Global wages post first real decline in 21st century

THE International Labor Organization (ILO) said global wages fell in real terms in the first half of the year, the first such decline in the 21st century.

In its Global Wage Report 2022/23, the ILO said monthly pay declined 0.9% year on year in the first half.

During the pandemic in 2020 and 2021, global real wages rose 1.5% and 1.8% respectively.

The ILO said many low-paid workers lost their jobs at the height of the pandemic, which skewed the wage data into reflecting the pay of higher-paid earners.

“The coronavirus crisis, the current cost of living crisis, and the war in Ukraine are all creating enormous uncertainty,” Manuela Tomei, assistant-director-general for governance, rights and dialogue at the ILO, said in a livestreamed briefing late Wednesday.

“Countries should continue to strive for a more equal world without extreme poverty and we need more social justice.”

She noted that lower-income households are hit harder by inflation since they spend more on essential goods, whose price tend to grow more rapidly.

Advanced economies from the Group of 20 (G20) showed a decline in real wages of -2.2%, while real wages in emerging G20 economies grew 0.8%.

In Asia and the Pacific, real wage growth slowed in the first half of 2022 to 1.3% from 3.5% a year earlier.

Real wage growth in North America slid to -3.2% from 0% last year, while Latin America and the Caribbean saw growth decline to -1.7% from -1.4% in 2021.

The labor organization noted that inflation continues to reduce the purchasing power of minimum-wage workers.

Bienvenido S. Oplas, Jr., founder of free market think-tank Minimal Government Thinkers, said the Philippine government should attract more investment and try to grow existing domestic businesses.

“Wage levels will naturally increase if businesses are expanding and they know that workers can leave anytime if they are not properly compensated,” he said in a Viber message.

In a separate report published on Monday, the ILO said the Philippines has the potential to boost jobs in the manufacturing sector during the recovery from the pandemic.

However, it said competing for foreign direct investment will be difficult against countries with lower costs and more advanced infrastructure.

The Asia-Pacific region still lacks 22 million jobs this year, “a jobs gap of 1.1% compared to if the pandemic had not occurred,” the ILO said.

The manufacturing sector recorded the highest monthly increase in jobs in September, adding 780,000 to 4.45 million workers.

The Philippine jobless rate dropped to 5% in September, the lowest since the start of the pandemic.

However, job quality worsened that month as the underemployed, defined as those looking for more work, increased to a six-month high of 15.4%.

Last month, Labor Secretary Bienvenido E. Laguesma said the National Wages and Productivity Commission and regional tripartite wage boards were monitoring inflation as labor groups call for higher pay.

“Governments around the world should craft adequate policy responses to alleviate the difficulties of those most in need,” Ms. Tomei said.

“Country-specific data on labor productivity growth could be used in negotiations regarding possible wage adjustments in certain countries,” she added. — John Victor D. Ordoñez