Wage Inequality Has Decreased In Two-Thirds Of Countries Since 2000, According To ILO Report

A recent International Labour Organisation (ILO) report highlights a decline in wage inequality in about two-thirds of countries since 2000. Despite this progress, significant wage gaps persist globally. The Global Wage Report 2024-25 indicates that wage inequality, comparing high and low earners, has decreased annually by 0.5 to 1.7% on average since the early 2000s, depending on the measurement used.

Wage inequality reduction is more pronounced in low-income nations, where it fell by 3.2 to 9.6% annually over the past two decades. In contrast, wealthier countries saw slower declines, with upper-middle-income nations experiencing a reduction of 0.3 to 1.3% per year and high-income countries seeing a decrease between 0.3 and 0.7% annually.

The report also notes that global wages have recently outpaced inflation rates. In 2023, real wages worldwide grew by 1.8%, with projections for a 2.7% increase in 2024—the highest rise in over fifteen years. This marks a recovery from the negative growth of -0.9% seen in 2022 when inflation surpassed nominal wage increases.

However, wage growth varies across regions, with emerging economies showing stronger growth than advanced ones. Advanced G20 economies experienced real wage declines for two consecutive years (-2.8% in 2022 and -0.5% in 2023), while emerging G20 economies maintained positive growth (1.8% in 2022 and 6.0% in 2023).

Wage growth patterns differ significantly across regions according to the report. Workers in Asia and the Pacific, Central and Western Asia, and Eastern Europe saw faster real wage increases compared to other regions worldwide.

"The return to positive real wage growth is a welcome development," stated ILO Director-General Gilbert F. Houngbo. "However, we must not forget that millions of workers and their families continue to suffer from the cost-of-living crisis that has eroded their living standards and that wage disparities between and within countries remain unacceptably high."

Persistent Wage Inequality Challenges

Despite recent improvements, high levels of wage inequality remain concerning globally. The report reveals that the lowest-paid 10% of workers receive only 0.5% of the global wage bill, while the top-paid 10% earn nearly 38%. Low-income countries exhibit the highest inequality levels, with around 22% of workers classified as low-paid.

The findings underscore ongoing challenges despite some progress in reducing wage inequality globally over recent decades.

With inputs from WAM