“Preliminary data for the first two quarters of the year indicate that the global wage growth reals recorded a 2.7% increasethe largest increase in more than 15 years,” highlighted this Thursday the International Labor Organization (ILO).
According to him World Wage Report 2024-2025: Is Wage Inequality Declining Around the World?published by the group, after the impact of the pandemic and years of high levels of inflation, workers’ salaries They are already beginning to show a more solid recovery.
In 2022, global salaries decreased by -0.9%. In 2023 they moved into positive territory, with a growth of 1.8 percent. However, the recovery has not been even in the world. The regions with the greatest progress are Central and Western Asia (25.1%), Eastern Europe (5.4%) and Asia-Pacific (2.9%).
“The return to real wage growth is a positive development. However, we must not forget that millions of workers and their families continue to suffer the cost of living crisis that has eroded their living standards, and that wage disparities between and within countries remain unacceptably high,” said Gilbert F. Houngbo, director-general of the ILO, in a statement.
And although inflation levels have generally decreased in the world, the organization warns that the increase in the prices of goods and services continues to be a latent threat to purchasing power of remunerations, mainly in emerging and developing economies.
Mexico leads regional growth
In the case of Latin America and the Caribbean, last year salaries had a real increase of 1.7%positive behavior driven largely by the advancement of Mexico and Brazil. For this year, it is estimated that regional growth will be 1.5 percent.
“After remaining virtually unchanged between 2014 and 2019, real wage growth in Latin America and the Caribbean has been volatile since the emergence of the pandemic. The greatest impact was reflected by a 2.7% decrease in 2020, followed by a 2% decrease in both 2021 and 2022 as workers returned to the labor market and inflation was beginning to erode real wages.
“Despite a large decline in real wages in Argentina due to a period of hyperinflation, real wage growth rebounded in 2023, driven by the strong performance of Brazil and Mexico (5.2% and 5.3%, respectively). “Average real wage growth is expected to decline marginally to 1.5% in 2024,” the ILO notes in the report.
Meanwhile, and to face economic volatility, the organization recommended its members maintain a real growth policy of the minimum wagebecause in most cases the adjustments in this reference in the world have not been able to compensate for the effect of inflation on the purchasing power of the workforce.
For example, of the 160 countries analyzed in the report, 60% had increases in their minimum wages in 2022, but only in one in four increments It meant real growth. Furthermore, in the case of 2023, although in 55% of the cases there was real progress in this reference, in the vast majority the adjustments did not compensate for the decrease that was observed in the previous two years.
In this way, the document points out, governments must make it a priority to protect the purchasing power of workers through minimum wage policies, mainly for those who earn the least.
“The measure is of particular importance in light of the report, which shows how the cost of living crisis of 2021 and 2022 most affected low-wage workers and their families, who dedicate a greater proportion of their income to the acquisition of essential goods and services, whose prices increased on average faster than the consumer price index.”
