Over the first two decades of the 21st century, wage inequality has declined significantly in two-thirds of the world’s countries, according to the latest report from the International Labour Organization (ILO) released on Thursday.
The report highlights a decline in global wage inequality, at an annual rate of 0.5 to 1.7 per cent since 2000. Low-income countries have seen the sharpest reductions, ranging from 3.2 to 9.6 per cent per year.
However, these nations are also among those with the highest wage inequality, with nearly 22 per cent of wage earners classified as low-wage earners.
Gilbert Houngbo, ILO Director-General, stressed that if the trends observed in this report are confirmed, this would be a unique situation since the beginning of the 21st century.
Despite this progress, the ILO stresses that wage inequality remains a pressing concern in all countries and regions of the world.
It is crucial to keep in mind that many workers still remain at the bottom of the wage scale, which negatively impacts families who continue to suffer from the cost of living crisis, reducing their standard of living.
Globally, the lowest 10 per cent of workers earn only 0.5 per cent of the global wage bill, while the highest 10 per cent earn almost 38 per cent.
Furthermore, wage disparities between and within countries remain unacceptable, as does inequality, particularly in women’s wages.
The ILO recommends that States strengthen wage-setting mechanisms through collective bargaining and minimum wage systems, promote equality and close gender and sectoral wage gaps.
Formalizing the informal economy is also essential to strengthen income security and rely on reliable data to guide informed policy decisions.