The latest ILO Global Wage Report has debunked the theories from some economists and central bankers that wages are causing inflation and must be suppressed.
The report, the most authoritative worldwide source of information on wages, shows a decline of 0.9% in monthly real average wages since the end of the first phase of the COVID-19 pandemic. The decline increases to 1.4% if China is excluded from the figures.
Luca Visentini, ITUC General Secretary, said: “In 2022, the gap between labour productivity and real wages is the highest for over 20 years. Labour productivity has been strongly positive for many years, but incomes have stagnated as governments have refused to rein in corporate greed and, in many countries, have weakened collective bargaining and freedom of association rights.
“This means that households the world over are finding it hard to make ends meet, having to sacrifice basic essentials as prices spiral.”
In 2022, labour productivity outstripped wages by 12.6% globally, yet powerful central bankers in many countries are demanding wage suppression even as poverty grows.
Along with measures to boost wages and give workers a fair share of the productivity they deliver, governments need to invest in social protection, health and care, education and other key aspects of a decent society.
“The world must no longer tolerate economic policy being dictated by discredited academic theory from those economists and policy makers who refuse to face up to reality. The world needs a New Social Contract, with jobs and decent wages at the centre,” said Luca Visentini.