Salary increase is slowing down globally. Why?

Salary increase is slowing down globally. Why?

The increase in salaries throughout the world has considerably slowed down during the past 4 years. Its average rate of increase for 2015 was 1,7% against 2,5% for 2012, says the recently published global report of the UN.

The report for 2016/ 2017 on salaries and wages is by the ILO (International Labour Organisation). With the exception of China, where salaries do grow faster – plus 6,9% during 2015 – salary increase rate has fallen globally from 1,6% in 2012 to 0,9% in 2015, according to ILO experts.

For the G20 economies, the real salary increase is also considerably slower – from 6,6% in 2012 down to 2,5% in 2015. It is a fact that salaries in developed countries have grown by 2,2% in the USA in 2015, by 1,5% in North, South and Western Europe, and by 1,9% in EU countries.

“These tendencies in salary levels are a source of strong discomfort”, said Deborah Greenfield, ILO’s deputy Director-General, at a press-conference. “Some of the increase achieved in recent years can be easily undermined”, she added.

In her opinion, “No political will is visible for bridging the gap between developed and developing countries”.

The inequality in payment is especially noticeable in women’s salaries; women earn, on average, 20 % less than men in Europe.

“In the male-female ratio, when we look at the top earners, the difference in income can be as much as 50 %”, Greenfield added. A male CEO earns twice as much as a woman occupying the same position, on average, estimates an ILO expert.

The differences in payment in enterprises which pay high average salaries is significant. At the bottom of the scale, regular workers earn 7.1 euro per hour on average, while top executives get 844 euro per hour.

To narrow these differences, ILO recommends a number of solutions – collective labour agreements, self-regulation of overpayment, as well as encouraging productivity.

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