Thursday, October 17, 2013

Real wage growth in the center and the periphery

From the International Labor Organization's Global Wage Report 2012/13 the rates of growth of real wages around the globe.
Note that Eastern Europe and Central Asia and Asia (China playing a big role) lead the pack. Developed countries basically have stagnant wages and the Middle East is the only region with some real contraction.

Note that these are rates of growth, and that levels are very different in each region. According to the report (p. 10):
"The hourly rate of pay varied from almost US$35 in Denmark, through a little more than US$23 in the United States, to US$13 in Greece, between US$5 and US$6 in Brazil, and less than US$1.50 in the Philippines. Using a different and non-comparable methodology, total hourly compensation costs in manufacturing were estimated at US$1.36 in China for 2008 and at US$1.17 in India for 2007 (United States Department of Labor, Bureau of Labor Statistics, 2011)."
These levels are measured in current exchange rates (not Purchasing Power Parity, PPP), which is in my view good, since it reflects the actual costs that firms do face in international markets.

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