MENA Newswire News Desk: Wage inequality has declined in approximately two-thirds of countries since the turn of the century, according to a newly released report by the International Labour Organisation (ILO). The Global Wage Report 2024-25: Is Wage Inequality Decreasing Globally? highlights that wage disparity between high and low earners has been narrowing globally, with low-income nations showing the most significant progress.
From 2000 onwards, average annual reductions in wage inequality ranged from 0.5% to 1.7% globally, depending on the metrics applied. Low-income countries saw the sharpest declines, with wage inequality dropping at rates between 3.2% and 9.6% annually over the past two decades. In contrast, wealthier nations experienced slower progress, with wage disparity shrinking annually by 0.3% to 1.3% in upper-middle-income countries and 0.3% to 0.7% in high-income economies.
Despite these advancements, wage inequality remains entrenched. The highest earners, particularly those at the upper end of the pay scale, saw greater improvements in wage equality compared to workers in lower income brackets. The report emphasizes that globally, the lowest-paid 10% of workers still account for just 0.5% of the global wage bill, while the top 10% earn nearly 38%.
In terms of overall wage growth, recent trends reflect a recovery from past stagnation. Real wages grew by 1.8% globally in 2023, with projections suggesting an acceleration to 2.7% in 2024—marking the highest growth rate in more than 15 years. These figures contrast sharply with 2022, a year marked by a -0.9% decline in real wages due to high inflation outpacing nominal wage growth.
However, regional disparities persist. Emerging economies experienced stronger wage growth compared to advanced economies. For instance, in 2023, real wages in emerging G20 economies rose by 6.0%, following a 1.8% increase in 2022. In contrast, advanced G20 economies recorded consecutive years of declining real wages, with a -2.8% drop in 2022 and a -0.5% decline in 2023.
ILO Director-General Gilbert F. Houngbo welcomed the return to positive real wage growth but emphasized that challenges remain. “However, we must not forget that millions of workers and their families continue to suffer from the cost-of-living crisis that has eroded their living standards and that wage disparities between and within countries remain unacceptably high,” he said.