United Nations Radio

The International Labour Organization is warning that the global economic crisis is expected to lead to cuts in the wages of millions of workers worldwide next year.

In a report published today, the ILO forecasts that the global growth in real wages, will at best reach just over one per cent in 2009 compared to close to two per cent this year.

The UN labour agency says that in a large number of countries, including major economies, wages are expected to decline.

Manuela Tomei, who deals with work and employment issues at the ILO, says the declining wages will have an impact on efforts by governments to put in place stimulus packages to encourage internal consumption.

"We tend to forget the fact that most consumers are wage earners and the trends that we have been experiencing and registering in the past decades have had major implications for the ability of people and wage earners in particular, and I am thinking in particular of those that are on the lower half of the wage distribution, to actually spend."

Ms. Tomei says that in a number of countries consumption was heavily sustained by debt, instead of increasing wages.

Gerry Adams, United Nations

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