$34.80 (2010 exchange rates, rounded)” (p.xiii-xiv). • “Between 1999 and 2011, average labour productivity in developed economies increased more than twice as much as average wages…The global trend has resulted in a change in the distribution of national incomes, with the workers’ share decreasing while capital income shares increase in a majority of countries” (p.xiv). • “One of the key findings of this [report] is the growing inequality in income, in terms of functional and personal income distribution…The personal distribution of wages has also become more unequal, with a growing gap between the top 10 per cent and the bottom 10 per cent of wage earners" (p.xiv-xv). • “[This report’s] analysis suggests that policy actions towards ‘rebalancing’ should be taken at both national and global levels. In attempting to redress external imbalances, policy-makers should refrain from a simplistic view that countries can ‘cut’ their way out of the recession. Policy-makers should pursue policies that promote a close connection between the growth of labour productivity and the growth of workers compensation” (p.xv). • “Raising average labour productivity remains a key challenge which must involve efforts to raise the level of education and the capabilities that are required for productive transformation and economic development. The development of well-designed social protection systems would allow workers and their families to reduce the amounts of precautionary savings, to invest in the education of their children, and to continue towards stronger domestic consumption demand and raise living standards” (p.xvi). (Abstractor: Author)