Global Wage inequality declines, but challenges persist – ILO Report

Wage inequality has decreased in two-thirds of countries since the start of the 21st century, according to a new report by the International Labour Organization (ILO). Released on Thursday, the report highlights a global annual decline in wage disparity ranging from 0.5 to 1.7 percent since 2000, with low-income countries experiencing the sharpest reductions.

The report revealed that wage inequality in low-income nations has dropped by an impressive 3.2 to 9.6 percent annually. However, these countries remain the most unequal, with nearly 22 percent of salaried workers classified as low-paid.

“If the trend observed in this report continues, it marks a unique moment since the 21st century began,” said ILO Director-General Gilbert Houngbo.

Despite the progress, wage inequality remains a global concern. The ILO notes that millions of workers still earn low wages, negatively impacting families who are struggling amid the ongoing cost-of-living crisis.

Globally, the lowest-paid 10 percent of workers earn just 0.5 percent of the total global salary bill, while the top 10 percent take nearly 38 percent. Wage disparities between and within countries, as well as gender pay gaps, remain major issues.

“The pay gap between women and men, and between those in the informal and formal economies, continues to be a significant challenge,” Houngbo emphasized.

To address these inequalities, the ILO recommends:

• Strengthening wage-setting mechanisms through collective bargaining and minimum wage policies.
• Promoting pay equity and addressing gender and sectoral wage disparities.
• Formalizing informal economies to enhance income security.
• Using reliable data to guide effective policy decisions.

The report underscores that while progress has been made, more work is needed to ensure fair wages and reduce income disparities worldwide.