World Labor Survey Notes Rising Productivity, Stagnant Wages

As the global economy matures, labor compensation continues to decrease relative to the value added by new technology and leaner operations.
Productivity vs. Wages, ILO Survey 2012-13

Trends in growth in average wages and labour productivity in developed economies. (index: 1999 = 100).
Sources: ILO Global Wage Database; ILO Trends Econometric Model, March 2012.

 

By LUKE VARGAS

UNITED NATIONS (TRNS) – A new report from the U.N.’s International Labor Organization (ILO) has diagnosed an intensifying discrepancy between labor productivity and average wages worldwide since 2009’s “Great Recession.”

The ILO’s latest survey, the “Global Wage Report 2012-13,” determined that, “in developed economies as a whole average labour productivity has outpaced real average wage growth.”

In the United States, proof of such a trend is close at hand. New data from the Bureau of Labor Statistics shows an 85% increase in labor productivity since 1980, accompanied by an only 35% increase in real hourly compensation.

The situation isn’t much better in the Eurozone success story Germany, where 22.6% productivity gains between 2003 and 2011 were met with flat wage growth.

The ILO report identified multiple factors underlying this trend, including significant reductions in the number of hours worked by the average worker each month, the increased utilization by employers of part-time positions and “mini-jobs,” as well as policy decisions that privilege labor cost advantages in the pursuit of increased national competitiveness.

“A simplistic view that countries can just ‘cut’ their way out of the recession needs to be avoided, and more emphasis should be placed on policies that promote a close connection between the growth of labour productivity and the growth of workers’ compensation,” the ILO concluded.

TRNS UN Bureau

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Luke Vargas
Luke Vargas is the United Nations bureau chief for Talk Radio News Service, leading international coverage from 15 countries since 2013. Luke previously covered U.S. elections in 2008 and 2012 for radio and television. Twitter: @TheCourier

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