Rising inflation brings down real wages: ILO
PHOTO: FILE
A severe inflationary crisis combined with the global slowdown in economic growth, driven in part by the war in Ukraine and the global energy crisis, is causing a striking fall in the real monthly wages in many countries, including in the Asia-Pacific region, according to a report of the International Labour Organisation (ILO).
The Global Wage Report 2022-2023, released on Wednesday, said the crisis is reducing the purchasing power of the middle class and hitting the low-income households particularly hard.
The impact of inflation and Covid-19 on wages and the purchasing power shows that the global monthly wages fell in real terms to minus 0.9% in the first half of 2022. It is for the first time this century that the real global wage growth has been negative, the report stated.
“Multiple global crises we are facing have led to a decline in real wages. It has placed tens of millions of workers in a dire situation as they face increasing uncertainties,” ILO Director-General Gilbert Houngbo said in a statement in Geneva, the headquarters of the UN agency, warning of the potential consequences.
“Income inequality and poverty will rise if the purchasing power of the lowest paid is not maintained,” he said. “In addition, a much-needed post-pandemic recovery could be put at risk.”
Published in The Express Tribune, December 2nd, 2022.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.