Thursday, July 04, 2019

Global Pay Inequality

Nearly half of all global pay is scooped up by just 10% of workers, according to the International Labour Organization (ILO), while the lowest-paid 50% receive just 6.4%.

The lowest 20% – around 650 million workers – earn less than 1% of total pay, a figure that has barely moved in 13 years, the ILO analysis found. 

A worker in the top 10% earns $7,445 a month (£5,866), while a worker in the bottom 10% earns just $22.

Roger Gomis, economist in the ILO statistics department, said: “The majority of the global workforce endures strikingly low pay and for many having a job does not mean having enough to live on.

“The average pay of the bottom half of the world’s workers is just $198 per month and the poorest 10% would need to work more than three centuries to earn the same as the richest 10% do in one year.”

Growing prosperity in China and India has brought those large emerging economies closer to higher-income countries, but income inequality has not been reduced within either country.

Poorer countries tend to have much higher levels of pay inequality. In Sub-Saharan Africa, the bottom 50% of workers receive only 3.3% of total pay, compared with the European Union, where the same group receives 22.9% of the total income paid to workers.
In several high-income countries, including the UK, US and Germany between 2004 and 2017: substantial losses in earnings for the middle and lower-middle class, and large gains for the top. The share of pay going to the middle class – the middle 60% of workers – declined during this period, from 44.8% to 43%. At the same time, the share held by the top 20% of earners increased, from 51.3% to 53.5%.

“The data show that in relative terms, increases in the top labour incomes are associated with losses for everyone else, with both middle-class and lower-income workers seeing their share of income decline,” said Steven Kapsos, head of data production and analysis at the ILO, “However, when the labour income shares of the middle- or lower-income workers increase, the gains tend to be widespread, favouring everyone except the top earners.”

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