Bottom 50% wage earners in India get only 17% of total money: ILO

Wage growth across the world has decelerated since 2012, falling from 2.5 per cent to 1.7 per cent in 2015, its lowest level in four years, says a new ILO report.

If China, where wage growth was faster than elsewhere, is not included, growth in global wages dropped from 1.6 per cent to 0.9 per cent, according to the ILO’s Global Wage Report 2016-2017, which is being published every two years since 2008.

On the growing wage inequalities, the report said in India the top 10 per cent wage earners get nearly 43 per cent of the total wages, while the bottom 50 per cent get only 17 per cent of total wages, adding that wage inequality was particularly higher in emerging economies, such as South Africa, India and Brazil.

In most countries, wages climb gradually for all and then jump sharply for the top 10 per cent and, even more, for the highest-paid one per cent of employees. For instance, “the top one per cent earn about 15 times as much as the bottom 10 per cent in Vietnam, but 33 times as much in India.” The report also observed that wage growth had “slowed or reversed” in developing countries, such as India, where wage growth was relatively strong in the period following the 2008-09 financial crisis. Since 2006, average wages had more than doubled in China, rose by about 60 per cent in India, and by between 20 and 40 per cent in most other countries in the G20 group. But in the last four years, real wage growth declined from 6.6 per cent in 2012 to 2.5 per cent in 2015, it says.

“In an economic context in which lower demand leads to lower prices (or deflation), falling wages could be the source of great concern, as it could add further pressure to deflation,” said Deborah Greenfield, ILO Deputy Director-General for Policy, in a release.

With regard to gender inequalities, the report found that the proportion of women in India in the bottom two deciles was similar to that in Europe (about 60 per cent), but “dropped precipitously thereafter”. In the upper half of distribution, women represent no more than 10–15 per cent of wage earners, it added. Even among CEOs, who are among the best paid, the gender pay gap is above 50 per cent, it added.

Minimum wages and collective bargaining could play an important role in reducing excessive wage inequality, the report said. It suggested measures such as regulation or self-regulation of executive remuneration, promoting the productivity of sustainable enterprises and addressing the factors leading to wage inequality between groups of workers, including women and men.