AS news of job-cuts continue to pour in from across the globe, a report by the International Labour Organisation (ILO) has said the global meltdown is expected to lead to “painful cuts” in the wages of millions of workers across the world in the coming year.
Based on the latest International Monetary Fund growth figures, the ILO said the global growth in real wages would at best reach 1.1 per cent in 2009, compared to 1.7 per cent in 2008, “but wages are expected to decline in a large number of
countries, including major economies”.
“For the world's 1.5 billion wage-earners, difficult times lie ahead,” ILO director-general Juan Somavia said in Geneva.
“Slow or negative economic growth, combined with highly volatile food and energy prices, will erode the real wages of many workers, particularly the low-wage and poorer households. The middle classes will also be seriously affected,” Somavia said.
Wage growth in industrialized countries is expected to fall, from 0.8 per cent in 2008 to -0.5 percent in 2009, the Global Wage Report 08-09 said.
The governments should protect the purchasing power of wage earners and stimulate internal consumption, the report said.
“Social partners should be encouraged to negotiate ways to prevent a further deterioration in the share of wages relative to the share of profits in GDP. Minimum wages should effectively protect the most vulnerable workers,” the ILO advised.