ILO : crisis-hit developed countries see wages fall

A sluggish global economy hit world wage growth hard last year, taking an especially harsh toll on workers in developed countries, who saw their salaries shrink, the International Labour Organization said Friday. "The global crisis has had significant negative repercussions for labour markets in many parts of the world," said ILO director general Guy Ryder. In its Global Wage Report, the UN's labour agency said monthly average wages adjusted for inflation grew globally just 1.2 percent last year, down from 2.1 percent in 2010 and 3.0 percent in 2007. It added that if China -- a country where wages roughly tripled over the past decade -- was omitted from the equation, global wages grew just 0.2 percent last year from 1.3 percent in 2010 and 2.3 percent in 2007. Developed countries, many of them suffering from the eurozone debt crisis, had been especially hard-hit with average salaries slipping 0.5 percent in 2011 compared to the year before, the report said. Ryder pointed out to reporters in Geneva that in developed economies, the crisis led to a "double dip" in wages, with average salaries falling into the red first in 2008 and again last year. "And the trend seems to be for zero growth in 2012," he said. Other regions of the world fared far better, with Asia seeing wages jump 5.0 percent, as salaries grew 5.2 percent in Eastern Europe and Central Asia and 2.2 percent in Latin America and the Caribbean, the report showed. But although wages were falling in developed countries as they grew and even soared in developing nations the wage gap between them remained overwhelming, Ryder said. While a worker in the manufacturing sector in the Philippines on average took home $1.40 an hour last year, a US worker earned $23.30 and in Denmark the hourly pay was $34.80, he said. In its analysis of wage developments, ILO meanwhile criticised that salary increases in recent years had not kept pace with labour productivity. "Where it exists, this trend is undesirable and needs to be reversed," Ryder said, adding that it basically meant "workers and their families are not receiving the fair share they deserve." In developed countries, labour productivity -- or the amount of goods and services produced compared to the number of hours worked -- has increased about double as quickly as wages since 1999, the report showed. And since the 1970s, workers in these countries have seen their share of their countries' national income slip from 75 percent to around 65 percent. In Germany, for instance, labour productivity surged by nearly 25 percent in the past two decades, while salaries remained flat, the report showed.