The United Nations 2030 Agenda for Sustainable Development identified decent work for all women and men, and lower inequality, as among the key objectives of a new universal policy agenda. The issues of wage growth and wage inequality area central to this agenda. Sustainable Development Goal (SDG) 8 calls for “sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”, and highlights the importance of achieving equal pay for work of equal value. SDG 10 seeks to “reduce inequality within and among countries”, emphasizing income growth of the bottom 40 per cent of the population, the elimination of discrimination and the adoption of fiscal, wage and social protection policies to progressively achieve greater equality. The labour income share of GDP, which reflects the relationship between the growth in average wages and in labour productivity, has been identified as a crucial indicator in this area. Concern about inequality has also been expressed by the G20, which identified widening inequality as posing challenges for social and political cohesion and having significant costs for economic growth.
This new ILO Global Wage Report – the fifth in a series that now spans over a decade – contributes to this agenda by making comparative data and information on recent wage trends available to governments, social partners, academics and the general public. These trends show that global real wage growth dropped sharply during the post-2008 economic crisis, recovered in 2010, but has since decelerated. If China, where wage growth was faster than elsewhere, is not included, wage growth fell below 1 per cent in 2015. As I emphasized at the World Bank and
IMF annual meetings in October 2016, rekindling growth requires an increase in consumer spending and in turn sustainable wage and social protection policies. Improving wages and decent work opportunities will be essential to breaking out of the slow-growth trap in which the global economy currently finds itself.