India recorded highest average real wage growth in South Asia during 2008-17: ILO report

India recorded the highest average real wage growth in South Asia during 2008-17, according to a report by the International Labour Organisation (ILO).

Reflecting more rapid economic growth than in other regions, workers in Asia and the Pacific have enjoyed the highest real wage growth among all regions over the period 2006-17, with countries such as China, India, Thailand and Viet Nam leading the way, the Global Wage Report 2018/19 said.

In South Asia, India led the average real wage growth in 2008-17 at 5.5 against a regional median of 3.7. Following India was Nepal (4.7), Sri Lanka (4), Bangladesh (3.4), Pakistan (1.8) and Iran (0.4).

The report said that all emerging G20 countries except Mexico experienced significant positive growth in average real wages between 2008 and 2017.

“Wage growth continues in Saudi Arabia, India and Indonesia, whereas in Turkey it declined to around 1 per cent in 2017,” it said adding that South Africa and Brazil have experienced positive wage growth starting from 2016 after a phase of mostly zero growth during the period 2012 16, with negative growth in Brazil during 2015 16.

Russia suffered a significant drop in wage growth in 2015, again owing to the decline in oil prices, but has since then bounced back with moderate though positive wage growth.

It also noted that a number of countries have recently undertaken measures to strengthen their minimum wage with a view to providing more adequate labour protection.

South Africa announced the introduction of a national minimum wage in 2018, while lawmakers in India are examining the possibility of extending the legal coverage of the current minimum wage from workers in scheduled’ occupations to all wage employees in the country, it said.

The report added that wages grew higher and faster in less well-off countries last year than in richer nations, but salaries are still far too low in the developing world. Pay rose by just 0.4 per cent during last year in advanced economies, but grew at over four per cent in developing countries.

“We are seeing some degree I don’t want to exaggerate it – of convergence,” said ILO Director-General Guy Ryder, noting that “wages in developing countries are increasing more quickly than those in higher-income countries.”

“That sounds like good news, because we all want to see convergence around the world But let’s not exaggerate, because the gaps are still very, very big. Very often the level of wages is still not high enough for people to meet their basic needs,” he added.

Overall, global wage growth declined to 1.8 per cent in 2017 from 2.4 per cent in 2016. The findings are based on data from 136 countries. In the last 20 years, average real wages have almost tripled in emerging and developing G20 countries, the ILO report also found, while in advanced G20 countries, they have increased by just nine per cent.

Faced with such low salary growth in richer economies in 2017 with pay growing at its lowest level in a decade – the ILO chief noted with concern that this has happened despite a recovery in global output.

For the first time, the ILO report also focuses on the global gender pay gap, using data from 70 countries and some 80 per cent of employees worldwide. Its findings indicate that despite some significant regional differences, men continue to be paid around 20 per cent more than women; “perhaps the biggest single injustice in the world of work”, Ryder said.

In high-income countries the gender pay gap is at its biggest in top-salaried positions. In low and middle-income countries, however, the gap is widest among lower-paid workers, the ILO report found.

Its data also suggests that traditional explanations for this – such as differences in the levels of education between men and women who work – play only a “limited” role in explaining gender pay gaps.  “In many countries women are more highly educated than men but earn lower wages, even when they work in the same occupational categories,” said ILO expert Rosalia Vazquez-Alvarez.

“The wages of both men and women also tend to be lower in enterprises and occupations with a predominantly female workforce.” To reduce gender pay gaps, she recommended that more emphasis should be placed on ensuring equal pay for women and men, and on addressing the lower value placed on women’s work.