Wage inequality has decreased in two-thirds of countries globally since 2000, according to a recent report by the International Labour Organization (ILO). The report highlights that global wage inequality has declined at an annual rate of 0.5% to 1.7%, with low-income countries showing the most significant reductions—ranging from 3.2% to 9.6% per year. However, high-income nations have seen slower progress, with annual declines ranging from 0.3% to 0.7%.
Despite these positive trends, challenges remain. Inequality within countries remains high, particularly in low-income nations, where 22% of workers are categorized as low-paid. The report also underscores the disparity between the earnings of the top 10% and the bottom 10% of earners. The highest-earning 10% take home nearly 38% of global wages, while the lowest-earning 10% receive only 0.5%. Furthermore, women and workers in the informal economy are disproportionately affected, earning less and facing job insecurity.
Regional disparities in wage growth are also evident. While real wages in emerging economies grew by 6.0% in 2023, advanced economies saw only a 0.5% decline. Workers in Asia, the Pacific, Central and Western Asia, and Eastern Europe have experienced faster wage growth than other regions.
To tackle these persistent inequalities, the ILO recommends strengthening wage-setting mechanisms through collective bargaining and minimum wage systems, addressing gender pay gaps, and formalizing the informal economy to enhance income security. Governments are urged to prioritize policies that promote productivity, decent work, and inclusive economic growth to narrow wage gaps and improve living standards globally.
The ILO’s report highlights the importance of comprehensive policies to ensure that wage growth benefits all workers and reduces income inequality.
NEWS DESK
PRESS UPDATE