A recent report from the International Labour Organization (ILO) titled 'Global Wage Report 2024-25' reveals that wage inequality has decreased in about two-thirds of countries since 2000. However, significant wage differentials persist globally. The report, released on November 28, 2024, indicates that the average annual decrease in wage inequality ranged from 0.5% to 1.7%, with low-income countries experiencing a more substantial decrease of between 3.2% and 9.6%. In contrast, wealthier countries saw slower declines, with upper-middle-income countries reducing wage inequality by 0.3% to 1.3%, and high-income countries by 0.3% to 0.7% [1ffa9e58].
The report also highlights that global real wages grew by 1.8% in 2023 and are projected to increase by 2.7% in 2024. While advanced G20 economies faced declines in real wages (-2.8% in 2022 and -0.5% in 2023), emerging G20 economies showed positive growth, with real wages increasing by 1.8% in 2022 and 6.0% in 2023. Notably, the lowest-paid 10% of workers earn only 0.5% of the global wage bill, while the highest-paid 10% earn nearly 38% [1ffa9e58].
The ILO's findings align with previous studies indicating that pay inequality remains a critical issue in various contexts. For instance, a study from Duke University highlighted that pay inequality is more pronounced in newer companies, suggesting that pay-setting policies tend to remain unchanged throughout the life cycle of companies. This study pointed out that factors such as outsourcing and the decline in unionization contribute to wage disparities [69cc48f5].
In contrast, research from the Economic Policy Institute emphasized that overall wage inequality in the United States has risen significantly over the past half-century, with workers' wages not keeping pace with productivity growth. This study revealed that the concentration of labor income at the top of the wage distribution is a major driver of this inequality [69cc48f5].
The ILO report underscores the need for targeted policies to reduce wage inequality, particularly for vulnerable groups such as women and informal economy workers, who are more likely to be low-paid. As the global economy continues to evolve, addressing these disparities will be crucial for fostering equitable growth and improving the livelihoods of workers worldwide [1ffa9e58].