Emerging economies fare worst in global wages survey

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Deborah Greenfield from The International Labour Organization (ILO) warned that global wage growth fell to its lowest level in four years. Photo: UN Photo/Daniel Johnson

Concerns have grown for the world's emerging economies with the news that global wage increases are the lowest they've been in years.

According to the International Labour Organization (ILO), average take-home pay around the world increased just 1.7 per cent in 2015, a trend that it says has been driven by "serious economic slowdown" in developing countries.

By contrast, so-called "advanced" economies fared better than before, with real wages experiencing their highest rate of growth in 10 years.

Daniel Johnson has more.

Wages are an excellent indicator of the state of the economy.

Since the global financial crisis in 2008- 9, pay packets have been growing in developing economies.

But now the International Labour Organization (ILO) says that this trend has slowed or reversed, with real wage growth declining in these emerging countries, from 6.6 per cent in 2012 to two and a half per cent last year.

By contrast, industrialised economies saw wage growth hit a 10-year high in 2015.

Here's ILO Deputy-Director General for Policy Deborah Greenfield:

"We see strong signs of serious economic slowdown in emerging and developing countries that were making good progress previously."

Factors driving this downward trend in wages include falling commodity and oil prices, as well continuing economic uncertainty in emerging economies including Brazil and South Africa.

ILO's Global Wage Report also highlights growing inequality, particularly in emerging economies like India, where the top 10 per cent earn nearly 43 per cent of all salaries paid.

The pay gap is still stark as well, the UN agency says, highlighting that in Europe, women earn around 20 per cent less than men, and this rises to 45 per cent for the top one per cent of wage earners.

Daniel Johnson, United Nations, Geneva

Duration: 1'21" 

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