Global Wage Report 2022-2023: ILO (UPSC Current Affairs)

Relevance: GS3 -Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment; GS 2 - Important International institutions, agencies, and fora- their structure, mandate.

(Source: The Hindu,12/06/22)

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Why in the news?

• Recently, International Labour Organisation (ILO) released two reports indicating the post-pandemic global employment scenario.
• The ‘Global Wage Report 2022-2023: The Impact of inflation and COVID-19 on wages and purchasing power’ discuss the twin crises, inflation, and economic slowdown, which created a “striking fall” in real monthly wages around the globe.
• Another report, the ‘Asia-Pacific Employment and Social Outlook 2022: Rethinking sectoral strategies for a human-centred future of work’ stated that the Asia-Pacific region lost about 22 million jobs in 2022.

Global Wage Report 2022-23

• The 2022–23 edition also provides evidence on how salaries have changed since the COVID–19 crisis and how the present inflationary environment is limiting real wage growth in the majority of global economies.
• According to the report, real wage growth has fallen to negative levels for the first time in the twenty-first century as the disparity between real productivity growth and real wage growth is growing.

Highlights of the report

• The ILO report on wages looked at employees' real and nominal wages.
• The objective of Global Wage Report the objective is to collect wage data from as many countries and territories (about 190).
• Then they are grouped into five separate regions.
• The nominal monthly salary in India increased from Rs. 4,398 in 2006 to Rs. 17,017 in 2021.
• The Ministry of Statistics and Programme Implementation of the Indian Government provided the data. However, after accounting for inflation, India's real wage growth dropped from 9.3% in 2006 to -0.2% in 2021.
• China saw a decline in growth from 5.6% in 2019 to 2% in 2022. The growth rate of Pakistan is -3.8%.
• After the pandemic, India's economic development began to decline.
• According to the survey, lower-income households are more affected by the rising cost of living because they must spend the majority of their disposable money on necessities, which often see higher price rises than non-essential items.

Concerns

• Rebound in only in high-skilled jobs: Only high-skill employment had a rebound from the COVID-19 crisis at the Asia-Pacific level, which is true for all subregions.
• The ILO claimed that growing inequality is a problem. While there is a 1.6% increase in employment for high-skill individuals between 2019 and 2021, there is no comparable growth for low- to medium-skill workers.
• Disparity between advanced and developing G-20 Nations: The survey found a large disparity between advanced G-20 nations and developing G-20 nations, including India, in terms of the average level of real earnings.
• In industrialized economies, it is on the order of $4,000 per month, whereas in emerging ones, it is $1,800 per month. According to the paper, between 75 and 95 million people were driven into extreme poverty during COVID-19.

Steps to be taken

• The paper offers a number of policy ideas and solutions to the dilemma caused by rising living expenses.
• Future nominal wage: It stated that a sufficiently high but reasonable price expectation should be included in the bargaining process for any future nominal salary hikes.
• Inflation: It is said that preventing a harmful wage-inflation cycle could help to defend the quality of living of households, particularly low-income households, against unanticipated future inflation spikes.
• Strengthen wage policy and labor market institutions: According to the analysis, wage policy and labor market institutions need to be strengthened.
• Income distribution: According to the ILO, the development of decent formal wage employment is a requirement for more equal pay and income distribution and is a major factor in equitable and long-term wage growth.
• Gender Pay Gap: It urges policymakers to pay attention to the gender pay gap because women are less likely than males to re-enter the workforce after leaving it.
• Multilateral strategy: The paper emphasizes that a multilateral strategy is essential for resolving the challenges in the world.

Way forward

• There is an urgent need to address the harmful effects of climate change, rising inequality, poverty, discrimination, violence, and exclusion experienced by millions of people, including the discrimination that women and girls continue to participate in many parts of the world, the lack of vaccines and adequate access to sanitary conditions and primary healthcare for all, and the widening digital divide between developing and developed nations.

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Some Important FAQs

MCQs

Question: Global Wage Report was in news recently,it is released by

(a) World Economic Forum

(b) International labor Organisation

(c) World Bank

(d) United Nations Conference on Trade and Development