Inequality around the world has its roots in the labor market, according to this year’s International Labor Organization’s (ILO) “Global Wage Report.” ILO research shows that increased worker productivity–particularly in developed economies, where inequality saw its widest increase—has had little effect on boosting wages. However, some emerging and developing economies, especially those focused on poverty reduction, did see inequality decline through a greater focus on more equitable wage distribution and increased paid (as opposed to self-) employment.
The ILO found that minimum wages contribute effectively to reducing wage inequality—and collective bargaining is “a key instrument for addressing inequality in general and wage inequality in particular.”
Some of the blame for flat wage growth can be laid on the 2008 financial crash, which pushed workers out of jobs and lowered growth rates in many economies. The long-term forces of globalization, technology and the decline of unions also have contributed to the problem.
“Average monthly real wages grew globally by 2 percent in 2013, down from 2.2 percent in 2012,” according to the report. Developing and emerging economies drove this growth: Asia saw a 6 percent increase, Eastern Europe and Central Asia nearly 6 percent and the Middle East saw real wages rise by almost 4 percent. Wages in Latin America and the Caribbean rose by less than 1 percent. Average wages in developed countries grew just 0.4 percent since 2009, despite a 5.3 percent increase in worker productivity.
Inequality fell most in Argentina and Brazil. Workers’ real wages in industrialized countries like Japan, Spain and the United Kingdom are less than they were in 2007.
In almost all countries surveyed, wage gaps remain between women and men, between national and migrant workers and between workers in the formal and informal economy.
According to the ILO, the gender “wage penalty” occurs despite education, experience and productivity, and often as a result of discrimination. Indeed, women’s average wages are between 4 percent and 36 percent less than men’s, and the gap widens for higher-earning women. Closing that gap will require policies to combat discrimination and gender-based stereotypes, and improve maternal, paternal and parental leave, says the report.
The ILO was created in 1919, as part of the Treaty of Versailles that ended World War I, to reflect the belief that universal and lasting peace can be accomplished only if it is based on social justice.
Read a summary of the full Global Wage Report.
Check out the Global Wage Report in Short (video).
PGFTU leaders discussed the study, which found the majority of Palestinian workers are paid less than the minimum wage. Credit: Rami Khanfar
More than half of Palestinian workers—59 percent—earn less than the national minimum wage established in October 2012, and women workers are paid half as much as male wage earners, according to a new report. A large majority, 85 percent, of Palestinian workers do not have a written contract guaranteeing their conditions of employment.
“Palestinian Workers: A Comprehensive Report on Work Conditions, Priorities and Recommendations,” details the working conditions of Palestinians who labor in the West Bank, Gaza, Israel and Israeli settlements.. The report—based on surveys of workers in the West Bank, Gaza, Israel and the settlements—finds that fewer than half (47 percent) of working Palestinians have health insurance, while the majority (58 percent) say they risk physical hazards at work. The report is available in English and Arabic.
Many workers are required to work longer hours than those agreed upon and in excess of eight hours a day, with 17 percent of workers saying they are on the job seven days a week. Some 40 percent of workers say they work for more than eight hours a day and 10 percent say they work 12 hours a day.
According to one worker quoted anonymously in the report: “Employers do not abide by the terms of the contract with respect to working hours. For instance, workers in the construction sector work all day from 7 a.m. to 6 p.m.”
The report also highlights issues faced by women workers, only 12 percent of whom say their wages are sufficient to cover their living expenses. Women also face workplace abuse, such as in the Jordan Valley, where working women say they suffer beatings, verbal abuse and humiliation by labor brokers who bring workers to Israel.
“Palestine Workers,” based on interviews with 1,000 workers (union and non-union members), representatives from the Palestinian General Federation of Trade Unions (PGFTU), employers’ associations and government, officials, was prepared by the Arab World for Research and Development (AWRAD) with input from the PGFTU and support by the Solidarity Center